The 18th Century Internet

450554697_2969102f45 I just finished reading Tim Walker’s The Social Media Are Not So New, which draws some interesting parallels between modern social media and the changes in communication models that were at the heart of the Protestant Reformation in 16th century Europe. In particular, he looks at technologies that enabled “narrowcasting”, i.e., inexpensive one-to-small-group communications. He also defies the Marshall McLuhan concept that “the medium is the message”, showing how in social media, the message frequently jumps across different media. A fascinating read – highly recommended.

In The Virtual Handshake, we open the book with a look at another historical parallel to social media – The Lunar Society:

In 1765, a small group of businessmen/inventors in Birmingham, England, formed a discussion group. They called it the Lunar Society, because they met every four weeks during the full moon so they could see their way home following their late-night discussions. The Lunar Society’s distinguished membership included James Watt, inventor of the modern steam engine, and Josiah Wedgwood, founder of the Wedgwood china company. Other members were some of the most renowned inventors, manufacturers, scientists, engineers, and physicians of the day. Their personal interests varied, but they came together to talk with other equally learned and creative men. Initially, they discussed the application of technology to business, but their conversations quickly expanded to include science, literature, philosophy, and politics. Some historians credit this group with helping to launch the Industrial Revolution.

The Lunar Society also routinely invited visiting businessmen, dignitaries, and politicians to attend meetings. As founding members moved away from Birmingham, they continued to participate through mail. So did many of their visitors, including such luminaries as Benjamin Franklin and Thomas Jefferson.

Although the core group was founded in Birmingham, the members quickly learned the value of continuing their dialogue between meetings and in extending their reach beyond their local community. Never larger than fourteen members, approximately half attended any one meeting. However, the volumes of letters they wrote to each other-predecessors of e-mail-carried the conversation beyond the walls of their meeting place.

You can learn more about The Lunar Society at:

Connecting the Corporate Dots: Social Networks Reveal How Employees and Companies Operate

The Wharton newsletter reports:

“With the recent disclosure of wiretapping by the National Security Agency and the booming success of sites like MySpace and Friendster, social networking is much in the news today. But serious interest in social networks can also be found among academics, consultants and corporations seeking to deepen their knowledge of how companies operate. While organizations have been aware of the power of social networks for some time now, researchers at Wharton note that mapping these connections can yield some potent insights, such as how board members interact within and among companies, and how employee relationships can be better understood to improve productivity and the dissemination of ideas.”
http://knowledge.wharton.upenn.edu/article/1500.cfm

People are using SNA (social network analysis) in the sports world as well. Via Noor Ali-Hasan on the SOCNET mailing list, I saw a social network analysis of the FIFA World Cup Germany 2006 final match between Italy and France. “It shows the passes from every player to those three team-mates he passes to most frequently. Strength of arcs displays the number of passes. Size of nodes displays the influence (flowbetweenness) of a player.”

http://www.visualcomplexity.com/vc/project.cfm?id=342

Sadly, head-butting doesn’t show up in this chart.

UPDATE: Alan Reifman wrote to SOCNET:

The World Cup soccer passing diagrams are great, and I appreciate Dr.
Ali-Hasan for notifying the list. As some of you may know, I’ve done some similar mappings for U.S. college basketball in recent years (although not nearly as elegantly). Most recently, I presented a poster on this at the 2006 Network Science conference at Indiana University, and in 2005, I presented an earlier study at Sunbelt. For those interested, my research page on basketball passing can be accessed by clicking on:

http://www.hs.ttu.edu/research/reifman/netsci2006.htm

A Dutch Business School Using Social Network Analysis to Improve an MBA's Value

How a Dutch B-school is helping its diverse student body develop lasting networks:

One answer, at least at RSM, is technology. Dianne Bevelander, executive director of RSM programs, is using software to map the networks that students form among themselves and track the student connections over time. School administrators hope to use the lessons learned to teach students how to more effectively create the networks they’ll need to succeed in a global business environment.

Two weeks after students arrived in October, Bevelander asked them to identify their personal networks. A questionnaire asked them to name students with whom they work, those from whom they seek ideas, and those with whom they socialize. Then Bevelander color-coded the three types of connections to produce an image of the current class that, on a PC screen, looks like a lacework project gone haywire.

But patterns emerge. “This group works well together as a team,” says Bevelander, pointing at an octagon representing one student work group. “But if you look at the social network, they don’t talk to each other at all.” Indeed, the lines representing social connections all lead to other groups. The lesson: Teams can get the job done even if the members don’t like each other that much.

more…

Research Finds That Success Might Be Related Not Just to Whom You Know but to How You Communicate with Them

Research Finds That Success Might Be Related Not Just to Whom You Know but to How You Communicate with Them

Nathaniel Bulkley, a doctoral student working with assistant professor Marshall Van Alstyne at the University of Michigan School of Information, won the first annual Visible Path Graduate Student Award for new research on social networks and professional performance, the International Network for Social Network Analysis announced (INSNA) today.

