On Friday, Guy Kawasaki’s Garage Technology Ventures held their “Revenue Bootcamp” conference with an all star lineup of speakers and panelists, including Y Combinator’s Paul Graham, Sequoia’s Mike Moritz, Chris Anderson, author of Free: The Future of Radical Price, alongside a host of executives from Facebook, Yahoo, Google, Pandora and other leading Web 2.0 companies.   Unable to attend in person, I followed the stream throughout the day on Twitter at #revenuebootcamp.  Some the best bits are collected below:

How to Create a Traffic Jam by Really Trying
(i.e. Driving traffic through SEO and website analytics)

@designmom: Adjusting the color blue on Gmail page increased conversions by 20%. Would love access to that kind analysis. #revenuebootcamp

@huihuilow: Charlene Li b2b marketing tip- give the ppl tools to make their case internally – white papers plus ppt help! #revenuebootcamp

@zegig: See how search engines see your site at http://seo-browser.com/ – #revenuebootcamp

@designmom: #revenuebootcamp- Simply Hired CEO says SEO is a mindset. Ex: during interviews say SimplyHired dot com, not SimplyHired, to get more links.

@kirtsy: Figure out the top 10 blog influencers in your vertical. Read their blogs, comment, reachout. #revenuebootcamp

@divyashah: #revenuebootcamp SEO vs SEM, want to get word out quickly -> pay per click/ but $$$$, SEO -> slower, better in long run.

@zeevex: Google Webmaster Search ProdMgr: Traffic is great. Conversion is what matters. #revenuebootcamp

@mccammon: Driving traffic still need a good product at the end of the day, but good product without traffic is pointless – Dion Lim #revenuebootcamp

@zeevex: Driving traffic: Simply Hired COO… Search/SEO won’t get you to 10M UVs a month. Need dist’d strategy (widgets, socmed) #revenuebootcamp

@aihui: How to create a Traffic Jam? Figure out a way to help people make money on ya site (via simplyhired) #revenuebootcamp

Keynote w/ Chris Anderson (on Freemium Bus. Models)

@aihui: People will pay to save time, lower risk, things they love, status, if u make them (once they r hooked) #revenuebootcamp

@noelleee #revenuebootcamp Another great insight by Chris Anderson: Quality is relevance. (I like that).

@zeevex: Chris Anderson. 30 days free = bad. Too easy to walk away. Give away enough free to gain utility, then upsell features. #revenuebootcamp

@designmom: Most popular content on your site should be free. Content behind a paywall should appeal to niches. #revenuebootcamp.

@mccammon: Freemium, 21st century business model, give away 99% to sell 1%, inverse of free sample model, give away 1% to sell 99% – #revenuebootcamp

@zeevex Chris Anderson on Newspapers: Model shouldn’t be free vs paid. Should be ad-driven free vs freemium. #revenuebootcamp

@noelleee: #revenuebootcamp Anderson: Find a product that’s different enough and then make it free. Differentiate. Don’t use price to win market share.

@karmali: In competitive markets, price tends towards marginal cost, which is zero in digital goods (Chris A #revenuebootcamp)

Is the Advertising Model Dead?

@HenryWong94301: Focus, verticalize, drill really deep & specialize. Your summarized model to Sucess ! #Revenuebootcamp

@kirtsy: Facebook guy says to use Quantcast to get a pretty granular view of who your site users are. (Also, Facebook guy is hot.) #revenuebootcamp

@huihuilow: How to get smarter to monetize by ad? – follow the money where advertisers are spending now, then design your business. #revenuebootcamp

@huihuilow: How to target influencers that can be converted to brand evangelists would be crucial. #revenuebootcamp

@huihuilow: So, blurring the boundaries of content and ad but focusing on the sphere of interaction and engagement is the way to go? #revenuebootcamp

@jjuan01: #revenuebootcamp about 65% of users on Google searches don’t know that the sponsored links on top and right panels are actual paid ads.

@barbarakrause: Ad panel at #revenuebootcamp : You don’t make money by diversifying, you make money by specializing.

@kirtsy: #revenuebootcamp – Facebook committed to non-interruptive ads. They want ads to be indistinguishable from content.

@feedbackjar: #revenuebootcamp The Art of Advertising is NOT looking like an Ad

@bigchiefalice: RT @fffabulous: Advertisers love ‘microsites’ like Blahnik – know the content and the audience and be relevant. #revenuebootcamp

@designmom: #revenuebootcamp – the sites that successfully make money from advertising, were purposefully designed to do so from early on.

