Dieses Interview habe der Beilage Digitale Medien der WuV gegeben, erschienen diese Woche:

■■soziale netzwerke haben eine eigendynamik entwickelt, die kaum jemand voraus gesehen hat. Wie begründen sie diesen erfolg?
Social Media bildet im Grunde nur digital ab, was Menschen schon immer getan haben: sich austauschen, befreunden und mitteilen. Sie erleichtern die Suche nach Gleichgesinnten, ehemaligen Kontakten und Beziehungen. Wenn man so will ist ein Soziales Netzwerk eine Art Suchmaschine für menschliche Beziehungen. Dabei steht allerdings das „in Kontakt bleiben“ im Vordergrund.

■■Was kann ein soziales netzwerk leisten, was macht es aus?
Zum Reiz sozialer Medien gehört, dass diese für jeden Einzelnen etwas anderes sein können: Freunde halten, die engsten Liebsten über das eigene Leben unterrichten, Interessen bekunden, sich inhaltlich austauschen, Ereignisse nachklingen lassen, die eigene Karriere fördern. Soziale Medien macht auch die Einfachheit aus – die am simpelsten zu bedienenden Plattformen sind auch die Erfolgreichsten.

■■Wer nutzt es und welcher Mehrwert steht im focus?
Die meisten sozialen Netzwerke haben einen soziodemographischen Fokus, wie ursprünglich schuelerVZ oder MySpace. Einige Plattformen umspannen sehr unterschiedliche Zielgruppen, wie Facebook, wer-kennt-wen.de oder meinVZ. Mit inhaltlich orientierten Diensten wie youtube und sevenload steht zunehmend auch die situationsbedingte Interaktion im Vordergrund: heute Verbotene Liebe mit einer Interessentengruppe diskutieren, morgen Star Trek.

■■das thema datensicherheit ist im Zusammenhang mit sozialen netzwerken sehr wichtig. Worauf sollten nutzer achten?
Wie im realen Leben muss jeder Nutzer darauf achten, wem er was über sich selbst preisgibt. Was einmal im Netz ist, ist dort für immer. Jeder muss sich bewusst machen, dass das posten in Sozialen Netzwerken eine Veröffentlichung ist, die auch viel über den Nutzer preisgeben kann. Das macht den Reiz,bei unvorsichtigem Handeln aber auch ein we- nig die Gefahr aus. Letztere lässt sich durch besonnenes Handeln vermeiden.

■■Was haben die user zu erwarten, wie werden sich die sozialen netzwerke weiterentwickeln?
Soziale Interaktion wird immer mehr zu einer normalen Dimension eines jeden Angebots in den digitalen Netzen. Die Verbreitung des “Like”-Buttons von Facebook ist ein erster Schritt in diese Richtung. Auch Inhalte wie sozial verknüpfte Fotos und Videos werden sich zunehmend in verschiedenen Diensten und Portalen ausbreiten.Die Website,wie wir sie heute kennen – quasi als „digitale Zeitung”, die durch Klicks geblättert wird – wird es bald nicht mehr geben.

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This is the Keynote I delivered at CeBIT 2009. In it I describe our business model against a backdrop of how media consumption is changing, which affects the content industry and the advertising business. The motto of this year’s CeBIT was “webciety”, which is why I use the term a few times.

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At next09 I had the pleasure of being the moderator of a meeting of the titans in social networking, with LinkedIn, XING, and StudiVZ. Conspicuously absent on the panel but present in the discussion were Facebook and Twitter.

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At the next09, Jeremy Allaire and I announced the partnership of Brightcove and sevenload, allowing Content Owners to distribute content with the Brightcove Player on sevenload to reach new target groups. We also discussed the Social Media Revolution and its implication for Media, Content, and Advertising. Our Moderator was one of the lead dogs of the Next Web Conference in Amsterdam.

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In addition to my keynote, I was interviewed by the host of the channel. What exactly are the Web 3.0 changes that lead to a “webciety”? Big questions, small answers: I tried to pinpoint how individuals get a chance to monetize their expertise or at least make it available to a larger crowd/audience.

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Peter Turi hat ein Video - Interview geposted, dass er mit mir auf dem DLD 09 geführt haben. Darin stellt er solche spannenden Fragen wie:

1) Ist Rezession eine schlechte Zeit für Startups?

