One of the Google alerts I receive on a regular basis is “Startup Funding.” A common theme is how the flow of capital speaks volumes about trends and direction of the new company creation process. One of the things that I always find perplexing is the number of companies that have nothing in the way of a real business model that are raising tons of capital.
To clarify, I have an old fashioned definition of the term business model, loosely described as producing a product or service someone will pay for in an amount greater than it costs you to provide it. More than a few companies seem to have being sold to an acquirer as their sole operational goal.
In many cases, excess capital is problematic for startups and slows the development cycle for rapid creation of viable business models. Instead of rapidly adjusting and refining the business to meet the needs and demands of customers, large scale cash infusions can hide a myriad of business issues until its too late to do anything about them. HBR says a startup’s objective is to look for a sustainable business model vs. executing one. Often, the very act of raising funds is interpreted as business model validation, which is wrong more often than not.
To build Carusele™, we decided from the beginning not to take outside capital, and that the company would have to survive on its own ability to generate revenue from ongoing operations. The key investment capital included the experience and relationships of the founders, process and material support from Ignite Social Media and the collaboration and innovation of our partners.
Our team identified that for our potential customers, social media marketing is too difficult in terms of overall effort, measuring ROI or both. The goal of Carusele is to offer packaged social media buys that deliver a wide range of social content types (video, images, blog posts etc.) combined with scaled syndication and managed community engagement. The result is a single social media advertising buy that delivers Content Everywhere™, our proprietary methodology for delivering organic social media buys to our customers.
Lean startup practices have enabled us to quickly iterate each of the programs we’ve delivered to date working closely with customers to quickly adjust and improve the quality, reach and overall engagement of the media and syndication. When implemented, the efficiency of Carusele media has increased exponentially with each subsequent program. CPMs continue to decrease as we’ve combined various content inputs with multiple aggregation and syndication configurations.