Value for Technology Companies that Target the Consumer – PR Lessons from the first tech bubble burst
Recently, a photo essay appeared in Business Insider about the “dot com” era. It brought back memories, and even déjà vu related to what is happening today. Back in the day, my agency took a hit in the crash of so many startups, but the lessons we learned and principles we applied then still ring true as a cautionary tale for today’s new ventures.
In 1999, it seemed that, overnight, the new flock of consumer-facing dot coms discovered public relations agencies outside the realm of the technology universe. Tech PR agencies were terrific at communicating the nuances of backend development and garnering credibility for VC funding, but they weren’t necessarily reaching targeted consumers with a clear, provocative or entertaining story about their clients’ benefits and value propositions.
Who better, then, to communicate about a consumer product or service with excitement and intrigue than an experienced consumer communications agency? It seems now like a no-brainer, but, up until that point, Silicon Valley-based companies stuck with what they knew.
I won’t soon forget when fogdog.com came-a-calling. It was a nascent sporting goods site soon to be launched as Fogdog Sports. Right out of the gates we approached Fogdog’s business in a way that their initiators had never seen: in our first meeting, our team came outfitted as a skier, a scuba diver, a baseball player and a rock climber to greet them. The plan we presented included stunts, product integration and the early beginnings of content strategy – from showcasing unusual tips on breaking in baseball gloves (running them over with cars for example) to branded mosquito head nets for weather reporters, and hoisting climbing walls in San Francisco’s financial district. We opened up a whole new world of promotion potential to our e-commerce clients.
It was, perhaps, one of the most exhilarating times in selling agency creativity. Unfortunately, so many communications agencies imploded after the dot com bubble burst. We certainly experienced a setback, but it was not a death knell; good fortune which I attribute to our established reputation in the wider consumer product marketplace (and the fact that so many of our clients survived).
Consumers today appear to be on the same, incongruous and disenchanting journey from 15 years ago with fledgling companies as they grow, scale or alter operations to satiate investor expectation for profitability. What is more, the unicorn leaderboard frenzy seems to echo Silicon Valley’s early obsession with business model singularity, sometimes at the cost of not listening to the full scope of user sentiment at every critical round of growth or change. With more digital storytellers, conversations and sharing of content, startups are challenged to confidently communicate their value proposition and maintain loyalists in their ventures, adventures (and even misadventures). A great example of this is illustrated in Farhad Manjoo’s recent New York Times article –The Uber Model, It Turns Out, Doesn’t Translate.
While several dot coms disappeared from the face of the earth by 2002, with the withdrawal of venture capital support, many of our e-clients survived, in my view because we were able to widen the value proposition conversation for them:
- Gloss, a beauty and cosmetics e-commerce site was acquired by Estee Lauder in 2000 and remained an active site until just a few years ago.
- Fogdog is still alive and kicking as part of eBay.
- Cyberbills, with its early electronic bill pay and management service (statusfactory.com), paved the way for the online banking services of today and was acquired by Metavante Corporation.
- Internet Diamonds became Blue Nile which went public in 2004 and is still a successful enterprise.
- TeamToolz offered web based market productivity management tools to improve workflow and collaboration and now falls under the umbrella of Enterprise Content Management solutions company Open Text.
- ServiceMagic, a resource to connect homeowners with pre-screened service professionals, was re-named HomeAdvisor and today is the nation’s largest online home improvement marketplace and resource.
- PlanWell is an online plan room product and was an original e-commerce software application of American Reprographics Company (ARC). ARC, today, is one of the premier document solutions company nationwide.
- Law.com remains a privately held company and is the Web’s most comprehensive legal destination, providing legal professionals and law students with the tools and intelligence required to compete and succeed in today’s wired world.
There are many reasons the early “dot com” industry went under, and it is possible that some did so as a result of over promising in their communications. The need, however, for marketing groundbreaking and fascinating technology via public relations remains, though with sensible communications objectives. With social media giving consumers more direct brand engagement, it’s as important as ever to have a PR partner that reaches and understands the consumer lifecycle from the start.