Russ: This is the BusinessMakers Show heard here and online at theBusinessMakers.com and it's guest time on the show and I'm very pleased to have back with me Blair Garrou, Managing Director of DFJ Mercury, doing another one of his Dealmaker Series. Blair, welcome to The BusinessMakers Show.

Blair: Thanks, Russ. As always, great to be here.

Russ: You bet. Why don't we start with you sharing a little background on DFJ Mercury and then the mission of The Dealmaker Series?

Blair: Sure thing. DFJ Mercury is an early-stage venture capital fund and we make investments in exciting new technology companies. The Dealmaker Show is a way for us to showcase some of the more interesting startups that we've seen through deal review process. We also hope that our listeners can benefit from the successes and challenges of some of our show's profiled entrepreneurs.

Russ: Okay and so what are we going to be able to review this morning?

Blair: So today we'll be profiling an Austin-based startup company named Spredfast.

Russ: Think it's time for me to get out of the way and let you go.

Blair: That sounds great, Russ.

Blair: Okay, today we have Ken Cho, Cofounder and CEO of Spredfast. I've known Ken Cho for over two years and I'm excited to have him on our show to talk about his new software product. Ken, welcome to The Dealmakers.

Kenneth: Thanks, Blair. It's nice to be here.

Blair: Now Ken, as you know VCs love to have entrepreneurs give them a elevator pitch as a way of introducing their idea. So why don't you give our listeners an overview of Spredfast?

Kenneth: Spredfast is a social media marketing system that helps our customers streamline and measure their effectiveness of their social media efforts. With Spredfast, marketers and communicators can manage, monitor and measure their campaigns across blogs, Facebook, Twitter, LinkedIn, MySpace and other platforms all from a single dashboard. Spredfast helps to build great campaigns from the bottom up; helping generate and fine-tune the messages that attract and engage audiences.

Blair: Now this is a really cool idea to me because the number one question I hear from both small and large company owners, being a VC, is social media - how do we manage it? How do we use it more effectively? How do we get our products to market using it? So is your software - does it help manage campaigns for small companies or large companies?

Kenneth: I mean, actually, it is getting traction in both. Both small and large companies can benefit from Spredfast. It has a very low price point so that even a coffee shop, currently that's using it, could benefit from using Spredfast.

Blair: So walk me through that example. So I'm a small coffee shop owner. I have certain clientele that come through my doors. I want to have a presence on Facebook or Twitter and so walk me through how your software actually manages that effort.

Kenneth: So basically what the coffee shop would do is set up a Facebook page as well as a Twitter account and basically their goal for the social media campaign would be something for customer loyalty. They would use Twitter and Facebook in a very similar way that they used email, you know, last year or five years ago.

Blair: Okay.

Kenneth: They would A) send out coupons directly on Twitter that would allow to increase their reach and gather more Twitter followers or they could even blast it to both Twitter and Facebook, all from Spredfast at the same time.

Blair: And your software as well, I'm assuming, would be able to track all that usage and potentially communicate directly with these groups?

Kenneth: That's right. You could even track down to, if he was an e-commerce site, say the coffee shop had a little e-commerce store for mugs or coffeemakers - what you can do from Spredfast is track from a Tweet, a clickthrough all the way down to the sale, to the e-commerce site.

Blair: Okay, so I understand how a small company would use this. It seems very cost-effective. What about a large company? Do you have any large companies using the product currently?

Kenneth: Yeah, we have many large companies using it currently. IBM is the largest company that is currently using Spredfast but -

Blair: I would say that's a big company.

Kenneth: - yeah. A good example -not necessarily a large company but a large campaign is an Austin-based company called Home Away.

Blair: Yep.

Kenneth: Who ran their Superbowl campaign or the social media campaign of their Superbowl ad on Spredfast.

Blair: So that was the Griswolds ad that they ran during the Superbowl, right?

Kenneth: That's correct. Yeah and so they used Spredfast in a couple of different ways. A) Their main goal was to measure the effectiveness of how well their social media messages did and so for example, they would be able to tweet and update the Facebook pages directly from Spredfast ahead of time. So they would load up a bunch of messages and set it up in a queue and send it out at the right times for their audiences to engage in those messages.

Blair: Very interesting. Now how does your product compare to other social media management products, like Technorati or - I know a lot of people are familiar with Google Alerts -

Kenneth: Right.

