Video, video, video, the Facebook feed will be all videos in five years.
That’s the words of Facebook vice president for Europe, the Middle East, and Africa, Nicola Mendelsohn earlier this year.
Vice president for Europe, the Middle East, and Africa, Nicola Mendelsohn.
The last 3–4 years we’ve seen videos explode in social media. With the emergence of Snapchat and Vine the rest of the social networks followed, and there’s now no social networks that doesn’t take video seriously.
This means that if you’re doing marketing for your startup, you need to start looking for someone who can handle a camera.
Digesting information
This is what it’s all about — digesting information in a time where information is overflowing.
Videos and pictures helps you present a story faster and smarter than through written words:
Faster: You only need a minute to explain a concept, an idea or news through video, as the audiovisual combination lets a person take in more information compared with only audio or text.
Smarter: All social channels are adapting in way that favors video. Research has shown that the chance of people clicking on a link more than doubles by using a pictures or a video in the post. It’s also smarter, because video is convertible, meaning that if you shoot a video, you can make that into both written content and audio content.
And if you’re not convinced by my words, Axonn Research found 7 in 10 people view brands in a more positive light after watching interesting video content from them.
It’s important to add that video is not only great for attracting clients and customers from your own channels, but your chance of being featured in media outlets and tech blogs, also increases a lot with the use of video.
VR and 360 degrees
You’ve hopefully understood by now that video will essential to spread the word about your startup.
But if you want to be in front of the trend, you should look into VR and 360 video as well, according the Facebook VP Mendelsohn:
In five years 360 videos will feel very common, as it today is a bit new and interesting.
The big question is when virtual reality will become mainstream. In other words, when is it worth to dedicate resources to VR marketing?
The 2016 Virtual Reality Industry Report estimates that there will be 135.6 million VR headset in use by 2025, of which 122 million will be mobile. So if you want to be in front of the trend, you should at least put it in your notebook as something to watch out for.
There’s no doubt where to invest your marketing budget the next years.
Too expensive?
Renting a professional video team has been, and still is way too expensive for a startup. However, as the video gear is getting cheaper by the year, and the quality and user friendliness increases, most people can learn how to make a corporate video, and that at a reasonable price.
I won’t go into what kind of gear you should use for your films, but a fast google search will get you on the right track.
Technical events: the most essential content is the code the presenter is using, that’s why you should emphasize on recording the screen during the presentation. But to not miss the human touch, it’s works great to include a small video bar inside the code screen:
Video podcasts: As mentioned before, the content is always more important than the quality, but for longer content, quality also counts. Using different camera angles that both captures the whole room, but also close ups, is key. It’s also important with good sound quality, which doesn’t need to be expensive at all:
Interviews: Make sure you have a decent microphone, and if the interview object is sitting the same place the whole talk, make sure to use a tripod. Use open questions, and not cut too much:
Even though Playfulbet’s product is e-sports and sports betting games, our success in capturing thousands of users and followers has not been left up to chance.
Behind Playfulbet there’s a young team that first and foremost love what they do, as we get to work with our biggest passion — games. And it feels even better to share these insights when our devotion is bearing fruit, as our social media following have been growing exponentially the last few years.
We recently reached a couple of milestones in our social channels, as we reached 300.000 followers on Twitter and 400.000 followers on Facebook.
As mentioned earlier, nothing is left up to chance, and at times we’ve been overwhelmed by the massive growth from some of our campaigns, especially as Playfulbet has been expanding internationally.
LOVE
We love our followers, and have great respect for everyone that follow our social media channels. And here lies some of the key-elements to our growth, we have a big emphasis on entertaining our audience every single day.
It’s important to see you social media as an extension of your product, as our social channel is an extension of Playfulbet’s betting platform.
We focus on communicating with our audience, and not just broadcasting a message. In this we use all kinds of media tools like pictures, video, GIF’s, surveys and contests that can steal a smile or a reaction from our followers.
If you have a product to leverage through the platform, use it for what it’s worth. We give away our virtual money (Coins) that users can take advantage of on the platform to win prizes.
The precious feedback
To maintain a high interaction rate in your social channels is key to keep growing. As we are a sports betting platform we base a lot of our content on actual sports news. In that way we’re staying relevant to our followers, and not only entertaining. I think this is one of toughest nuts to crack — stay relevant.
If you’re interacting with your audience every day, you’ll be sure to get feedback, which is very valuable. It’s important that you follow up on all your feedback, as your brand will be more credible, and your followers will be more faithful if they feel they’re being heard.