@aihui: Focus on being the largest FISH in a small pond – strategy of Glam for the first 2 yrs! #revenuebootcamp

@bigchiefalice: #revenuebootcamp — listening to “is advertising dead?” again facebook guy gets it — be relevant to the social context with your ads

Beyond CPM – Innovate Business Models for Generating Revenues

@AstiaSF #revenuebootcamp. Twitter is the new Adwords. Companies are seeing highest conversion rates from Twitter advertising

@feedbackjar What?! IMVU sold virtual wrapping paper for $2 #revenuebootcamp

@kirtsy 10 cent, $1 and $2 virtual wrapping paper sells. $10 virtual wrapping paper does not. Experiment. #revenuebootcamp

@designmom #revenuebootcamp – 2 panelists have tried running google ads for fake products to see if anyone clicks. Google ads as research.

@zeevex Test your startup idea with a small buy with AdSense. Just see if your idea gets clicks. (email apology is optional #revenuebootcamp

@feedbackjar #revenuebootcamp experimentation is key to understand what your users want

@lawrencecoburn Some of #IMVU ‘s third party virtual clothes developers are making more than $1M per year. IMVU share’s revenue 50/50. #revenuebootcamp

@karmali interesting that some panelists personally began with CPM, and then moved away from it. #revenuebootcamp #revenuebootcamp

@divyashah #revenuebootcamp Panel’s advice for entrepreneurs: force yourself into having revenue targets early on + rapid development cycles

@zeevex: False internal constraints (sales goals) are crucial for startups. Give the metric a name, so it becomes more important. #revenuebootcamp

Fireside Chat

@adstads #revenuebootcamp @GuyKawasaki on valuations: Add 500k for each engineer; deduct 250k for each MBA. Ouch.

@bigchiefalice #revenuebootcamp no one knows what the “the next big thing is” — no idea.

@bigchiefalice #revenuebootcamp sequoia doesn’t like owning too much – means owners aren’t shrewd and there’s not enough for everyone else – 35% is the max

@zeevex Guy K: Why do you invest in so many 25-yr olds? Paul Graham: Because Mozart was dead at 35. (huge laughter) #revenuebootcamp

@zeevex Mike Moritz: Talk to investors like your doctor. Don’t hide the symptoms. Talk like you do among yourselves. #revenuebootcamp

@zegig Paul Graham says don’t say the word “passion” just show it #revenuebootcamp

@designmom RT @huihuilow: Paul Graham: “We like people who really like to build something….” #revenuebootcamp

@zeevex Paul Graham: Rev is imp, but we don’t worry about forecasts or s.sheets. We worry how the co. will make it past 1st year. #revenuebootcamp

@zegig Paul Graham asks pitching entrepreneurs what they have done outside of school/work #revenuebootcamp

@huihuilow Paul Graham: “We like people who really like to build something….” #revenuebootcamp

Dial 1298 Image

Harvard Business Review reports on a clever sustainable business strategy by Dial 1298 providing ambulance services to previously unserved areas in Mumbai, India.   The venture is structured using a clever hybrid approach wherby a non-profit foundation owns the ambulances and other assets which it rents exclusively to the for-profit Dial 1298 on a per use basis. 

This structure allows Dial 1298 to operate profitably with very low overhead, while the non-profit structure of the foundation allows it receive donated ambulances and other significant philanthropic support. 

Although the IRS may take a close look at such structures if formed in the U.S., I think this sort of thing can and will work here as well.   IMO, this sort of hybrid structure offers a lot more flexibility and lot less compromises than the Low Profit Limited Liability Company (L3C).

Last time I checked Twitter’s ad budget was somewhere around $0.

For one thing they have a mind boggling head start on quality of life. **US borrowers do not have to pay to send their kids to elementary school. **They don’t have to build their own house. **They don’t have to walk miles to get the bare minimum of medical care….if needed they can access FREE, generally high quality medical care. **They have a system of laws and courts in place that work. **They enjoy police and fire protection. **They generally have access to inexpensive and dependable public transportation. **They take for granted electricity, clean water, inspected food and indoor toilets. **They have an ASTONISHING, and humbling diversity of social programs, religious outreach and charitable services available to them. **They have an array of ways and means to raise start up capital. We DO support the needs of the truly impoverished entrepreneurs in developing countries. We want Kiva to stop loaning in the US.

Ouch. I have commented elsewhere about the difficulty of Kiva’s expansion into the U.S. My critique was basically that Kiva does not solve the same problem in the U.S. that is addresses in developing countries. In developing countries, Kiva provides loans to people who would otherwise not be able access financing from anywhere. But in the United States, financing for loans of a few thousand dollars or less is generally available to most U.S. entrepreneurs in the form of credit cards. So Kiva’s entry into the U.S. does not address a capital deficient market as much as it simply makes capital available at a below market (zero) interest rate.