2) Wird sich bei den Startups die Spreu vom Weizen trennen?

3) Wird YouTube sevenload verdrängen?

4) Was ist das “nächste große Ding?”

Hier sind meine Antworten:

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Reflecting on the current discussions, last at the Delphi Executive conference in Bonn, and at CeBIT which I both attended as a speaker, I recalled the very lively panel at DLD 09 around online video and social media. If you are interested in the topic, the video gives you insights with Brightcove, Endemol, sevenload and Termor Media and a great moderator, David Kirkpatrick from Fortune Magazine.

Feel free to comment! I also embed the video here:

About the specifics of how we perceive the value of recurring WebTV Content, please check my Interview at ETRE in Stockholm:

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The “Gretchenfrage” most discussed in the advertising industry right now is whether we will have a full-fledged downturn in advertising spending across all media, or whether there are niches and segments of the advertising /media industry that could even benefit from the recession. This being the 2^nd downturn that I have experienced in my career, I am firmly convinced that the latter will happen.

I make this assumption based on several factors:

1. A new generation of marketing decision makers now has control over most large budgets. This generation understands the power of digital communication- even though in the past years it has underestimated the potential impact of Web 2.0 and has continued allocating a disproportionate amount of money to traditional media without measuring that performance.
2. Cutbacks in marketing and sales budgets are rather absurd when the real problem is crumbling sales, but this happens in every recession and it will happen this time around again. Since at the same time marketing performance will be measured more and more in terms of contribution to sales, marketing decision makers will focus on campaign tools and media that either directly or indirectly increase sales performance. Gone are the expensive TV commercials with bikini clad, young beauties on a tropical island, and in comes unsexy sales-driven below the line marketing. The past 2 ½ years have proven, however, that marketing in a Web 2.0 world need not be dreary at all even while contributing directly to sales lead generation.
3. Web 2.0 advertising formats and communication models have reached a level of maturity and a critical mass among users that allow them to have a measurable impact on brand communication and sales lead generation.

The coming year will see providers of Web 2.0 campaign solutions and media ad placements achieving disproportionate success considering the downturn and cutbacks of media budgets. This will happen for precisely the reason that in the past 1 ½ years many showcases of Social Marketing have been started that have proven or will prove to have been successful to an unexpected degree. After the Beacon disaster these showcases will turn the tide, much in the way keyword advertising established itself in 2002 – 2004.

Our best reference is http://bmw-web.tv, which generated considerable brand awareness for our client BMW. BMW itself doubled that success by creating, at the same time, a national web TV project that was equally successful called BMW TV which greatly enhanced traction to its own site. For confidentiality reasons I cannot give you figures, but trust me the impact was measurable.

Advertisers of the old school often argue that performance marketing or traditional lead generation marketing does not help the brand gain emotional traction and awareness. That dichotomy is of the past. Social relevance, rich media and video formats allow the digital sphere to create a branding experience that is as emotionally compelling as television and as measurably successful as search engine marketing. That has always been the holy grail of advertising, and we seem to have found it.

If you want more information or need help achieving that success, contact me.

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This weekend a friend of mine called me up, as he was completing - as a leading seed investor - the first round (series A) of a company that I have a minority stake in. He told me that the round being negotiated was just short of Signing, as all main deal elements had been agreed with the investor (a large and well-known VC Fund), but there was one last point of contention left, and - big surprise! - that was Reps and Warranties.

That made me think once again about the peculiar habit of venture capitalists to turn Reps and Warranties almost as much a difficult topic as in M&A. If you think about the term “Venture Capital”, the whole concept is that you venture into something and there is no precisely NO guarantee of success.

Of course it makes full sense to commit founders to proper representation of the state the company is in and to also make them liable for the so-called Title Guarantees, in effect making sure that the shares being transferred to the investor are free of third party rights, are indeed constituted legally and are not subject to any limitations. However, I do not understand why these Reps and Warranties so often go to the core of the risks of the business model, thereby in effect giving the venture capital investment more the character of debt financing, disguised in the Reps and Warranties clause.

Why do I say this?

Because if a founder signs up for - say - a 3 Mil. Euro investment and the company fails due to an event that is at the core of the typical risk of the business model, this may create a warranty case that in the worst of all contract agreements may include full damage to be paid by the founder. This then means that the investor may get up to the total sum of that investment in damages from the founder because of an event that constituted the essence of the typical venture risk.

