New Industry Trends

Of all the new trends that I see developing, the most significant is probably the new wave of mobile media.  The most effective way to communicate is through video and the technology continues to reflect the new consumer mind state of on demand programming.  When TV recording capabilities were first introduced, it changed the landscape of media and entertainment.  

Not long after that revolutionary breakthrough, we are beginning to see the first signs of an on-demand world on mobile devices.  With the mobile device screen sizes getting larger and the Networks getting faster, the sky is the limit.  There are already programs that all ow you to watch a live television program on a mobile device.  As the cellular infrastructure continues to improve, we will see better resolution and faster connection speeds.

While in the Entertainment Business Masters program at Full-Sail, I have learned a great deal about the many ways that the Entertainment industry can be impacted by breakthroughs in technology.  

I plan on using my new expertise, to exploit the mobile advertising wave that is on the horizon.  The small screen size was a major issue for mobile advertiser in the past but the new wave of tablets have eliminated many of the restrictions that prevented mobile advertising from being a viable option for many companies.  Having gained the knowledge of digital advertising and marketing principles can now advise companies and develop strategies for successful mobile marketing campaigns. 

Funding Sources

This week I looked at the web sites of a couple companies that serve as sources of funding for small businesses.

The first of which is a company called the Opportunity Finance Network.  The aim of the company is to offer affordable and responsible financial products to low-income, low-wealth and disadvantaged people and businesses.  The products that they offer help capital flow to opportunity markets outside of the economic mainstream.

The OFN requires qualified companies to fill out a detailed application along with  a host of supporting documents ranging from a mission statement to balance sheets to resumes of management.  

The site also serves a knowledge resource offering its members a wealth of information on the industry.

The other site that I looked into was The Association for Enterprise Opportunity.  The AEO markets itself as a company for micro-enterprise in America.  They help underserved, small business entrepreneurs contribute to their communities through business ownership.

The criteria for this program is not quite as narrow at the OFN.  However, their aim of helping entrepreneurs and improving low income communities is similar in nature.  They also help entrepreneurs find development organizations to assist in their business endeavors. 

Business Plan Essentials

In week one I researched the most important elements of the business plan based on the opinions of the top venture capital experts. I have taken the advice of these experts and have made several key changes to my business plan.

The first change that I made was to change my business plan to target a wider audience. Instead of simply targeting music consumers, I plan to take a broader approach. The line of products that my company offers now represents a lifestyle for the consumer. We plan to offer a full line of merchandise to complement the music and complete the lifestyle. The offering of these additional items will make it easier for the fans to embrace and identify with the brand as a whole.

Brad Feld’s advice on the executive summary really caught my attention. According to Brad, he ‘doesn’t read business plans, the executive summary is enough…’ This tells me that a potential investor will not even read past the executive summary if it doesn’t do a good enough job of piquing the interest of the reader. Also, the executive summary is the place where you describe the team of individuals involved with the business venture. If the people involved don’t have the right background and qualifications, the venture will more than likely fail. I have not only paid close attention to this section of my business plan, I have also taken extra measures to ensure that I have the right pieces in my corporate structure.

Overall, I wanted to be sure that the business model, the team involved and the financial analysis all address the consumer problem and offer a profitable solution to the problem. I will continue to seek the advice of these and other expert investors while I continue to revise and improve my business plan.

Successful Venture Capitalists and their Views on Business Plan Essentials

Don Valentine

Don Valentine is a venture capitalist with a heavy influence in the technology industry in the United States. Don has a B.A. from Fordham University and is credited with the foundry of National and Fairchild semiconductor companies. In 1972 he founded Sequoia Capital, a venture capital investment firm in California’s Silicon Valley. He was one of the original investors in companies like Apple, Atari, Logic, Oracle, Cisco, Electronic Arts, Google, YouTube and many others. The firm is widely regarded as one of the top firms in the Silicon valley and according to an article posted on washingtonpost.com, 19% of the NASDAQ’s value is made up of firms Sequoia Capital has funded.

Don Valentine and Sequoia Capital seek business plans that target large markets and rich customers. According to sequoiacap.com a good business plan should give as much information with as few words as possible. The plan should explicitly describe a consumer problem and offer an effective and profitable solution. The plan should also give details on the business model, the team involved and a solid financial analysis.

Brad Feld

Brad Feld is the co-founder of Foundry Group. Brad has Bachelor of Science and Master of Science degrees in Management Science from the Massachusetts Institute of Technology. He has been an early-stage investor and entrepreneur for over 20 years. He is also active with several non-profit companies and is the current chairman of the National Center for Women & Information Technology.