Jorge Badenes, content manager at Playfulbet — an itnig startup.
Having depurated non-toxic social networks where the user feels comfortable also serves as a real time barometer of what’s going on in your company. At Playfulbet the users may ask for support about prizes they’ve won or they aspire to win, they report cheaters and people who don’t play clean by using multi-accounts, which are forbidden, or they simply alert us about canceled or suspended matches they want their coins back from. All of this is super helpful for our team, and makes our platform better.
Right now we’re engaging our followers all across Europe and in Southern America, giving away hundreds of prizes every month, while creating entertaining content. Follow us for some inspiration on how you can do the same, because our team rocks!
Playfulbet, the adventure continues..
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This post was written by Jorge Badenes, content manager at itnig startup Playfulbet.
There’s tons of events in the Barcelona startup ecosystem, you can find all the itnig events here.
Everyone that works in startups desire a strong, growing and inclusive community. It’s something everyone benefit from, founders, VC’s, developers, marketers, the list goes on.
How you perceive a community often depend on if you’re a local or not. In Barcelona the startup community is a good mix of both Spanish people and expats from all over the world, which is a great thing.
I’ve been a member of the startup community in the city for well over a year now, and I’ve been impressed by how inclusive and fast-growing it is. To help me analyze why and how the ecosystem has been growing, I spoke to a local expert.
Want to go fast or far?
Àlex Rodríguez Bacardit is the CEO and founder of MarsBased, director of Startup Grind Barcelona, and the man behind the Slack group StartupBCN. As a local, he’s seen the community grow fast for the last years, and have recognized a clear difference between certain companies:
Some companies fail to understand that an ecosystem is a perfect sum of the actors that contribute. Go alone if you want to go fast, go accompanied if you want to go far, as the African proverb says.
Àlex Rodríguez Bacardit at Startupgrind’s two year anniversary in Barcelona this year.
Even though tech startups is dependent and built by developers, it’s important that all events isn’t exclusively for this group. Bacardit says entry-level events are key in building and growing a community:
Events provided by new startups or even public administration, where you get free non-technical content, not using acronyms or tech-jargon so people can start soaking the startup vibe and culture without feeling lost.
Too many “rockstars”
As Brad Feld wrote in the well-known book “Startup communities”, inclusion doesn’t just mean to invite as many of the people you think will fit into the community, it actually means everyone, according to Feld:
“Welcome everyone to the startup community. Everyone should have the perspective that having more people engaged is good for the startup community.”
Wise, experienced startup founders are essential in all communities that want to grow, but it’s important to not forget the youngest group of the ecosystem.
Young people who’s hungry for experience with their whole life ahead of them, and with“nothing to lose”, can be an incredible resource to a growing (or a stagnant) community. They’re often not limited by the same things as older, more experienced members of the ecosystem can be. Limited time, money, pride, are things young people more rarely have, and make them more free to be active and engaged.
Bacardit explains that even though the Barcelona ecosystem is getting better every year, there’s still too many older “rockstars”.
There is an established “startup mafia” which is everywhere, pulling the strings of the community. If you’re not friends with them, you won’t make it. The biggest pitfall is the conquer-all attitude of some companies that try to gain foothold within the community without caring about other companies.
The founder believes giving before getting, is the key to growth.
An inclusive startup community is where being a competitor does not matter. At this level, companies should partner more often than not, even if they’re competitors.
He continues:
If even Microsoft and Google or Apple partner from time to time, why shouldn’t startups?
Build something that lasts
In Barcelona we’re very lucky to have an extremely strong city brand, but not all cities have the world’s best football team, and millions of people coming to visit every year. If you don’t have a strong identity, it’s easy to start drawing lines to other places that have fostered world-famous entrepreneurs.
You often hear that cities brand themselves as the Silicon Valley of this or that, but if you want your startup community to develop in a healthy way and be a reference to other communities, I think it’s important to stay true to who you are.
For instance to call Barcelona the Silicon Valley of southern Europe would look good as a title in news articles, and create a bit of buzz, but to base your brand on your own talent and success is something that will last much longer, even though it takes more time and effort.
So if you’re part of a startup or a tech company you now know some of the things you should, and shouldn’t do. And Bacardit has one last encouragement to you:
I believe most companies should host an event or two a year just to learn what it can bring them, and how difficult it is. It’s a nice way to pay the community back.
