There was an internal discussion between our portfolio companies about “free press release sites” and their effectiveness. I thought it will be a good idea to share the learning with readers of this blog . Thanks to Sahil and Himanshu for  initiating and contributing

Question: There are so many free press release sites out there on the web. Are they effective? Or should you use a paid service like prweb? Any experiences?

Answer: We have been doing a few press releases. Our experience has been really good with some selective free ones. Some of them are very effective and automatically pulled by lots of other websites building a number of links for you.

Also, we found that its better to explore some relevant sites/communities/networks/forums/wikis for “quality traffic”. For example, we get some really good users from one of the vertically focused social networking site.

QnA with Morpheus Venture Partners

Morpheus Venture Partners aims to provide mentorship and advice to early stage startups. We recently got a chance to speak with the founders Sameer Guglani and Nandini Hirianniah. Here is the transcript:

How are you different from a typical seed/angel investor?

MVP is a currently only a Business Advisory Firm. We have plans of raising a fund to invest in the companies we involve ourselves with. However, the amount that we will invest is going to be a small component of what MVP has to offer. We will invest 5-10L where as, Seed and Angels look at deals in the range of 50L to 1Cr.
MVP works with companies one step before seed/angel stage, most of our companies will go on to raise their angel/seed round during their engagement with MVP.
We work with companies in very early stage/ idea stage where as angels/seed investors look for some level of maturity in the business in terms of product, customers, revenues, business model etc. We primarily back promising teams with interesting ideas.
MVP also has a strong community that’s getting created as part of MVP is invaluable for young entrepreneurs. Currently we have 11 companies and 35 odd founders/entrepreneurs as part of this community, who share their learning’s, relevant contacts and much more, which forms a support system for each of the MVP companies.

What do you look for in a startup that’s right for mentorship by Morphius?
* A rockstar team, with the right set of skills, a great vision and a lot of passion.
* Are they solving a real problem and will customers pay them for their solution
* Business targeting a large market opportunity which is growing at a rapid pace.
* Scalable business model
* The comfort level between the MVP team and the founders.
* The amount of value MVP can add to the business has to be significant.

Are there any areas of businesses that you specialize in? (example: internet, enterprise, etc.)

MVP is a sector agnostic business advisory firm open to all kind of startups, at the same time we may not the best choice for all startups. Some of the primary selection criteria are:
* The startup has a rockstar team, with the right set of skills, a great vision and a lot of passion.
* Startup is targeting a large market opportunity which is growing at a rapid pace.
* Can the MVP add significant value to the startup to justify the engagement
* Most importantly, there is a lot of comfort level between the MVP team and the founders.
* Currently we have 11 companies in the portfolio some which are B2B, some are B2C and some are both. Around 40% of our companies are creating products for global markets and the rest are only focusing on Indian market.

Current portfolio spans following sectors:
News, Micro finance / finance, Wellness / Preventive Health, Online Content sharing, HR/hiring, Saas / Online collaboration, VOIP, Local search, Food, Web Services
MVP has also built a panel of Subject Matter Experts with varied expertise and experiences, who are available to work with MVP companies either on a one-off basis or for a longer advisory role, with specific timelines/deliverables built in. These are people who are experts from different fields, entrepreneurs, investors, etc. They come with in depth knowledge of their field of expertise and make available 3-4 hrs every month for the MVP companies.

Do you mind sharing the names of a few companies that you are currently working with?

Following are some of the names from our portfolio companies:
Instablogs (www.instablogs.com )
Commonfloor (www.commonfloor.com)
Foodathome (www.foodathome.in )
moblf (www.moblf.com)
Call Graph (www.callgraph.in)
Crederity (www.crederity.com)
Deskaway (www.deskaway.com)
Dhanax (www.dhanax.com)
Fachak (www.fachak.com)
LifeMojo (www.lifemojo.com)
SutraHR (www.sutrahr.com / www.sutrajobs.com)

6% equity for zero money and 6 months of formal guidance, isn’t that steep?

