A Conversation about Twitter – Part One
View more presentations from Fresh Consulting.
Prior to leaving for my latest business trip, I had the opportunity to preview David Daniels‘s eBoook, “Is your product launch doomed?” and I was fairly thankful for that opportunity. David’s ebook was fairly timely and provided a needed reality check for the effort which I was engaged in, a product launch. The piece provides 10 key items for consideration during a launch – all of which are valid. My most recent launch did so well since the launch focused on ensured that item 10 from david’s book – the team was paramount. The initial launch roadshow which just wrapped up garnered reasonable international press, initial interest and customer excitement. So basically – the mechanics and the emotional parts went very well, so now on to the crazy profit and revenue part. So that’s kept me just a little busy this summer, but I look forward to posting more over the coming months. Considerably more, wow have I learned a bunch in the last 90 days.
Looks like David has been busy too – here is a presentation I found which David did at ProductCamp Austin, it appears that his launch plan for the eBook included a roadshow of sorts as well. Without the sound track and if you haven’t read the eBook you should still be able to get most of the parts, but I would read the long version too.
Related articles by Zemanta
- Bacon Scented Air Spray. Need we say more? (inquisitr.com)
Consider this: 25% of visitors to B2B websites are active buyers, while another 50% are in the early stages and with the right nurturing could become active buyers. So, 75% of website visitors are legitimate prospects. But because the websites of many (most?) B2B companies are poorly designed, the companies will never realize the full potential of the site. B2B sites suffer from myriad problems including:
- Poorly written copy,
- Flash animation that serves no real purpose,
- Too much “stuff” on the home page competing for attention,
- No info on company management to make a human connection,
- Focus on selling products and services, not on solving customer problems,
- Overuse of trite stock photography (think photos of handshakes and of serious-looking people sitting around conference room tables),
- Web content that several years old,
- No testimonials, case studies or white papers,
- No option for contact other than “have someone call me.”
Why does this happen? I have several theories. First, most web designers are graphic designers, trained to make things look attractive and fit a certain ideal of what we’ve come to expect for web sites. But this is not what the client needs to help them sell. The client, through no fault of their own, doesn’t know what works in the web world and is relying on the web designer to do the right thing.
Second, companies frequently rely on internally-written copy instead of engaging a writer to craft effective prose. In the end this decision costs the company many times more than the cost of the hiring a writer.
Third, a misunderstanding by management of the importance that their website plays in the sales process. Many execs rose through the ranks using more traditional sales and marketing methods and are unfamiliar or reluctant to turn over significant demand generation and lead nurturing duties to their web site. Hence, the website, search engine marketing (SEM) and other web-related marketing are seen a one-time expenditures (much like a brochure), while resources are poured into direct sales and other methods for engaging customers. The ineffective website ends up working against the company when prospects check things out online. This is unfortunate, as The Gartner Group finds that companies that follow best practices for demand generation and lead nurturing can see a 50% lift in their conversion rate,
Lastly is the disconnect between Marketing’s traditional role in getting interested people to the top of the sales funnel and the role of Sales to engage with leads who are ready to buy, about half way down the funnel. Significant leakage results as prospects that require nurturing are neglected by Marketing, who sees funnel management as the job of Sales, and Sales who needs Marketing to nurture prospects until they’re ready to be engaged by Sales. See my white paper for more info on this.
Businesses need to understand that the purpose of their website is to sell, and that their websites play a critical role in communicating with prospects. It’s a place for customers to learn about the company, its products and services, its management, and (hopefully) be interested enough to keep the relationship (and it is a relationship) going and to eventually move through the sales funnel. In the real world, this use of the web doesn’t happen nearly as frequently as it should.
To solve these problem, there are many useful resources available online about creating and managing effective B2B websites. For example, here’s an interview from MarketingProfs:
What do you think? What have you done to improve how your company uses its website to sell?
Are you new around here? Spatially Relevant, not only is about sharing the things we find from cool people, but also sharing/identifying trends in marketing, branding and how product managers can change a business with technology, such as social media. Stick around and add the rss feed to your reader or follow on twitter. Now on to the article…
—-
Do you know how much your company is worth? If you work for a public company the answer is pretty easy — the stock market values your business every day. If you work for a private company it’s a bit harder. In this post we’ll discuss a technique that can be used to estimate the enterprise value of your private company.