Bulkley analyzed how white collar workers use social networks to improve professional performance. The hypothesis that success is related not just to whom you know but how you communicate with them was supported by key findings including:

— Professionals’ use of social networks evolves over the course of their career from accumulating relationship capital to exercising it

— Frequent, short communication outperforms lengthy, infrequent communication in efficiently moving information through a social network

— A central position in an organizational social network is consistent with higher individual performance

For his research, Bulkley conducted surveys and studied six months of email data and accounting records from an executive recruiting firm representative of professional services firms organized around client practices.

An unexpected finding was a lack of relationship between a recruiter’s private rolodex and network size or job performance.

More information on this year’s winning paper, “An Empirical Analysis of Strategies and Efficiencies in Social Networks,” is available at www.centralityjournal.com.

The Great Sales and Marketing Debate: The Cagey Sales Veterans Debate the Young Up-and-Comers

I recently was fortunate to participate in a panel discussion on “The Great Sales and Marketing Debate: The Cagey Sales Veterans Debate the Young Up-and-Comers”, sponsored by the New York Software Industry Association, March 13, 2006, held at JP Morgan Chase.

Allen Reynolds and Jesse Mandell all took some notes, which we have merged in the summary below.

Master of Ceremonies, Bruce Bernstein, welcomed and introduced the two questioners and four debaters.

Questioners: Sherri Sklar and Ruth P. Stevens

Sherri Sklar, President, Sherri Sklar Strategies, LLC
Sherri Sklar has built a star track record in helping organizations obtain exceptional results. Over the last 20 years, she has enabled organizations to make dramatic turnarounds, helping under-performing divisions achieve significant growth in the most difficult of marketplace conditions. Ms. Sklar has helped organizations in marketing strategy and execution, sales strategy, sales execution and performance, business development strategy, channel management, and communication skills training. A frequent presenter at seminars and conferences, Ms. Sklar practices and teaches ‘peak performance delivery’, a proprietary technique Ms. Sklar employs to help clients achieve optimal results. Ms. Sklar is President of her own consulting company, Sherri Sklar Strategies, LLC., (SSS). SSS is a sales, marketing and business development consulting firm that delivers measurable results from assessment, proven strategies, and excellence in execution. Ms. Sklar received her MBA from Harvard Business School and her BA from Newcomb College at Tulane University.

Ruth P. Stevens
Ruth P. Stevens’ expertise in customer acquisition and retention derives from a decade and a half of hands-on marketing for both large enterprises and start-up companies. Just prior to beginning her consulting practice, she served as chief marketing officer at an Internet company in New York City. Before that, she had broad responsibilities for direct marketing at three corporate giants– IBM, Ziff-Davis and Time Warner.

At IBM, she served as director of direct marketing, North America, for the IBM hardware, software and services brands, leading a team of 140 direct marketing professionals. She then moved to the IBM Software Group, where she directed global direct marketing.

At Ziff-Davis, she served as vice president of marketing for the electronic publishing division, and later helped launch Ziff’s Consumer Media Group as its vice president of marketing. At Time Warner, she worked in marketing, new business development and general management for the Book-of-the-Month Club and Time-Life Books.

Ruth has been a regular columnist for DMNews and is a frequent contributor to a variety of marketing publications. She teaches marketing to graduate students at Columbia Business School and NYU’s Stern School of Business. Ruth serves on the boards of the Direct Marketing Idea Exchange in New York City and the Direct Marketing Club of New York.

She is past chair of the Business-to-Business Council of the Direct Marketing Association and holds a BA from Hamilton College and an MBA from Columbia University.

Debaters: Alan Kaufman, Ed Martino, Larry Cohen, and David Teten

Team Old School: Alan Kaufman and Ed Martino

Alan Kaufman
Alan Kaufman is a 38 year veteran of the Computer/Software/IT Industry. He was a founding member of the management team of Cheyenne Software, Inc., where as executive vice president of sales, he grew the business from $1 million in fiscal 1990 to over $200 million in 1997 to propel Cheyenne into the 13th largest software company in the industry. He has served as an officer in the Navy and holds a BS in Electrical Engineering from Tufts University. He serves on the Board of Directors of NetIQ, a leader in server and security management, and is a Trustee of Outward Bound USA. Alan also serves on the Board of Directors of NYSIA and is its founding president.

Ed Martino, Director of Industry Business Solutions, Sprint Nextel
Ed Martino is currently the Director of Industry Business Solutions for the new Sprint Nextel Company. He has worldwide responsibility for the market penetration, solution development and overall growth in industry sectors for Financial, Insurance, Media and Professional Services, a $2b business area. Prior to this role, Ed was the Director, Northeast Corporate Sales for Nextel Communications. Other roles have included the Senior Vice President of Marketing and Sales reporting to the President for two companies both in the global systems integration business. Ed also served in various global management positions for the IBM Company for eighteen years.

Ed is a member of several boards including the NY Software Industry Association where he is the Vice Chairman.