Blair: - and then one that I'm familiar with for managing Twitter, called CoTweet.

Kenneth: Spredfast is geared towards the enterprise side of things.

Blair: Okay.

Kenneth: Technorati is a great tool and so is Google Alerts, from a single user perspective but don't devalue singer user - that word - for what it is. Google Alerts is a fantastic tool but what we do is we have some collaboration, user access controls, some detailed reporting that the Technoratis and the Google Alerts don't have. In terms of CoTweet, CoTweet is definitely geared towards the enterprise, just like Spredfast is, but CoTweet is Twitter only. It's a single channel piece of software. It does a fantastic job but what we do, Spredfast goes across seven different channels, currently.

Blair: Okay, so it seems like to me you guys almost manage social the way Salesforce.com manages sales.

Kenneth: That's correct. Yeah, and so what we're trying to do is get down to the user level, have the number of engagements down to the user level. So we are looking at Salesforce, that model as potentially being something that we'd like to be in five years.

Blair: Okay. Well we'll get back to that and we'll have more with Ken Cho with Spredfast in the Dealmakers Series right after this. You're listening to The Dealmakers Series, on The BusinessMakers Show, heard here and online at theBusinessMakers.com.

[Aflac Commercial]

Blair: You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com. I am Blair Garrou, Managing Director of venture capital firm DFJ Mercury, here in another Dealmakers entrepreneur interview. Now let's go back a little bit and talk about the origins of Spredfast. How did you launch the company? How did you come up with the idea? I know this isn't the first iteration of the product that you've have, just knowing you for the last couple of years. Walk our listeners through that process.

Kenneth: Scott McCaskill and I co-founded this company back in March of 2008 and back then, Facebook opened up their platform to allow third-party companies to develop social media applications and we started Spredfast to take advantage of that. Unfortunately, in March of 2009, Facebook redesigned their home page and de-emphasized social applications, basically overnight killing our platform.

Blair: Ouch. Not a good thing.

Kenneth: No, no. It's not a good thing but I believe it was the right move from the Facebook point of view to emphasize fan pages and de-emphasize social applications. So what Scott and I had to do is reinvent the company and develop a new idea and so in the meantime what we did was we took on services work. We were developing social media campaigns, social media strategies on behalf of our clients and we just saw a real pain point in running multiple campaigns at the same time.

Blair: Now I like how you guys have boostrapped really over the last few years. I know you went out to raise some money on your previous iteration-wise but I always like products that stem from services. So talk a little bit about those pain points that some of your customers saw.

Kenneth: We directly saw it initially where -

Blair: Oh, so you were the customer?

Kenneth: - we were the customer initially but then we went out and talked to a lot of different people in a lot of different companies about the same pain points that we were experiencing. The main pain point was gathering metrics.

Blair: Yep.

Kenneth: So what we would do was for our specific client we would tweet out and then log in, tweet, log out, go into their Facebook page, log in, develop the status update or, you know, send that out, log out and then for, you know, client number two, we would do the same thing, over and -

Blair: And have to drill down and compile all that data, analyze it -

Kenneth: That's right and so we would get content out and then towards the end of the week when we had to develop our weekly reports and tell our clients how effective the social media campaign was -

Blair: Right.

Kenneth: - is that we would then have to go back in, copy and paste the metrics, copy it into Excel, go into Twitter, Facebook, go into their blog metrics, and copy and paste that and it was a real pain to do it.

Blair: Yeah.

Kenneth: Imagine doing that for 20 different clients.

Blair: Yeah, rinse, wash, repeat, right?

Kenneth: That's right. That's right.

Blair: Now just from listening to you guys, though, it seems to me that if someone is a real influencer online and has a lot of social media content, you know, a major blogger or others, that they could use this on a personal basis as well.

Kenneth: Yeah. Definitely if they have a lot of influence, I would recommend them using a system like ours to manage all their social media channels.

Blair: Somebody like, say Russ Capper, right? I mean, could be a big user of the product.

Kenneth: Russ Capper is a social media stud. Yeah, I would definitely encourage him to take a look at Spredfast.

Blair: Now let me ask you this - what about general advice for entrepreneurs? Obviously, you guys bootstrapped. You - well, what I like about it is you almost had a market focus group of yourselves and some of your service-based companies - but what other advice can you give entrepreneurs who are trying to get their company off the ground?

Kenneth: We never really went out for money, initially. What we did was we wanted to develop relationships -

Blair: Right.