As a response to this question, I’d like to quote Paul Graham’s views about the quantum of the equity. Although we are not investing any money at this point in time like Ycombinator, but the same reasoning applies in our case too. Below is a link to the interview in reference and I have pasted the relevant section of the interview down here:
http://paulgraham.com/frinterview.html

Question asked to PG: I read that when you call Y Combinator winners, the founders have only five minutes to accept. (”If people turn us down,” he says, “as far as we’re concerned they’ve failed an IQ test.”) Have startups turned you down? Are there any that have turned Y Combinator down and still gone on to succeed with a liquidity event?

Relevant part of PG’s response: The “IQ test” quote refers not to how fast they have to decide, but the amount of equity we usually ask for. In the median case it’s 6%. If we take 6%, we have to improve a startup’s outcome by 6.4% for them to end up net ahead. That’s a ridiculously low bar. So the IQ test is whether they grasp that.

How do you measure the progress of startups working with you? What metrics do you use?
Since every startup is different from each other, we track each one of them separately with different set of metrics/KPIS. At the same time we use common frameworks to ensure scalability. MVP has created an agile start-up framework, which includes
* Weekly meetings, Monthly meetings
* Daily 10 minute calls
* Business goals documents (monthly/quarterly)
* KPIs
We work with each startup to create a set of KPIs (Key performance Indicators) which make sense for their business and these are tracked on weekly and monthly meetings both by us and the founders.
Here are some of the important metrics that are tracked across our portfolio:
* Unique visitors
* Time spent on the website
* VAC (Visitor acquisition Cost) – applies to online visitors
* LAC (Lead acquisition Cost) – applies to offline leads
* TAC (trial customer acquisition Cost) – only applies to SAAS type services where one acquired trial customers and later coverts into paid ones
* CAC (customer acquisition cost)
* ARPU (Average Revenue per user)
* Customer lifetime
* Customer lifetime growth rate
* Monthly expenses
* Monthly revenues
* Monthly Cash flow
* Cash in Bank
* How many months of cash is available
* Product Activity (different for different startups)

The progress is measured based on two criteria:
* Comparing planned Business goals and the achievement done
* Tracking the movement of KPIs again against what was planned as part of business goals

Most of our portfolio companies use the online project management solution from Deskaway (also MVP company) to manage their projects and collaboration. Google docs is also used heavily for document sharing and collaboration on the documents. Callgraph (another of MVP companies) is used to record and share daily/weekly and scheduled discussions that happen over skype.

How is the current market affecting startups in India? Do you see it as an opportunity or death of startups due to lack of funding?
It’s an absolute opportunity for startups and situations like this always separate wheat from the chaff. There will be a set of “Not so good” startups that may panic and succumb to an early death. At the same time the good startups with good teams will figure ways to stick it out, last thru the current market scenario and come out STRONGER on the other side.
Below are some of the measures startups should implement:
* Closely re-examine all costs and eliminate costs which are not needed or which are optional. Also squeeze costs in necessary areas as well.
* Think harder before making any significant cash investment/commitment
* Increase priority of revenue generation activities and initiatives
* Get to positive cash flow scenario asap
* Come up with a product / service which can allow the startup to take advantage of the current market conditions. A good product which can allow people to save money, which is what most customers/enterprises will look to do, will have an good potential to succeed.

Since startups will have hard time to get money, do you think your business will get affected due to current market conditions?
We don’t think startups will stop happening, India is seeing a good momentum of quality startups and we expect the same to continue. This is one of the best times to work with early stage startups as the valuations are favorable and the weaker startups are automatically disappearing, leaving behind quality startups.
Also, the VCs are saying they intend to continue doing deals but they will look harder and deeper and hence take more time on each deal. So the startups today need to make more progress than before in order to secure funding and will need to make the same money last longer, reach cash flow positive and figure out ways to do stuff without spending money. This presents MVP with a good market opportunity.

This article is reproduced from Saasburst, a Deskaway blog, with permission from the author, Sahil Parikh.