Team New School: Larry Cohen and David Teten

Larry Cohen, EVP, Heartbeat Software
Larry Cohen is one of the most creative and inventive minds in the software business. He has that rare ability to listen to a business problem, quickly isolate the key issue, and translate that insight into a practical software solution.

From his early days in the industry, Mr. Cohen has demonstrated a remarkable instinct for identifying a new technology solution and putting it to work quickly. Shortly after graduating from UC Berkeley, he pioneered the use of Webcasting in the healthcare industry. Soon after, he received an NIH grant to conceive the first online adherence programs ever developed.

Larry was a driving force behind the first enterprise-class, web-based software products for Marketing Content Management (MCM) in the financial services industry. He devised a highly innovative technology and methodology for performing online competitive intelligence. And lately, he’s been fashioning a new form of CRM that integrates data-mining and web services.

Throughout his career, Larry has closely advised some of the world’s most prestigious organizations, including Amgen, Novartis, GSK, Goldman Sachs, UBS, and Intel.

David Teten, CEO, Nitron Advisors
David Teten is a serial entrepreneur and CEO of Nitron Advisors, an independent research firm which provides hedge funds, venture capitalists, and other institutional investors with access to a network of frontline industry experts. He is also coauthor of The Virtual Handshake: Opening Doors and Closing Deals Online, the first business guide to how to use blogs, social network sites, and other online networks to accelerate your sales. He blogs on the Circle of Experts Brain Food Blog and at TheVirtualHandshake blog. David formerly worked with Bear Stearns’ Investment Banking division as a member of their technology/defense mergers and acquisitions team, and was a strategy consultant with Mars & Co. He holds a Harvard MBA and a Yale BA.

NOTES ON THE EVENT:

Larry Cohen, EVP, Heartbeat Software

David and I see 5 main differences between the ‘old school’ and the ‘new school’ of sales and marketing:

1. The new school sells highly focused products. The new school goes after underserved, highly niche markets (and submarkets) that do not have much competition or many me-too products. For example, Heartbeat Software does not sell CRM to pharmaceutical sales organizations. We sell a highly specialized CRM product to Medical Affairs Departments and their Medical Science Liaisons. Due to our specificity, we are able to work with the majority of pharmaceutical companies and offer them incredibly specific learning from their competitors. We aim to penetrate the majority of these markets (and have done so in pharmaceuticals). Similarly, Nitron Advisors focuses specifically on introducing their clients, hedge funds, VC funds, and law firms, to industry experts—and more specifically experts in transition.

The new school understands that we need to do a few things very well and that companies buy software because their competitors have bought software – period. One client told me that if no one has bought the software they would never buy it. If everyone has it — what’s the point? But if a few key competitors have purchased, they will quickly jump on board. Non-vertical specific back-up software, data storage, or cell phones are not specific enough to attract the new school.

2. The new school does not waste valuable marketing dollars on soft, non-focused, and unproven channels. The new school uses on-line and off-line tools that have a proven, measurable ROI by creating a direct, track able, one-to-one relationship with our customers. Among the major mechanisms for this:

+ highly targeted old school cold calling with a new school spin; selling a proven piece of software to a sub-market that is not being called on;

+ e-mail marketing to very specific titles and organizations where we have market share, with tracking provided by software provider;

+ Pay per Click search engine advertising (Google, etc.)

+ Pay per Call search engine advertising (Ingenio, etc.)

(Teten’s editorial note: Eloqua offers some useful marketing ROI tools.)

3. The new school focuses on smarts & network, not necessarily experience. Sales methodologies are interesting. They are also boring and notoriously difficult to get to stick or to actually change behavior. The new school understands that growing a stellar sales team is about hiring smart, energetic people who are great at sales. What makes a good salesperson? The new school knows that it is one thing: A person that keenly understands the part of themselves that other people relate to and who can leverage that part to get people to buy. We hire those people. No matter what experience, sales training, or existing client relationships they have. Google famously put a billboard up on the road from San Francisco to San Jose that had a complex mathematical problem on it. If you solved it, you gained access to a recruiting website. The new school knows that smarts goes a tremendously long way.

4. The new schools taps online networks, not only face-to-face networks. Consider that 84% of U.S. Internet users have used the Internet to contact or get information from an online group—more than have used the Internet to read news, search for health information, or even to buy something. More and more of us are using online networks, such as blogs, social network sites, virtual communities, and other “social software” as a daily part of our business life. All the major Internet players, including Yahoo!, Microsoft, AOL Time Warner, eBay, and Google, are already offering social software tools and planning more in the near future. Bill Gates, John Kerry, and other celebrities are among the over 2 million people currently registered on LinkedIn, a popular business networking site. Nitron Advisors uses these technologies both to target customers and to recruit new industry experts on our clients’ behalf.

5. The new school sells based on product quality, not just on who plays better golf. Many salespeople spend a tremendous amount of time and energy playing golf and drinking beers with customers. They believe that a personal “I like him” relationship is key to closing the sale. In the new world, that relationship is helpful, maybe even a prerequisite, but it doesn’t close the sale.