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This post was written by Sindre Hopland, media manager at itnig.
CEO Oriol Vinzia checking up with his team at their Poble Nou offices.
The Barcelona-based startup will in October launch new features to their product, and let people work out across borders in both Spain, France and Italy. This was a natural move for the startup that recently have grown a lot in the B2B market, says CEO Oriol Vinzia:
We work with international companies that have workers that travel a lot. If you live in Barcelona, but work a lot from Paris, you’ll be able to choose amongst hundreds of gyms in both cities with our programs.
The itnig company recently closed a bridge round of €160.000 to keep focusing on their technology, as they’re planning on closing an A-round in the beginning of 2017 explains Vinzia:
We’re aiming for a round of €1 million or more, so we’ll start approaching investors from October.
2017 will be the year people talk about the disruption of gyms
At least that’s what CEO Vinzia think is coming as one of the big industries of disruption next year.
There are several big online gym marketplaces that are growing, and we’re the biggest one in southern Europe. I think the industry we’ll read a lot about the next year, is the disruption and digitalization of gym-services.
Brazilian competitor Gympass recently landed in Spain, but they’re only focusing on the B2B market, says Vinzia.
We’ve already established a strong B2C market of thousands of users, and we’ve recently seen great growth in our B2B market. Our challenge now is to find the perfect balance for our focus on the two markets.
Crossing the million mark
GymForLess offers three different programs that gives you access to hundreds of gyms. Here’s the map of Barcelona.
GymForLess had a turnover of €350.000 last year, and expects a turnover of €1 million by 2016, according to the CEO:
By 2017 we’re predicting a turnover of €2.5 million.
The company will now focus heavily on their tech product. With over 100.000 active users on their app they aim to add additional features that goes beyond working out and locating a gym.
We want to add personal trainers, possibly a marketplace to buy gym clothes, but also to add a social layer between the clubbers, so friends can challenge each other, and compare results from their exercises.
CEO Vinzia also adds that they’re looking into possibilities with connecting the app to pulse watches and other devices.
A startup, like any other asset, is worth as much as anyone is willing and able to pay for it.
That being said, let’s analyze the criteria that are often taken into account in M&A or investments:
· Economic factors: every startup must have progressive goals:
1. Generating revenues
2. Generating gross margin: sales minus cost of goods sold/services provided
3. Generating contribution margin: gross margin minus acquisition costs
4. Generating Ebitda
5. Generating net income
6. Generating cash flow for the business
7. Generating return for the shareholders
· Financial factors: is the acquisition of a company able to provide new sources of funds? Usually, M&A operations tend to be financed, from financial institutions to IPOs. Sometimes, a company on its own may have limited financial capabilities and a strategic acquisition may unblock substantial amounts of funds.
· Synergies: any upside or downside for the shareholders of the acquiring company. They can have many forms and I will focus on the positive ones since they are the ones that motivate investors to pay a premium:
1. Operational: optimization of logistics, restructuring of personnel, concentration of offices, etc.
2. Commercial: companies always have comparative advantages. Imagine a company with a great commercial network that wants to acquire another company that has a product portfolio that is complimentary to that of the first one. An acquisition would make sense, as long as cannibalization is minimized, if the first company could generate more value from the portfolio of the second one with their own existing clients. It would also allow to better segment the market or eliminate competitors.
3. Lobbying: the increase in the total size is sometimes wanted since it offers access to a “higher league” level. You may reach key people that before were out of your reach.
4. Brand: sometimes, companies with deep pockets want to get a PR push.
5. Tax shield: companies that have accrued losses over the years will have tax benefits in case they are able to turn the red into black. That is very attractive as long as there are no corpses in the closet which are usually spotted after a proper due diligence.
6. Other: “oh, I really wanted that corner shop” or “I always wanted to own a football club” or “I’ve heard real state is a sound investment since prices never drop” or “I have a friend who has invested in a blue collar job app”…
When we talk about startups, we will focus only in valuations made to raise money. These are some methods used, which may be used alone, combined or compared:
· Discounted Cash Flow (DCF): is the logical one. It evaluates a business like a flow of money in and out, adjusted to the present value by the discount rate.
Example: you plan on opening a doughnut place. At first, you need to make an investment of 1 million Euros. You start operations from day one and generate a positive cashflow of 200.000€. A cashflow is the net sum of all payments, incoming or outgoing. Remember that an expense is not the same as a payment. An expense is an economic thing while a payment is a financial thing.