However, I cannot share the sentiment expressed by the Pissed Off crew.  While I can accept that, for the reasons stated, they might choose themselves not to contribute to U.S. based entrepreneurs, I simply cannot see how they can justify attempting to force Kiva to stop presenting it as an option to everyone else. Kiva has always provided a large variety of countries and entrepreneurs for lenders to choose from.  A case can almost always be made that one country or one entrepreneur is more or less deserving than another.  But the beauty of Kiva is that is embraces a form of direct democracy – each lender can decide for themselves who they feel is most deserving and how much they want to help.  While the Pissed Off crew are certainly entitled to their opinion, I can’t see how they ought to be entitled to deny everyone else theirs.

“You’re Not So Smart, You Just Show Up a Lot” -  Steve Blank on essential entrepreneurial qualities: agile opportunism and thriving in uncertainty.

Caught the entrepreneurial bug, but not sure what do next?  D. Philip Haine discusses “Choosing the Right Problem to Solve”

TechCrunch’s Sarah Lacy wonders “Is Execution More Important than Vision?“

Finally, Rieva Lesonsky posits “Are You Running Your Business, or Running on Empty?“

L3Cs, and to a lesser extent, B corporations were created to address the problems of “not-only-for-profit” social enterprises that are forced to exist in the nether region between traditional non-proft and for-profit forms.    The L3C, or Low Profit Limited Liability Corporation attempts to fill this legal void by creating a new form of entity for companies that are formed for socially beneficial purposes, but plan to return a small measure of profit to its owners.   So far, the L3C has been recognized in a few states like Vermont and Michigan.   In addition to the L3C, an organization named “B Lab” has created the quasi-legal “B corp” certification for social enterprises.  Although the B corp is not an actual legal entity, it is designed to recognize enterprises that have met certain criteria for social benefit.

Unfortunately these new structures do not really address either of the two main problems.  First, neither B Corps or L3Cs solve core the legal issue.   Although L3Cs ostensibly recognize mixed charitable/profitable goals, L3Cs do not provide any of the benefits traditionally associated with the non-profit form, such tax-exempt status or the ability to receive tax-deductible contributions.   Thus there is little, if any, legal advantage to choosing an L3C over the standard (and more flexible) LLC or corporate forms.  L3C proponents hope that the IRS will eventually allow investments in L3Cs to qualify as Program Related Investments (PRIs) (which would pave the way for L3Cs to receive funding from foundations) but that does not look to be on the horizon any time soon.  B corps, of course, are not legal entities at all and thus cannot do anything to change the existing legal duopoly.   Absent such legal recognition, B corps offer offer little more than of layer of “social branding” atop the existing profit/non-profit structure.

Unfortunately, neither the B corp nor the L3C does much to improve how the public views the legitimacy of a particular for-profit social enterprise.  The problem here is a general failure to appreciate the notion of “blended value” that manifests itself as a distrust of the objectives of any enterprise organized in a standard “for-profit” legal form.   For most, the idea of a socially-beneficial for-profit is a oxymoron akin to “military intelligence.”   The story of Kiva’s decision to incorporate as a non-profit instead of a for-profit (“The Profit in Non-Profit”) is instructive, as it highlights how much of the support that Kiva received from donors, board members, and companies like Microsoft, Intel, Starbucks, Facebook , LinkedIn that donated goods and services to the organization on the basis of its non-profit legal status that it would never have received were it organized as a for-profit.

The B corp in particular seems to be aimed at addressing these sort of “trust” issues.  From what I can tell, B lab is hoping that people will come to recognize B-corp certification as providing a sufficient stamp of “goodness” that a certified B corp would be trusted to the same degree as one might trust a non-profit.   In other words, the B corp brand would allow donors, grantors, board members and the general public to separate companies aimed a creating genuine social value from those who simply seek raw profit.  However, this is really a second-order problem — the opportunity to distinguish between “good” vs. “bad” for-profits does not arise until after the public has first accepted that idea that a socially focused for-profit is not an inherent contradiction in terms.  Once that leap has been made it is not clear that the B corp stamp helps donors  distinguish good vs. evil corporation more than they could on their own.

Although I question the value of the organizing as an L3C or getting certified as a B corp, the fact that these options are out there only helps increase the attention of lawmakers and the general public to the  emerging community of double/triple/quadruple bottom line enterprises, which can only be a good thing.  B Lab hopes one day that ”B Corporations will be legally recognized by the states, tax preferred by the IRS, and valued by investors and consumers.”   Each of these goals are a long way off for the reasons I have described here, but it is good to know that they are at least they are focused on the right problems.