Neil Rackham, founder of sales consultancy Huthwaite, conducted a study of whether salespeople who built good relationships would really make more sales:

“We found that sellers who dealt successfully with small retail outlets in rural areas seemed to rely heavily on personal factors in their selling. . . . For example, the seller might ask, “How’s Ann enjoying her riding lessons?” . . . In rural areas, where the size of the sale was small, successful sellers used more of these personal references than did sellers who were less successful.”

“But it was a different story in the large urban stores, where the average sale was more than 5 times the size. We found no relationship between success and reference to personal issues[emphasis added].”

… “I’ve heard many other professional buyers complain about salespeople who try to open calls by cultivating areas of personal interest. The last thing a busy buyer wants is to tell the tenth seller of the day all about his last game of golf. . . . Many buyers become suspicious of people who begin by raising areas of personal interest.”

Source: Neil Rackham, Spin Selling (New York: McGraw-Hill Book Company, 1988), 140.)

Alan Kaufman

After Cheyenne sold, I retired. Soon after, I was approached by the VP of sales for NetIQ Corporation and asked where I found my stellar employees. The answer was that I trained them. Training is incredibly important. Every new situation I went into was different. I never took a cookie cutter approach to anything. A good sales/marketer carries a quiver full of arrows and can use each one for any new situation that arises.

Sherri Sklar, President, Sherri Sklar Strategies, LLC

As my first question, can you sell a complex software solution without meeting the client face to face?

Ed Martino, Director of Industry Business Solutions, Sprint Nextel

Yes, you can, but I wouldn’t advise it. If it’s complex, it needs lots of service. The biggest cost is in the service side and your goal is to build a bridge to the customer and use them as a referral to build business.

David Teten

Yes you can. Salesforce.com does it all the time. That said, the more complex the product and particularly the after-sales support, the more helpful meeting in person can be.

To sell virtually, you first need credibility (your potential clients and competitors look you up online and evaluate the validity of your service) and second, effective relationship management.

Ed Martino

I disagree with David. Most of Salesforce’s sales are to corporate customers and their success depends on the time that they spend with their customers.

David Teten

But it is impossible for a company to meet with all their smaller customers.

Alan Kaufman

You must identify how complex a sale is and whether you need to go out there to meet face to face.

Ruth P. Stevens

To be competitive in getting the product to market, how should the marketing be structured? What is the best marketing approach?

Larry Cohen

At Heartbeat, customers pay for product development. Marketing should focus on specific departments in like companies. When we call someone who works in hedge fund marketing, and say we have a product designed just for him, we get a good response rate. It’s not spam if the person is interested in buying what you sell.

Alan Kaufman

Good marketing programs include people who are interested in talking to analysts to see how the customers are buying. I don’t believe in print advertising, especially if you are working with a small budget.

Bruce Bernstein

How should you go after your target market? How do you enable the sales to happen? How do you structure the sales team?

Ed Martino

It all depends on the size of companies. It always takes lots of research and phone calls, and knowledge of the competition. Draw 3 circles:

1. What business am I in?

2. What are the customers’ needs?

3. What does the company have to offer?

The little space where the circles overlap is what you develop and present to the CIO.

Larry Cohen

Small software companies are unable to pay to talk to analysts, so they must talk to businesses in the area for the problem they are going to solve. Refer to previous success that you’ve had at one or two other companies.

Ed Martino

I agree that if you don’t have a large enough budget, don’t talk to analysts. Talk to smaller CIOs from a niche group and then work your way up to the top.

Larry Cohen

I agree with Ed. We use that business model at Heartbeat Software.

Ruth P. Stevens

The marketing department must provide good leads for sales force. How would you suggest that you develop these leads?

Alan Kaufman

Having an inside telesales group that goes through incoming leads and cold calling is good. You also need to develop a good computerized process that is repeatable. Leads from the Internet need to be shown to the inside sales group as well.

David Teten

We get to the big dogs through networks. Each member of our sales team (and of our whole company) has a personal network that we can tap.

In addition, no surprise, we use online networks. We post intelligent comments on someone’s blog to make an entrée, and get into a target’s network in that manner.

Microsoft has approximately 1,200 bloggers out of 55,000 employees. There is no excuse to cold call Microsoft; just contact a blogger in your target area, and use their blog as a conversation starter.

Ruth P. Stevens

What incentives do you use for the sales team to follow up?

David Teten

Pay people a good commission. Develop a sense of ownership. Give options.

Larry Cohen

We have company wide minimums. If it’s a top 25 pharmaceutical company we go in person and talk to them

David Teten

In order to get leads, people should be thinking about how to talk to their particular network. This method is much easier than getting leads from a database company.

Bruce Bernstein

The old school is emphasizing structure and the new school is going with leads. We hate the people who contact people for business by my boarding school alumni directory. What do you think about David’s method?

Ed Martino

If you have a niche, then you don’t need to worry about making the phone call. If you’ve got value and you’ve done the research, then the other person may actually appreciate the call.

