This is brilliant. I especially love the fact that it's not even new. It's just a business model with a twist, and that is what innovation should be about.
Entrepreneurs should not break their heads trying to find the new new thing (credit to the author of the Jim Clark book). All they have to do is ask the question: "How can it be done better?"
One shortfall here is that the internet instantly globalises an online venture, so someone like me cannot partner with you to offer this business here in South Africa..
Nir Eyal is the co-founder and CEO of AdNectar, a company that helps advertisers reach consumers on social networks by incorporating their messages in the form of social gifts. Prior to AdNectar Nir served as CEO & Co-Founder of Sunshine Business Development, a solar energy company based in Long Island, New York.
First, why the shift from Solar to Online Advertising? Is Green overhyped?
In the case of solar energy, we didn’t benefit from network effects like we do in the consumer internet business. I really enjoyed building my last company and ultimately was proud to sell to outside investors. In starting AdNectar, I was attracted to the massive scale that online businesses can reach.
You’re in the Virtual Goods Business Correct?
That’s right, we are within that category. Virtual Goods is a big industry. In fact it’s about a 2.5 billion dollar business and includes everything from gamers buying iconography to virtual gifts exchanged on cell phones
What does AdNectar do?
At our core we help people communicate with each other and put brands into the dialogue as a way to make the communication more meaningful and more fun. If you’re going to send your friend a virtual beer on Facebook, why not make it a Heinken? If you want to share a laugh why not send the latest Will Ferrell video from Funny or Die? In these cases your communication is richer and the brands benefit from the peer-endorsed messaging.
What kind of marketers are you working with?
Gillette, Jelly Belly, Godiva and several alcohol brands have used AdNectar as way to tap into the valuable users on social networks.
When did the company launch?
We had the idea on January of 08 and then spent six months working on the idea as part of our final project at Stanford Business School. We officially launched about a year ago after receiving venture capital investment.
What is you best business move so far?
Working with an amazing team. We are extremely proud of folks we’ve gathered. Not only do we have an amazing team who makes magic happen daily, but I get to work with my best friends.
What’s your worst business move?
When we started we gave away some test campaigns and in retrospect we should have never given our products away. We know our product is too valuable to give away.
What advice do you have for other entrepreneurs?
First, know what type of business you are in. There’s nothing wrong with starting a great lifestyle business but if you are taking on venture capital and swinging for the fences here’s what you need to have:
1. A huge addressable market.
2. A killer team
3. A high margin product or service
4. An idea that is defensible and can scale.
If you can attain those you’ll have a great business.
How do you stay smart?
I talk to every smart person I know. I read everything I can get my hands on. I consult all the wise sages and advisor’s. I crunch data. After I’ve done all that, I go with my gut.
Disclosure: Online Advertising is my primary business and AdNectar is one of companies that I advise.