Kenneth: - and at least get some feedback on it. So a great piece of advice that I would give entrepreneurs is develop a product hypothesis and talk to as many different people about your product hypothesis. That could be both venture capitalists; that could be people, product managers; that could be potential customers. And just talk to them - not necessarily going for money; not necessarily going for the sale, but just talking with them about your product hypothesis to see how they would react to a product like yours.

Blair: Now any big announcements coming up over the next few months?

Kenneth: We developed an OEM relationship with Radian6-

Blair: Uh huh.

Kenneth: - a leading listening platform out there -

Blair: Okay.

Kenneth: And finally, we are developing some new product features and functions such as benchmarking that we're really excited about, to release in April.

Blair: Well that's great. Now Ken, before we leave, I'd be remiss if I didn't ask you for the web address where listeners can go and sign up for your product.

Kenneth: It's www.spredfast.com. We spell it S-P-R-E-D-F-A-S-T.com and if you spell it correctly, S-P-R-E-A-D-F-A-S-T.com, you'll get there as well.

Blair: Well, Ken, I'd like to thank you for joining us and telling our listeners more about Spredfast.

Kenneth: Thanks, Blair. I really appreciate you having me here.

Blair: And when we come back, I will do my Dealmakers Review of Spredfast with Russ. You're listening to The Dealmakers Series on The BusinessMakers Show, heard here and online at theBusinessMakers.com.

[Aflac Commercial]

Blair: You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com. I'm Blair Garrou, Managing Director of venture capital firm, DFJ Mercury. We're wrapping up our latest Dealmakers Series and it's time for The Dealmaker Review. But before I give you my opinion on the deal, Russ, what'd you think about it?

Russ: Anybody that calls me a social media stud gets straight As from the get-go and I think you ought to invest in them big time, Blair, no.

Blair: Yeah, I tell you what, your listenership's going to be up tenfold, right?

Russ: There you go. You bet. I was impressed. You know, I thought it sounded real interesting and then when I heard they actually managed a Superbowl ad, I was totally impressed, so -

Blair: Well, you know, I think they actually managed two, they're just not allowed to talk about one of them. It's -

Russ: Wow!

Blair: - top secret.

Russ: Wow! I am totally impressed. So I give two thumbs up to Spredfast for sure. But it's more important, this is about what you think about it, so what do you think?

Blair: Well, you know, at first I like this concept of social CRM, customer relationship management. You know, think about if they're able to build this up and become the Salesforce.com for social media management and campaigns.

Russ: Sure.

Blair: There's a number of companies out there doing similar types of things but I don't think everyone has the full offering that these guys do. But even more importantly, these are gutsy entrepreneurs. I've known these guys for a couple of years. They've come to market with multiple iterations of their product. Like Ken said, they never came out and asked for money. They just asked questions and advice for entrepreneurs out there is when you pitch a VC, don't pitch when you need the money. Pitch when you're developing the product idea. It's a great way to kind of bait the hook and get them interested.

Russ: Cool.

Blair: And you know, these guys haven't given up. They're still kind of raising money but not really and they're just letting the market and the product speak for themselves. And think about that. Let the market provide the product definition rather than investors. I see a lot of startups with great ideas, get investor capital in way too early and that investor capital drives them to conclusions that the market wouldn't have made on their own and I think that is a big, big piece. So that's how to be successful.

Russ: That sounds like great advice, Blair, I hope our startup people out there are paying attention because that is really cool. Right on.

Blair: Absolutely. And I'll say the second piece of advice would be for you to download Spredfast to manage your BusinessMakers radio show.

Russ: Okay. [Laughter] Right, all right. I think I'm going to have to do that, now, after this. Really cool.

Blair: And one last thing I'd like to say, Russ, is we're really interested in listeners' feedback on this program. If you have a business idea or a plan you'd like profiled; or if you have other questions, either from myself or any of our profiled companies, such as Spredfast and our entrepreneur Ken show today, please visit our website at dfjmercury.com and let me know about companies we should profile for future shows.

Russ: Well, Blair, I guess that wraps up another Dealmaker Series.

Blair: Again, thank you Russ. It's been a pleasure.

Russ: You bet. I love seeing the feedback on these pieces, because you definitely get a lot, that's real cool. Okay and that wraps up this Dealmaker Series. You're listening to The BusinessMakers Show, heard here and online at theBusinessMakers.com.