Bruce Bernstein

It might also be a generational thing. The youngsters don’t mind getting the networking call.

David Teten

The issue is how to get the most targeted individual. Email used to be an effective means, but today, email is broken. You can’t reach people easily via email due to spam filters and overuse of the email medium. If you can find the name of person in your sweet spot, call them. Even the shallowest referral is better than an cold call.

Sherri Sklar

What are the most important things that someone in marketing can do to create a buzz for their firm and their product?

David Teten

Get to opinion leaders. Get to bloggers. They are very powerful way to spread word of mouth. That’s a large reason why companies like Foldera have attracted over 1 million downloads—great coverage in influencer blogs like Techcrunch and Om Malik.

Lead events. Be a speaker and put yourself in a leadership position. You will reach far more people speaking at a conference, than you will handing out business cards before one. Reach 100 people, not 5.

Ed Martino

Blogs sound good. We want to look into them. Press releases are also good. Sometimes a trade show is a good idea, if you can find ways to bring customers too it. You will create a buzz just from saying that you are going to be at the show. Target is the key word. Marketing to promote your product in a targeted way is very important.

Larry Cohen

For selling to institutional investors, I lean more toward conferences on asset management trends, rather than trade shows, since marketing and business people will be speaking at them. Pay for your sales people to attend, and shake hands and create relationships. It’s cheaper to send 5 salespeople than to get one corporate sponsorship.

Alan Kaufman

The trade shows that you choose to attend must have your customers there. I like to allow our customer a chance to demo our products. If possible, get a small booth so people can at least see your company logo.

Ed Martino

It’s all about ROI. It can make the difference between a million in sales and 60-70 billion in sales. ROI is key. You must be selective and you must leverage the money that you put out to get a return.

Sherri Sklar

How do you grow a stellar sales team? Do you simple hire energetic, smart people, or is there much more?

Ed Martino

I am big on balance. People with fire in the belly are important, but what you really need is diversity because it enables different groups and people to bring in their abilities to the sales force. You want young people who are energetic and idealistic to bring in pep, and older people who can bring in learned skills to pass on. You also need people from the industry for which you are selling. The younger people will give you a lot of overtime. Motivation, however, is key. People need to feel empowerment and ownership.

Larry Cohen

We are a $10m company. Each person needs to meet their quota. We do, however, go after a wide range of people. The key is to find people who know what about themselves makes them successful. We interview a ton of people, but after they are hired, 99 percent of them stay.

Ruth P. Stevens

As sales managers, how do you optimize profits to your firm when the sales team is always trying to give away a deal?

Alan Kaufman

I think it is sloppy to sell on price. You can always cut a deal if you have to. If they cut a deal too much, the loss should come out of the salespersons percentage.

Larry Cohen

We need to train people to stay by their product.

David Teten

Another idea is to pay your sales team a commission on margin instead of based on revenue. This margin info should be shared with your team, but it often isn’t. We show all our new employees our full business plan on their first day of work, because we want them to understand the big picture.

Ed Martino

In smaller companies, I would drop price to get marketing traction. If the customer will eventually become a testimonial, then it’s good. You need to take risk. Larger businesses need to have focus. They need to pick customers. At the end of the day, you want sustainability. In smaller companies, salespeople don’t see the sales price, and that’s why they try to give it away for lower.

Sherri Sklar

If someone says that he is interested in your software if you can prove to them that it is buy worthy, do you fly someone out? How do you approach the relationship?

Larry Cohen

Because products are focused, we phone and then fly to meet with them. I’ve learned that we are more likely to make the sale if we stick to the price, because if we slide, then they may question the value of the product more and more.

Alan Kaufman

In today’s world, regions are a lot larger so you have to be careful about support. How would you support your product in South Africa? This scenario requires discipline in the sales force. They should know not to go after crazy leads. If it’s a one-time, you might want to walk away, but if it’s American Airlines in Texas, you have a lot of chances to make other sales.

Sherri Sklar

What technologies can you use if you don’t know what the return will be, you don’t want to lose it the sale, but you also don’t want to send expensive resources out?

David Teten

Use all the media: IM, email, webconferencing, phone, in-person meetings. This allows for a steady progression of relationship closeness. Professor Caroline Haythornthwaite has done some very interesting research in this area showing that the more media channels you use, the higher the trust levels that develop between two parties.

QUESTIONS FROM AUDIENCE:

Scott Lichtman

How do you feel about PowerPoint and its role in sales pitches?

David Teten

People buy from people, not from paper. The more talking I do, the less selling I do. Communicate value and use a slide show for support. You want the attention focused on the company and the project, not the PC.

Ed Martino

I am seeing that the PowerPoint is here to stay. Today, it is more animated and you are trying to stay way from stale slides. There is more animation and stuff over the net. Webinars etc. are a great way to get your story in front of a lot of people.

David Teten

Humans are wired to be interactive. PowerPoints are passive, and your potential customers will learn less and buy less when they are passive. You need to keep them active if you want to keep them interested.

Bruce Bernstein

What method was used before PowerPoint?