In a blog entry on his web sire feld.com, Brad underscores the importance of the executive summary by saying, “While I don’t read business plans anymore (executive summaries are enough for me), I believe the business plan is a critical document for an entrepreneur to organize his thoughts around his new business.” In an interesting entry that details one of his earliest business plans he reveals that while the plan was a bit simplistic and naïve, it framed the business very effectively.

The Future of Online Advertising Spending

As the Internet revolution continues to take the world by storm, the advertising industry continues to change as a result.  Market analysts predict that spending on online advertising in the US will reach $50 billion by the year 2015. 

Display:

Online ad spending grew 20 percent last year thanks to a sharp increase in display advertising.  According to a recent article on paidcontent.org, display advertising is the fastest growing segment of the Internet ad market showing 16.4 percent growth last year.  Paid search advertising is also growing rapidly at an average of 14.4 percent per year.

Video:

Videos in general are having a profound impact on the shape of the Internet. According to another recent article found on mashable.com, spending on video ads reached $1.42 billion last year.  David Hallerman (eMarketer’s principal analyst) attributes this growth to the fact that, “video generates greater audience attention than any of the other digital ad formats.”  As the world’s networks continue to expand and connection speeds improve, we will continue to see and increase in video advertising.

Mobile:

Another segment of the Internet market that is rapidly growing and driving the growth of online marketing is the mobile market.  The proliferation of smart phones and tablets is changing the world, as we know it.  JP Morgan analyst Doug Anmuth said in a paidcontent.org article that mobile will be the single biggest factor accelerating web growth in the coming years.  The mobile ad market is expected to double this year and is on pace to top $1.2 billion.

In the past, the small amount real estate on phone screens and mobile connection speeds presented obstacles and limited the capabilities of advertisers.  However, in the future, we can look forward to faster mobile data delivery from next-generation networks that will increase connection speeds ten times over by the year 2015.  The online advertising industry will also benefit from the growing popularity of smart phone and tablet devices.  The increase in screen size and functionality of these new devices ultimately means infinitely more possibilities for advertisers.

The Digital Landscape for Advertisers

While television still dominates as the most effective mass-market format, the digital landscape for advertisers is growing very rapidly.   According to Kantar Media intelligence, the digital media’s share of the world ad market has more than doubled since 2006.  In 2006, digital media represented just 8 percent of the market. In seemingly no time, digital media advertising now represents over 17% of the total world advertising market.

One of the main problems with the Internet and the mindset of on-demand programming is that the viewer/potential consumer is trained to skip over annoying ads.  This is why a lot of banner and pop-up style advertisements have become nearly obsolete.  The target audience must be engaged in a manner that is conducive to the message being welcomed by the consumers.  The Internet’s explosive growth has led to a demand for creative advertising on the Web.  Advertisements must fully exploit the strengths of the Internet medium and extend the audience engagement in ways that TV can’t.

The new target audience is beginning to go to the Internet for on demand programming.  As companies like Netflix and YouTube continue to grow, they continue to captivate massive audiences while advertisements are creatively woven through the content featured on these sites.   Whether it’s a music video or an interactive game, corporations of all shapes and sizes are competing to make meaningful impressions on new consumers.  After all, advertising is any time a sponsor pays to deliver a message through a medium.  The possibilities for branding and activation are endless.        

The following is a link to an interesting article that addresses the future of digital media:

http://whyy.org/cms/radiotimes/2011/03/07/mergers-in-the-news-media-landscape/

 

Legal issues behind the NBA lockout

The current CBA (Collective Bargaining Agreement) between the owners and the players
of the NBA is set to expire on June 30, 2011. Just like football, if a resolution is not reached during this off season the next season will be at risk of being shortened or canceled. We have all seen how the NFL lockout has played out when the negotiations broke down and the litigation begun. It has been a very messy situation and the parties involved with the NBA will avoid following in those footsteps if they know what’s good for them.


There are several issues that have led to the current dispute between the NBA players and the owners. The most significant issue has been that many NBA owners claim they are in the red and that the league as a whole is losing money. Owners want to increase their portion of basketball related income. The players currently get 57% and the owners get 43%. The implementation of a hard salary cap as opposed to the current soft salary cap is also a big issue. The owners are also looking to cut player salaries by about one third and shorten the length of contracts while eliminating exceptions like signing bonuses or deferred compensation. NBA Commissioner, David Stern, has recently proposed a “flex cap” which would allow richer teams to exceed the target of $62 million per team but this proposal has been opposed by the players and legal analysts have been skeptical that anything other that a hard salary cap would be effective.


Hopefully the two sides can agree soon because 2 major professional sports lockouts in one year could have a devastating impact on an already struggling economy.

Image Sources:
 http://www.thesportsbank.net/nba/nba-lockout-in-2011-heres-your-league-labor-issue-synopsis/
http://theoptionquarterback.wordpress.com/2011/06/15/nba-a-lockout-is-needed/