Bessemer’s Top 10 Laws for Being “SaaS-y” Rule # 8 states “By definition, your sales prospects are online – Savvy online marketing is a core competence (sometimes the only one) of every successful SaaS business. “

(BTW, read the other laws as well – we will have another post on interpreting the other laws soon)

SaaS vendors should utilize low-cost marketing techniques to gain market traction and increase user adoption. While old-school software had marketing budgets of millions of $’s and sold by downloads or via CD’s, selling SaaS requires an understanding of the web, user behavior and implementing some cool techniques and methods. Follow these methods and you will golden.

Search Engine Marketing (SEM)

1. Search Engine Optimization (SEO)
SEO is one of the most in-expensive ways to push prospects to your site. Prospects search for keywords related to your service, your site popups up on the SERPS (search enging results page), they click on your link and ka-ching, you have a lead. It sounds easy (doesn’t everything now adays) but there are 2 things you need to do:
a. make sure your website is optimized (keywords, content, title tags, alt tags, etc.)
b. other highly ranked websites (with a Google PageRank of 4 or more) link to you. The more quality sites that link to you the more “brownie” points you get from search engines.

Further reading - http://www.highrankings.com/tentips

2. Pay Per Click (PPC)
PPC is where you pay a small amount when someone clicks on your ad on a search engine is paid search. I have personally liked the Google Adwords. You bid on keywords (the one you used on your site) and then have your site show up on the right side of the Google SERPs. Make sure you try this service out with a small budget and a few keywords. Though this method can be expensive for certain keywords (especially if you are competing with everyone around the world), you can get some really inexpensive keywords for each individual geographic location. e.g. certain project collaboration keywords are much more inexpensive in India than N. America

Blog Marketing
Find articles that talk about your service (or complementary services) through Google Alerts and Technorati and then contact those bloggers for a review. Comment on these articles – comments need to be contextual, brief and not spammy.

I have tried a few paid blog marketing techniques from reviewme.com,payperpost.com and blogvertise.com but they haven’t lived up to their expectations.

Email Marketing/ Campaigns
Build your newsletter lists (from website visitors, customers, prospects and anyone you come in contact with) and have an email newsletter go out to them every month. Measure and track open rates, bounces, unsubscribes, forwards etc. This is one of the best ways to keep in touch and let people know about whats going on with your company and service (feature launches, customer testimonials, casestudies..).

Further Reading
Seth Godins Permission Marketing
Writing an effective newsletter

Affiliate Programs
Create and promote an attractive affiliate program(s) that provide a win-win to both the vendor (you) and the affiliate with excellent recurring commissions. The brick and mortar industries did this with their distributors networks. Affiliates are one of the best ways to grow your business while you sleep at night. Two of the good affiliate networks that I have checked out and heard of are:

Commission Junction
Share A Sale

I have heard thats its better to create an in-house affiliate network and create a direct relationship with your affiliates. We would love to hear your comments/ views on In-house affiliate Vs. Existing Networks.

Channel Partners/ Marketplaces
Over the last year or so I have noticed marketplaces (think a Mall) open up for SaaS vendors (think a boutique shop). Two of the marketplaces I have checked out are Jamcracker and Etelos. Channels are a good way to build recurring revenue (same as affiliates). Channels bring in customers to their marketplace where the customer can signup for multiple SaaS services. If any of you have experience running a Channel program, please post your comment & thoughts.

Further Reading
ChannelWeb

Social Networks
Get yours fans talking about you on Facebook (create a Fan page) and send out sneak previews, discount coupons etc. through Twitter. You can even track who is talking about you on Twitter – great way to build relationships and solve customer service questions.

PR
It helps build credibility if you can get some good stories written up on you or your service in an offline media publications.

Free Trials
Giving a free trial to your prospects so that they can experience your software and customer service is fundamental to any SaaS initiative. Free trials are low-risk, inexpensive and helps the above sales efforts to become more effective.

We will be going in-depth into most of these points. Remember, everything that happens on the web can be measured, tweaked and re-measured. Now, all you need is an analytic tool (my choice is Google Analytics) to measure and track your success. Good luck!

Varun (founder of lifemojo) , has done a couple of simple, but powerful and actionalble posts on SEO.

• SEO Notes 1
• SEO Notes 2