Alan Kaufman

We used flip charts and then foils. I love listening to good speakers. A major problem today is that people don’t speak to the audience. Also, never read from your charts. If you read to your audience, you will lose them. Using a wipe-board works for developing an idea in front of a crowd. Using a PowerPoint can be a disservice.

Audience Member

In your experience, what best motivates a sales force?

Ed Martino

Incentives work if they are fun. Recognition of achievement is also important. Build a plan at the beginning of each year. Each person should know what the accelerator and multiplier is. If they blow the doors off, they will know what the cap is.

Alan Kaufman

Salesmen have fragile egos, and when they are in a losing streak, it gets to them. Give recognition to the people who perform the best. This has the incredible effect of reinforcing their positive performance.

Audience member

The three most important things for generating leads are current clients, (stealing from) competition, and referrals.

Larry Cohen

I find that if they have a rolodex, it may be all that they have to offer. That’s why we don’t go with them. At some point the rolodex runs out.

Alan Kaufman

There is nothing wrong with a portfolio, especially when you are trying to capture a vertical.

Larry Cohen

We put out our own PR, and when we come out with a new product, we send out targeted emails.

Bruce Bernstein

Earlier in evening, David Teten mentioned that email was broken. Ed Martino said that there is no place for instant messaging in corporate America. Please expand.

Ed Martino

Instant messaging is internal. Email should only be used because everything needs to be logged. Instant messaging isn’t on the radar screen, and it can’t be logged or archived.

David Teten

As the young grow up, instant messaging will become an increasingly important medium. There are plenty of companies which sell archiveable IM and email solutions. IM is being used regularly across corporate boundaries—we use it with our clients.

Bruce Bernstein

Are there fundamental differences in advertising that that came out during this discussion?

David Teten

1) There is a movement in spending from advertising in mass media to PR. We are so deluged with advertising that it has lost efficacy. However, people do read the actual content in the magazine around which the advertising is wrapped. A good PR firm can get you in there as content. We get sales leads every few weeks from a Businessweek article about us from last year.

2) Secondarily, there also exists a movement to advertising where you can calculate an ROI. We’re moving from pay per click, to pay per action or pay per call. Compare that with throwing a million dollars at the Superbowl and seeing what happens.

Ed Martino

I have to disagree because my company (Sprint) sponsored the Superbowl! It depends on the industry. If you are in a big industry you have to make a statement, so you have to go with pro golf, the Super bowl etc. If you do not advertise with it, people ask why you aren’t in it. Such mass advertising is important.

Alan Kaufman

No one can afford TV. PR means hiring an agency. It’s best if you can get someone to develop relationships with the editors of blogs. You have to stay on top of people who can influence the influencers

CLOSING STATEMENTS:

Ed Martino

There is more in common between the old school and the new school, because it is an evolution from one to the other. Sales and marketing is fun and the interrelationship and interdependence between that and finance is important. Ethics is also very important. Ethics is everything. You need to have respect for your customers and your competition. We need to be ethical about how we do our business.

David Teten

We’re in the advice/education business. Ironically, there is a lot of advice out there in the world, but most people don’t absorb it and don’t follow it. They listen but don’t learn.

I encourage people to internalize the ideas that we’ve discussed here. I hope that people learned something that they can take home and incorporate into their sales and marketing strategies.

And as last words: A.B.C.—Always Be Closing.

LinkedIn Cofounder on: Get Your Job Done

I saw a very insightful post from Konstantin Guericke, CoFounder of LinkedIn on MyLinkedInPowerForum. He writes (reposted by permission):

________________________________________________________________________

Message: 1
Date: Mon, 29 Aug 2005 22:09:35 -0700
From: “Konstantin”
Subject: The power is in the network you already have

Virtually all professionals nod enthusiastically that “relationships matter,” but only a small group heeds the advice below. They start networking when they have a need. But that’s a really bad time to do it.

One of the core networking principles has been that you need to network proactively, meaning meeting lots of new people and build relationships, so you have people you can fall back on you need a job, an expert, an investor or a business partner. And you have to network with lots of people because you just don’t know what kind of relationship you may need.

And many networking sites try to encourage this old way by being a sort of virtual networking event where you can get to know lots of people.

LinkedIn turns this on its head by focusing on relationship management and giving members access to the people you need through the people you know.
The people in your personal networks are contacts on demand. As long as you have strong relationships with, say, 100 people, you have on-demand access to hundreds of thousands of people-far more than you could ever meet through networking.

So, what this means is that LinkedIn obviates the need to network in the traditional sense. Unless you are a young professional just getting started on your career, you already have a network just from working-this is a network based on co-workers, bosses, clients, business partners, investors, etc. And this network is strong because these people know the good work you have done and are capable of doing.

In the past, this network was often insufficient because it was just 30 or 100 or 300 people, depending on the type of profession and length of your career. The person you needed would often not be among this group. But through LinkedIn, you have access to an on-demand network, so once you have brought the group of people who know you and your work onto LinkedIn (and these days, many are already on, so it’s much easier than two years ago), you can just relax and know that you can reach the people you need when you need them-without having to get to know them all “just in case.”