When we talk about payments, we talk about finance. Considering one of the axioms of finance, which states that a Dollar today is worth more than a Dollar tomorrow (unless there is deflation), the 200.000€ will be worth less today, exactly 170k if you discounted at 15% (the discount rate is the interest rate you expect the investment to produce, and it is inversely correlated to the risk involved in the operation). You may add as many years as you want, but it is advisable to have a perpetuity value calculation instead of year 6 and so forth. A perpetuity is calculated dividing the previous yearly cash flow by the discount rate. And so forth.
At the end, you will add the net present value of all future cashflows and that will be the startup valuation. If this figure based on your predictions is higher than the 1 million it costs, the investment will make sense for that investment at that discount rate. In the other hand, if the investor does not agree with an assumption from the business plan, he/she will have a different valuation in mind. Here’s where the negotiation begins.
DCF — Present values of future cash flows
· Multiples: a company that already has some revenues can be valued multiplying a metric. That multiplier changes with the sector of activity, the growth rate, the total available market and specifically the risk perceived by the investor.
— MRR: in companies with recurring revenue, specially the ones with a subscription model, are evaluated based on the Monthly Recurring Revenue. In SaaS, that multiple can be around 100.
— ARR: same as above, but with Annual Recurring Revenue, which results from multiplying last months MRR by 12. In SaaS, that multiple can be from 8 to 12. However, I am only stating what some VC’s admit publicly, there have been operations far above these multiples.
— Sales: some companies, specially those with more stagnant figures, can be valued at 5 times sales. However, this is a vanity metric since a company is not made to sell, but to make profits. The rest are NGOs.
— EBITDA: is the net result from operations so it is pretty close to a cash flow if everything was paid at the moment the invoice was issued. That includes sales, COGS (Cost of Goods Sold), acquisitions expenses and fix costs, but exclude amortizations, activation of fixed assets such a development, interests and taxes. The EBITDA multiple is inversely correlated with the amount of CAPEX investment needed each year. It is only possible to apply on companies that already have a positive EBITDA, of course. The general multiple rarely steps out of the 5–15 range, having the average at about 7–8. I insist, it all depends on many other factors, I would personally never make an investment based on an EBITDA multiple outside of the stock market.
— Formula: there is another complimentary metric, also more suitable for companies with recurring revenues. I also do not encourage anyone to use it since a company is always something more that a formula, but before entering a negotiation, you must know all possibilities to be able to discuss them properly. Value = (MRR * Gross Margin %) / Churn % . There are multiple ways of defining the churn, one way should be the average percentage of active users you lose in a month. The lower the churn, the higher the value.
· Balance sheet: the purpose of accounting is to have financial statements that reflect the real value of a company. In a balance sheet there are assets on one side, everything the company owns (cash, receivables, inventories or fixed assets) and on the other side there are the liabilities, which is everything a company owes (payables, loans…) and the Equity, which is basically the difference. The Equity is the value that’s left for the shareholder. So the theoretical value of a company is the subtraction between what the company owns and what the company owes. However, in startups, this is a joke. The real value is never reflected because an increase in equity can only come from a direct investment or a higher profit. Profits and startups are an oxymoron, both because they tend to invest in the long term and because the recognition of earnings, and therefore the increase in Equity, goes hand in hand with Friday the 13th main character’s, Jason Taxes.
· Esoteric methods: sometimes, some celebrities raise money over a power point. I’ve heard some investors saying that the valuation is roughly 1M€ per founder, as long as they are rockstars. This type of situations may happen when an entrepreneur has a good track record or when, for any reason, there’s an oversupply of investors for a specific project. Should Elon Musk in the flesh approach you and ask for your money for a new venture he would lead, would you demand a business plan and a couple weeks to think it over?
You may as well throw some cards before using some methods
All that being said, remember that a valuation is always a subjective amount that is on someone’s head and that depends of other factors not mentioned above. Make sure you pitch well and give the valuation you are asking at a moment that is convenient for you. At the end of the day, the valuation you will get will depend a great deal in the show you put on and the trust you generate in the investor. So make sure you practice and learn with lots of investors and that you control the momentum.
Also bare in mind that the hardest ticket to get is the first one. No one wants to be the first. If you can secure a reputable first investor, others will follow with less questions asked.
What is your preferred method? Did I miss something important? Do you disagree in some of the statements? Feel free to discuss it. You are also welcome to suggest new topics we can cover.