So put very bluntly, by enforcing Reps & Warranties covering business risks, the investor covered his venture risk by making the founder liable for failure of exactly that risk.

We all know that founders who may be otherwise admirable do not like to focus on legal details and may have bad luck in a choice of their attorneys.

That can be a deadly mistake.

When founders find themselves in such a contract situation, it is not just a reflection of poor negotiation skills on the side of the founders, who - one might argue a bit unfairly - therefore would not deserve anything better.

Such contract clauses are also always a case of misguided priorities on the side of the investor.

While as an investor I have full sympathy for contractual rules that prevent an irresponsible founder from walking away, as in the old adage “with my time and your money to waste, we have nothing to lose”.

However, it is equally unfair to put the investor of a venture in a position where his investment becomes more a case of debt with higher returns and higher default risk than of real venture investment. Moreover, discussions and probable litigation about business risk damage retribution by the founder can divert vital energy from surviving the damaging event, since both the founder and the investor will bes spending considerable time hedging their risks or enforcing their rights. THat can ultimately be much more damaging than the damaging event itself.

Here is my advice to founders in any negotiation about Reps and Warranties:

1) Before negotiation of deal terms, identify the natural risk of your business model

2) Prepare to describe and argue to the investor what the typical risk of the venture is and make it clear from the outset that that risk cannot will not be carried by the founder(s).

3) Make the investor acknowledge these risks early in the process of negotiating the terms

4) At term sheet level make sure that the basic principles guiding an equal distribution of reps and warranties rights between founder and investor include the following

a. Liability of founders is limited to willful behavior and gross negligence

b. There must be a cap of a certain percentage of the investment, in my opinion not more than 50% of the investment sum.

c. For all cases of non-willfull behavior the warranty term should be at most 12 months

d. Each founder is only liable for the fraction of the cap that corresponds to his fraction of shares in the entire company, so a co-founder who has 20 % of shares in a company shall only be liable up to 20% of the cap.

e. All shareholder managers with shares smaller than 7% should be exempt from any liability unless there is a specific reason for that.

f. Damages should be paid only to the extent that the Founder / Manager liable had best knowledge of the Warranty issue.

g. Retribution of damage should be limited to the damage that is incurred directly by the damaging event, confirmed by court ruling and could be reasonably expected. There should be no damage retribution for a loss of valuation of the company, which should be explicitly excluded. Valuation loss is usually covered by downround protection clauses.

h. Retribution of damage should be limited to such damages as cannot be corrected or “repaired”.

i. No damage retribution should be given for damages that are incurred due to lack of cooperation on side of the investor. This could include anything ranging from late payment of investment funds, lack of cooperation in litigation cases, failure of the board members dispatched by the investor to agree in litigating to avoid the damage, and so forth.

k. The most important advice that can be given to any founder signing Reps and Warranties is to put a large amount of energy into the due diligence and disclosure process and the documentation of that due diligence and disclosure process. THis is where attention to detail is a very necessary evil. The contract must include a clause that no events or fact about the company that were or could reasonable have been expected to be known to the investor at the time of the investment can lead to a claim of the investor against the founder. Thus claims are excluded if the the facts that led to the damage were known to the investor.

l. Negotiate all these points, then focus on disclosing well all risks that are part of the business model or lie within the company.

Often investors will present the founders with tough Reps and Warranties basically to incentivize them to puta significant amount of energy in thinking through the risks of the company and the development stage the company is at.

However, founders should rate their investors on the basis on their willingness to accept clauses that correspond with or at least resemble what I advise.

Good Luck!

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We spent the past months preparing our relaunch and securing our next, series B round of funding. I am very happy today because we just received confirmation by the German Antitrust Office that our Funding round is approved.

Our relaunch brings us to the next level, where we simplify channel navigation, combine it with social features, and open our business model one step further to content owners, by letting them have a larger share in our advertising revenue. We still have a lot of optimization work ahead, but the metrics of the past weeks suggest that we are on the right track.

The round of funding we just secured will lay the groundwork for our further expansion, and I am happy and proud that we now have French, Spanish, Italian, Polish, Russian and of course Turkish localizations.

Here’s our official Press Release:

http://corporate.sevenload.com/sevenload-secures-new-round-of-financing/

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