This is a fairly radical notion that transcends most existing networking philosophy. And it allows you to focus on working, rather than networking.

Once the network of people who know your work is built, when you need someone, search and you will find. Ask for an introduction, and you will get in touch along as your connection provides a strong introduction and you have a win-win proposition.

As you help your connections reach the people they want to meet, you strengthen your bonds with both parties you are introducing. The best way to expand your list of connections is simply to continue to do work and do it well. Your connections list will grow, and each connection will be an avenue to thousands of new contacts that are accessible on-demand, when you need them.

-Konstantin

Konstantin Guericke
VP Marketing and Co-Founder, LinkedIn
Professional Profile

This is very consistent with some of the themes in our book. I think that spending endless hours chatting at cocktail parties or chatting in online communities is a waste of time from a professional point of view. It’s defensible as recreation but not for business development. Whatever your job is, do your job well, and success will flow from that. What counts is not the number of people who know you, but the number of people who know you, trust you, and will pay you to do what you do.

Relationships between directors of major life science related companies

Here’s a modeling tool to look at relationships between directors of major life science related companies. Go to www.recap.com and click on “power brokers of biotech”, and you’ll be taken to a real-time building screen. This is a free public version of similar analyses of power networks available at Capital IQ, LinkSV, and TheyRule.net.

Via David Carpe on SOCNET .

Contact Network Corporation Raises $1.6M

Geoff Hyatt forwarded me this press release below, which isn’t even on Contact Network’s own home page, reporting that Contact Network raised $1.6M. When we earlier profiled Contact Network, we reported that:

As of March 2004, Contact Network has 16 corporate customers and 24,500 paying seats. The Boston Consulting Group and Dartmouth’s Tuck School of Business are among their clients.
….As of March 2004, Contact Network’s revenue run rate is about $1.5 million annually.

Combine this news with Yahoo!’s launch of Yahoo! 360 and Yahoo!’s long-awaited acquisition of Flickr, and it’s clear just how many investing opportunities there are in social software.

FOR IMMEDIATE RELEASE

Contact:
Lisa Allocca
Red Javelin Communications, Inc.
(978) 470-2227
lisa@redjavelin.com
www.redjavelin.com

Contact Networks Raises $1.6M in First Round Financing

Private Investors include Search Industry Veterans

Boston, MA – March 21, 2005 – Contact Networks (www.contactnetworks.com), a leading next generation enterprise search company, announced today the closing of its Series A funding. The financing round came from individual and institutional investors and includes the founders and management of the successful search technologies TripAdvisor (acquired by Interactive Corp, NASDAQ:IACI) and Direct Hit (acquired by AskJeeves, NASDAQ:ASKJ). The funding will be used to expand the sales, marketing, and support teams and to accelerate Contact Networks’ ability to enter new markets.

Contact Networks provides an innovative and specialized form of search called Enterprise Relationship Search that helps employees answer the common question “who knows whom…” in the corporate setting. Relationships win business and Contact Networks finds important business relationships that already exist within a company. It helps people take advantage of friendships, enabling them to see hidden connections two or three degrees away in order to find new clients or establish new sales.

“Enterprise Relationship Search is emerging as a business application that drives revenue growth,” said Geoffrey Hyatt, CEO of Contact Networks. “If you are responsible for sales, client development or business development, you want more and better relationships with your prospects. Discovering a colleague down the hall or across the country who can make that initial introduction helps to access and win that account.”

Search Industry Veterans Invest

Additionally, investor Langley Steinert, Chairman and co-founder of TripAdvisor, will join the Board of Advisors at Contact Networks. Prior to co-founding TripAdvisor, Steinert was VP of Marketing and Business Development at the Internet commerce tools company Viaweb (acquired by Yahoo!). Additional investors include Stephen Kaufer, CEO and co-founder of TripAdvisor, David Parker, CEO of DigitalAdvisor and VP of Business Development of DirectHit and several institutional investors.

“Enterprise search is a critical need in the corporate world. While consumers turn to Google and Yahoo for answers from the web, corporate employees also want to mine the useful resources of their own company,” remarked investor Langley Steinert. “For sales and business development, it is critical for employees to leverage the existing relationships their colleagues already possess. Closing just one or two additional deals solidifies the ROI for an application like Contact Networks.”


About Contact Networks

Contact Networks is a leading provider of next generation enterprise search solutions. The application enables an organization to efficiently access and utilize the relationships that employees have to outside contacts and companies. Sales and client development teams discover introductions to target accounts that help win the deal. For more information about Boston-based Contact Networks, visit www.contactnetworks.com or call 617.305.7961.

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"Networking": The Dirty Word

In the newly launched Fast Company Networking Forum, Laura Rich
asks:

Why do some people hesitate to embrace networking? How did it earn its seedy reputation? And on the flip side, if you’re an active networker who doesn’t appreciate the stereotype of sweaty palms and business cards, how do you avoid making such an impression?

