FUND - HOUSE FLASH

Next year digital ad spending will surpass $85 billion. Listed are the top areas companies are spending their ad dollars on:

- 46% - Brand Awareness
- 31% - Acquiring New Customers
- 29% - Introducing New Products/Services
- 28% - Retaining Current Customers
- 27% - Brand Promotion

FUND-HOUSE VENTURES 
PHOENIX, ARIZONA
ANGEL INVESTORS / MENTORS

SOCIAL LOAFING : Who's Best At Doing LEAST

Social loafing is defined as team members expending less effort when becoming part of a project group vs. working on their own. Social loafing is common and caused by a number of factors:

Who's Best At Doing Least

- Group Size: the more people assigned to a project the easier it is to slack-off and let others
   carry the load.

- Goal Achieveability: believe group's goal is not achieveable and effort futile.

- Goal Value: no meaning attached to effort expended.

- Goal Low-Balling: if goal is easily achieved and only requires a minimum of effort.

-  Skill Set Deficits: don't have the skills required so let others do the work.

-  Sucker Bet: seeing others loaf and does not want to become the work-sucker for the group.

To prevent loafing from occurring, management must do the following:

- Keep the Project/Task Groups small in number of members - there is no place to hide.

- Assign Accountability: give a specific task to each member of the group. This is key to motivation
   and group success.

- Clear Objectives: specific, quantifiable, and easy to measure goals prevent loafing

- Skills Match-up: ensure group members have the skills to achieve the goals.

- Feedback Loop: have each group member present their progress to the rest of the group at       predetermined intervals and incorporate feedback sessions with total group involvement.

Team members aren't always equal in terms of effort expended and social loafing is very detrimental to achieving success and minimizing the time to complete a project.  Be on the look-out for loafers.

Fund-House Hint: if necessary have group members participate in a peer evaluation process.


Stay in touch,
Jim Lavorato, Principal
Fund-House Ventures, LLC

Social Marketing: Chasing The Illusive ROI

Determining Return on Investment (ROI) is a staple in financial analysis but is a challenge every social marketer has to contend with.  In fact, the top challenge for social marketers is measuring ROI. 

Linking social marketing spending to business results has been somewhat illusive, and has become an area of focus for marketers and social platform operators. The more money marketers spend on social media, the more they expect to know how that money converts into revenue

Facebook sees the solving of this ROI dilemma as a huge opportunity to gain marketers' ad spending dollars at the expense of both TV and Google.  To this end, Facebook recently announced a shift in emphasis away from proxy metrics, such as video views and brand lift and towards sales metrics - with the goal of linking ad viewing to sales results. 

The problem is in many ways the doing of the marketers themselves as they are addicted to proxy metrics, such as: likes, comments, shares and retweets. Engagement metrics are still the most used measures to guage  a social campaign's success. When what should be used are conversion and revenue metrics, such as: website traffic, conversions, and revenue.

The hierarchy of social platforms in terms of ad dollars spent are Facebook, followed by Instagram, Twitter, YouTube, LinkedIn, and Pinterest.  Facebook and Instagram (owned by Facebook) are largely 'pay-to-play' platforms whereas the other platforms are more organically oriented - although this is changing as can be witnessed by LinkedIn's new 'Premium' offering.

Tracking the impact of advertising on social media sites is adequate but not inclusive. The illusive ROI remains unsolved but the problem is being addressed and to really spur-on more ad dollars the social platforms know they need to provide these measures.

Jim Lavorato
Fund-House Ventures




 

ANGEL INVESTING: It's All In The TIMING

Fund-House often gets asked when is the best stage of development to invest in: idea, pre-seed, seed, emerging, or performing.

For Fund-House the best time is the pre-seed stage. The idea stage is too risky because there is essentially nothing tangible to invest in and no foundation to build upon.  The idea stage is when the founder(s), family, and friends are putting up their cash - it's the riskiest time and returns are very questionable.  At this stage there is no hook for the rational investor to grab onto and move forward.

The pre-seed stage is where an angel investor wants to be. Angels get the best deals at pre-seed because the supply of capital is low but the demand is high.  Also, smaller angel investors can find better deals pre-seed because there is less competition for those deals; particularly, from venture capitalists and institutional investors who compete for deals at later stages.

To minimize risk, angel investors require a high degree of diversification with many small investments. Diversified investment portfolios are easier to build at the pre-seed stage because founders are happy to receive say $10,000 investment increments on say, a first-time $200,000 round. Those same companies are not going to entertain small dollar increments when they reach the emerging stage and are looking for $10 million.

Another big problem for Fund-House is avoiding non-business oriented entrepreneurs. This avoidance is much easier at the pre-seed stage as the business is somewhat already proven to have validity and you should be able to size-up the founder(s)' acumen.

Fund-House Hint: Entrepreneurs should not wait until the emerging stage to seek funding.

Jim Lavorato

FACEBOOK: Best For Sm. Bus. Marketing?

According to G2 Crowd, a marketing services provider. 80% of small businesses use Facebook for marketing - making it the most popular platform for d-marketing.

G2 Crowd, surveyed over 2,000 small businesses (those with 250 employees or less) and found that 24% planned to make investments in marketing and advertising a priority for 2018.  That puts promotion and marketing expenditures foremost before staff hiring or new equipment investment!

After Facebook came Twitter, as the next most popular marketing platform, followed by LinkedIn and Instagram. Although Facebook is currently free to use for marketing, organic reach on Facebook is only 2% of designated viewers. So, it's really pay-for-play on Facebook if you want to reach your demographic designated prospects.

The cost of on-line advertising is relatively inexpensive especially as compared to traditional media, such as static ads in magazines or newspapers. So, it has become a no-brainer for small businesses to gravitate to social media for marketing their product or service.

Does Facebook Work As A Marketing Tool?

According to G2 Crowd's survey a full 38% of respondents stated that Facebook was their most successful marketing channel. And, like all marketing channels, the key is to have unique stories and compelling headlines. Also you must follow your ad metrics. # of fans, fan reach, post engagement, negative feedback are several metrics everyone needs to follow.

Fund-House Hint: Use videos in all of your social posts if possible. Social media loves videos.


Jim Lavorato