PR tip: how to maintain your Company's goodwill

Yesterday's some of the social media biggest barometers were off the charts. Why? Facebook essentially chose to pull the rug out from under its users with a highly questionable Terms of Service (TOS) change. Almost 6,000 people have dugg Facebook's move on Digg and on Twitter yesterday both TOS and Facebook were top 5 trend topics all day and into the night. This move could have been handled differently to maintain PR goodwill. Was there only one option for Facebook to make here? I understand, as I think all users of social networks and other social media sites, that increasingly the web is opening up so sites can share data more easily with each other. When a user chooses to share their data publicly, it no longer distinctly belongs to them. However, the mistake that Facebook made was that they originally told their users that they were free to delete their account and with that account deletion, their data went with them. Then without any warning or grace period, Facebook pulls an about face (pun intended) and reneges on its own TOS with users, basically telling all 100+ million of them, guess what? We changed our mind and your data, it isn't yours any longer, it's ours and we can do whatever we want with it, whenever we want. Period. Instead of following their lawyers' advice, perhaps Facebook ought to have followed their PR team’s advice and taken a different approach. Clearly, we’re unsure how things really unfolded, but too often companies follow the legal advice (i.e.: ‘just say no comment’) instead of taking control of a developing crisis and having less fallout. Right now, Facebook has created a tremendous amount of bad will and that is unfortunate. It is a hard lesson that others may want to remember and avoid.

The power of word-of-mouth marketing

Building consumer-generated word-of-mouth is a great way for companies to enhance their overall PR efforts.  We recently applauded Amazon for its smart PR move around its push for more crowdsourcing of user-generated product reviews.  Amazon’s efforts paid off; the online retailer reported that the 2008 holiday season was its best ever.  Nielsen Online reports more than 80% of online shoppers read consumer reviews, validating their use as an important research tool for online consumers. Whether researching online as a consumer or business user, positive customer testimonials will go a long way.  Young tech startups that are looking to generate positive conversations around their own product or service need to bear in mind that it’s ultimately determined by the users’ experience.  Get that right and meet the needs of your targeted audience and, then as Amazon is learning, leveraging consumer-generated reviews as part of your online marketing efforts could reap additional viral PR and growth for your product or service.

Early and often -- focus on new features or customers?

For any startup looking to gain a strong foothold in the market, customer traction is the name of the game.  All too often though, many Web 2.0 startups focus instead on pushing a product or service to market that they built without involving beta customers beforehand.

Innovative ideas need to incorporate early user feedback and testing and that shouldn’t mean just before the product or service is “baked.” Working with beta customers should start at the onset in order to really understand what customers’ needs are and reiterating the product or service to win their nod of approval. Since early stage, tech startups have such limited resources, the startups early version of their product/service should focus on solving the most critical customer pain points: the product/service has to be “a must have” and not — “a nice to have.”  This can be best achieved by focusing on beta customers — early and often.  Happy customers will become referenceable customers and your biggest champions.  In their words, they can best articulate why the product/service solved their problems and why it was of value.  Other prospective customers will self-select by identifiying with the same problem/pain points and move to seek out the solution.

Being on the PR side of things, we still see far too many Web 2.0 companies, as well as established companies, not involving their customers soon enough or often enough before they roll out some “beta” offering (or even worse launch a new product).  From the PR side, the best advice we can offer is not to push out new whiz bang features early and often but instead to work closely with customers, early and often, in order to build that better mousetrap.

Great tech startups will get gunding despite tougher market conditions

We worked with San Francisco-based Syncplicity recently on their funding announcement.  The timing for the startup was fortuitous because they managed to get their post-seed funding just before the market conditions and environment for tech startups became much more challenging.  Syncplicity and their VC firm, True Ventures, have been sharing their perspective related to the funding environment and tech start-ups.  Here are a few postings that we wanted to highlight that touch up some of the notable points of Syncplicity’s funding.

http://profy.com/2008/10/31/simplicity-still-viable-investment-syncplicity-gets-2-35-million/

http://www.thealarmclock.com/mt/archives/2008/10/cloud_computing.html

VentureWire’s Scott Denne’s piece captured that Synplicity found one of the biggest challenges in closing the round was that most venture capital firms wanted to put in more money than the company was willing to take. Since Syncplicity runs largely on hosted infrastructure, like many Web 2.0 start-ups, its capital needs were out of sync with the amounts that larger venture firms look to put to work over the life of a company.

VentureBeat’s Matt Marshall just did a post related to the current VC model and startup environment that elicited insightful, provocative comments from readers as well.
http://venturebeat.com/2008/11/12/the-vc-model-is-broken/