Last week three Chicago-based super-entrepreneurs came together for a Social Media Week panel at the Riverfront Theater. The founders of Sittercity, GrubHub and Belly lead a conversation focused on the benefits of social media while providing insider tips for startups looking for funding.
Highlights include elevating brand experiences through social media, tips for securing funding that’s the best fit for your company and why you can never place enough value on entrepreneurial talent.
First, we explore how these founders are using social media to benefit their companies:
Stand out from the crowd
The opportunity to stand out on social media is now, says Matt Maloney, the co-founder and CEO of GrubHub. As more people are figuring out how to master social networking, the landscape is becoming increasingly competitive. We are still at the point where monitoring all potential channels and providing a resolution for customers can be a huge advantage from a service perspective.
Make a great first impression
Belly started with a social media model tangential to its business but is currently undergoing a redesign to build social directly into the product and make it a core part of the Belly experience. Why? Social “can differentiate you from competitors. Often the first things people do is look you up on Facebook,” said Logan LaHive, founder and CEO of Belly.
Elevate brand experience
Both Belly and GrubHub are using social media as an opportunity for a public and direct channel of communication that elevates the brand’s previously established customer experience to a new level. “It’s not a conversion strategy, it’s a retention strategy,” Maloney said.
The conversation then changed to the tips they have picked up during previous rounds of funding:
Start local
For their first two rounds of funding, GrubHub made the decision to stay local. Maloney recommends this route if you want face time with your board members or need help solving business problems in the initial growth stages. As GrubHub grew they were looking for a different perspective. Maloney purposely expanded his search for funding outside of Chicago to get a fresh perspective and avoid a geographic bias. He was also looking to avoid the psychological concept of Groupthink, where the desire for a harmonious group decision overrides the critical appraisal of creative alternate routes.
Value your entrepreneurial talents
“Early stage entrepreneurs often over-value money. Frankly, the entrepreneurs are the ones with the talent. The blood, sweat and tears is really what is valuable. Don’t undervalue what you are bringing to the table,” LaHive said.
“There are a lot of people with money but not a lot of people with successful startups.”
Plan ahead and sell your team
“Having a well thought-out financial model will help a potential investor to believe in your company and the team behind it,” Maloney said. LaHive agrees that the team is the most important factor, outweighing traction, idea and industry. “The idea can be phenomenal but if they don’t believe in you and your team, it doesn’t matter,” LaHive said.
Don’t be afraid of VC funding
Genevieve Thiers, founder of Sittercity, is on a mission to demystify the idea that you can be a small giant in the web space. In a competitive marketplace like the Internet, there is often one defined industry leader and a large group of companies who are seen as followers. She says startups should not be afraid of VC funding because there is a strong chance there will be a single leader. “You must take the money and run if you want to be the leader,” Thiers said.
Do the appropriate research
“A boardroom should not be a contentious place – it should be a partnership,” Maloney said. Theirs recommends looking at The Funded, a resource for entrepreneurs, to see how the firms you are thinking about working with rate. She also advocates strongly vetting your potential partners. “Always ask if they are currently looking at, talking to or incubating a competitor,” Thiers said.
Choose the people, not the higher valuation
“My goal was to find the right partner and the best person possible. It didn’t matter where they were from,” LaHive said. Thiers says the trade off for less money but better people is worth it. She has given up higher valuations in the past so she could work with better people and would do it again.