Enterprise value is a financial concept that describes the amount of money the market believes your business to be worth. It is often referred to as the ‘takeover value’ — the amount of money required for an acquirer to buy your company at it’s current market price. Enterprise value is different that market capitalization or market cap. A public company’s market capitalization is equal to the number of shares outstanding multipled by the current share price. Enterprise value is a more comprehensive measure of a company’s value since it also includes the amount of cash, debt, and other items associated with a business. Two firms could have the same market capitalization but wildy different enterprise values. For example if one firm had $45 million in cash and no debt and the other firm had $125 million in debt and $20 million in cash, it would take more money to buy the second firm than the first firm because to buy the second firm you would not only have to pay for the stock (market cap), but the debt as well.
Here is the basic formula to calculate enterprise value:
Enterprise value =
common equity at equity value
+ debt at market value
+ minority interest at market value, if any
– associate company at market value, if any
+ preferred equity at market value
– cash and cash-equivalents.
This post presents a simple process to calculate the enterprise value of your private company — it assumes that you have access to your firm’s recent financial statements. If you are looking to estimate the enteprise value of another private company that you do no thave access to their financials I suggest you check out another post entitled: How to Calculate the Enterprise Value of Private Companies.
Most of the information required to calculate your enterprise value is contained in your financial statements. Cash and cash equivalents are the easiest since they are right on your balance sheet. If your firm has debt, you need to calculate not only the outstanding balance but any prepayment or other charges that you would incur if you settled the debt today. The same thing is true about preferred stock and liquidation preferences. The value of preferred stock and its associated liquidation preferences should come right off of the stockholders equity section of your balance sheet. If you have venture capital or private equity invested in your firm you should have a deep understanding of the impact of liquidation preferences.
The challenge with calculating enterprise value for private firms is the value of your common stock or equity. For public firms this is easy – market capitalization is simply the current share price multiplied by the number of outstanding shares. For private companies, however, there is no public market to value your stock on a daily basis. Instead, you have to estimate its value by comparing yourself against other public companies. You can do this by analyzing at least three public companies in your market place and applying some of their metrics to your situation.
To make this process a little clearer, let’s assume that you are a private provider of ERP solutions for the wholesale distribution marketplace. Here is a snapshot of your business at this point in time:
To estimate your enterprise value, you need to compare yourself to some other public technology companies that are similar in size and nature to your business. There’s no point in comparing your company to SAP or Oracle since those firms are 75 times the size of yours. Four good candidates in the ERP space are MSC Software, i2, Epicor, and QAD. Once you have identified some firms to compare against, develop a summary matrix of some key indicators, like the one shown below:
Next, develop a comparison matrix where you look at the ranges of key valuation metrics and decide where your company fits into the continuum, as shown below:
Another source of comparable statistics is the fairness opinions developed by investment bankers to support the paid by an acquirer for a particular company. Often, summaries of these documents are included in SEC filings associated with a public company involved in an acquisition. Any time a public company in your market is involved in an acquisition, you should review the filings to see what tidbits you can learn. Recently, Golden Gate Capital and Infor announced the acquisition of SoftBrands. In conjunction with the deal, SoftBrands filed a pretty extensive proxy statement that included detailed information about the fairness opinion rendered by Piper Jaffray. You can read the filing here. The following table presents a list of 33 transactions between 2004 and 2009. It is interesting to see how valuations changed over that time period. The Enterprise Value / EBITDA multiple is a good bellwether metric that reached a peak in late 2006.
The goal of this exercise is to leverage information about the valuation of the companies you are comparing yourself to so you can develop an estimate of your enterprise value. A couple of notes. First, you generally should base your calculations off of trailing twelve months (ttm) numbers. This provides a better insight into your actual performance. Management teams always have high expectations for the future and basing your enterprise value on anticipated performance is a bit of a crap shoot. Also, most investors prefer to look at actual performance instead of management’s future projections. Second, you need to have some logic to justify where you value your firm in the continuum of valuation metrics. In this particular analysis I felt that the mythical ‘My Company’ was closer in nature and performance to MSC Software and Epicor than i2 or QAD. Some of the factors in that decision making process were the relative strength of “My Company’s” EBITDA and its relatively strong cash/debt position. If I were asked to estimate the enterprise value of ‘My Company’ based on the limited information presented here I would estimate a range of $275 million to $325 million.
The approach to calculating enterprise value for your private company presented in this post is a quick and dirty technique. It will get you into the relative valuation ballpark. You can always hire an investment banker or a specialized valuation firm to develop a comprehensive analysis of your value.
If you liked this post you can follow him on Twitter @devcorporate.com