In doing research for our upcoming book, “The Virtual Handshake”, we also found some resistance to the word networking. When we dug further, we found that this sentiment was primarily concentrated in a couple of key groups: 1) people working for large companies in roles other than sales, marketing, and biz dev, and 2) people in the media. With some thought, it’s easy to see why these groups would have a different perception of networking.

For the first group, formalized networking has very little to do with their day-to-day business. They’re not selling anything, they’re not buying anything, they’re probably not looking for work, and probably not hiring anybody. And regardless of the best ideals of helping others, sharing knowledge, etc., it’s still the expectation of those transactional outcomes that ultimately keeps us coming back for more networking. Without that clear benefit, there’s not a compelling return on the time investment for this group.

For the second group, the media folks, the issue, I believe, is that they are in such high demand. If they go to a networking event, everyone who finds out they’re a journalist/reporter/editor immediately wants to tell them all about what they do to try to get them interested or get them a referral to the right contact. And yet these people often have very little to offer of value to the media person. Sure, media people need contacts — lots of them — but they have a steady supply of people sending in press kits, story pitches, etc. They have big Rolodexes. When they can’t find who they need, they ask around their office, they post on ProfNet, etc. So again, it’s not a need they have, and attending a networking event, they tend to get “used”.

And there are some networking events/groups that contribute to the bad name. Formalized referral programs can be great, a la BNI, but they can also deteriorate to the point that people are just giving other people names to call on, not really giving referrals. (As an aside, try never to just give someone a name to call — make the introduction yourself if possible. It’s far better for all three of you.)

A second thing contributing to the decline of the word “networking” is its hijacking by the network marketing industry. Now, I’m not opposed to network marketing — truly, some of my best friends are network marketers — but it is true that the industry has a negative image to many people. It is also true that the networking marketing industry has adopted the use of the term “networking” to refer specifically to the practice of network marketing. In fact, one of the most popular periodicals in the networking marketing industry is entitled “Networking Times”. Given how many people are prejudicial towards network marketing, this contributes to the negative connotation of the word “networking”.

And a third contributing factor, at least among the tech-savvy, is some backlash against social networking sites. A combination of experimentation and some poor choices by both the sites and their users have created a mild backlash among some people. I find this one especially sad because we have collected so many success stories from people using them effectively, and my educated opinion is that if someone finds social networking sites ineffective, it may be more about their own usage habits and practices, or at least about their exepctations, than about the site itself. Nonetheless, it’s another tick against the word “networking”.

Much of this is based upon prejudice, of course, but it is not entirely unfounded, either. But I see it not as an obstacle, but as an opportunity.

When someone reacts negatively to the word networking, explore a little deeper. “What is your definition of networking?” “What in your experience led you to that belief about networking?” Then define networking for them in your experience, and jokingly ask them if the two of you can agree to use your definition when you’re talking about it with each other. Invite them to the very best face-to-face networking event you go to. Invite them to join your one favorite online network. Ask them if you can be their guide to your world of networking.

Maybe you’ll change their mind — maybe you won’t. But you’ll end up creating a stronger relationship with them either way.

If you’ve got thoughts on this, rather than posting comments here, please come join the conversation at Fast Company.

From favor economy to economy economy

In the latest issue of eWeek, Matt Hicks asks the question, Do Favors or Cash Motivate Online Business Networking? At a recent panel discussion at the Business 4Site conference, social networking site founders Jas Dhillon of ZeroDegrees, Reid Hoffman of LinkedIn, Antony Brydon of Visible Path, and Ben Smith of Spoke offered their opinions.

Dhillon: The biggest motivator for joining a social networking site is the expectation of a mutually beneficial relationship among those in one’s network of friends and business contacts. “Social networking is as old as humanity itself. The whole concept is about reciprocity.”

Hoffman: The editorial value of the connection is more important than any expectation of a direct financial reward. “Like professional networking today, you help your friends and they help you. People accept invites from and send invites to people that they want to help.”

Brydon: “No way. The favor economy is where we started, and we quickly moved to the barter economy and then the economy economy. It’s an ideological point that will become a real issue for what to do to move things along faster [in this industry].”

Smith: Mixed. For enterprises, increased sales is a strong motivator, but not so much for individuals in a public network, which Spoke also offers.

On a related note, in an informal survey of 124 active Ryze users taken in February 2004, 71% reported that they use it for knowledge sharing, while only 55% reported using it for general marketing and only 46% for direct sales leads. 58% use it for business development and finding strategic partners, the #2 use behind knowledge sharing. 49% use it for socializing.

At least for Ryze users, who are admittedly early adopters of the technology, it seems that there’s certainly more to it than direct financial benefits.

As for me, I think looking just for short-term, tangible financial benefits is reasonable, but also short-sighted. If you’re going to make a substantial time investment, it makes sense to expect a return on that investment. But those other things that seem intangible at first—strategic partnerships and knowledge exchange—can actually have as high or higher real return in the long run.