Small Business Spotlight: NY Vocal Coaching
New York Vocal Coaching, a premiere studio for voice and speech training, drastically improves their efficiency by implementing ShopKeep as their point of sale system.
DetailsNew York Vocal Coaching, a premiere studio for voice and speech training, drastically improves their efficiency by implementing ShopKeep as their point of sale system.
DetailsAn exemplary customer care experience can completely redefine how someone feels about a brand. It can turn a one-off purchase into a lifetime of loyalty and transform an average consumer into a passionate brand advocate.
Wowing your customers is a powerful tool, but when it’s done right, it should also hurt a little. Why? Because providing an above and beyond, truly memorable customer-service experience actually involves going out of your way for people. It’s not easy, or else everyone would do it.
Exceptional care means actually doing more than what your customers expect — and believe me, your customers expect a lot. For anyone looking to implement this kind of result in their business, I believe it’s about instilling the following beliefs in your teams.
A few years ago I was staying in a hotel on business in California and woke up early for a meeting only to find that the hotel’s café wasn’t open yet. While I was trying to decide on an alternate course of action, a maintenance man from the hotel unlocked the door for me and insisted on helping me in any way he could. Before I knew it, he was preparing a bagel and orange juice for me — even though the café was still closed.
The point? Great customer care isn’t just about having a well-trained customer care team. It’s about empowering everyone in your company to use their discretion to go above and beyond. Don’t just pay lip-service to this. Ingrain this mentality into your employees: Everyone, across your entire organization, is empowered to do what’s necessary to wow the customer.
Related: Becoming Indispensable to Your Customers
I was once lucky enough to travel to Japan on business. There I learned there that while we in the U.S. are proud to say, “the customer is always right,” Japanese corporate culture follows a different, more extreme, maxim: okyaku-sama wa kami-sama desu or “the customer is god. This might seem a little over the top, but remember, the customer is the creator-in-chief of your business.
We’ll always have moments where our customers frustrate us with seemingly outrageous demands but without them, your business doesn’t exist. Your employees should treat them accordingly.
Related: Customers Are Not Always Right. They Are Just Never Wrong.
While it takes a great deal of stress, training, process, software and general hard work to provide effective support, it’s also vital that your customers never sense that effort. It is one of the great ironies of customer service.
For the customer, a delightful customer experience appears like a swan on the water: You might be paddling like a madman, but the appearance above the water should be serene. This isn’t easy, but it’s genuinely what separates a good support experience from the people they tell their friends about.
So remember, to really stand out in the world of customer service you need to commit to empowering your employees, elevating your customers and concealing the behind-the-scenes work required to deliver great care. It might hurt you a little, but your customers will love you for it.
Related: The 3 Essentials Customers Want Most
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DetailsJason Richelson and his partner, Amy Bennett, lost thousands of dollars in sales after the server-based cash-register system crashed at Green Grape, their Fort Greene, Brooklyn-based business, in 2008. That disaster at the wine shop and gourmet food stores soon inspired Mr. Richelson to launch ShopKeep, a cloud-based point-of-sale system for high-volume retailers.
Fast-forward to today. The 180-employee firm has raised $37.2 million in venture capital from investors including Tom Glocer, a former CEO of Thomson Reuters. To max out the company’s valuation, it brought in Norm Merritt, former chief executive of iQor, a $550 million business-process outsourcing firm, as CEO and president eight months ago.
“They hired me to help them scale the business and get it to the next level,” said Mr. Merritt. That “next level,” they hope, is a lucrative exit, though Mr. Merritt said exactly what form it will take is to be determined. As Mr. Richelson, now chief strategy officer, told Tech Crunch last year, “There are no billion-dollar software-as-a-service businesses that have been born in New York City. That’s our goal.”
ShopKeep isn’t alone in making carefully calculated strategic hires and other moves with the hope of winning a billion-dollar valuation. More firms are doing so, thanks to inspiration from IPOs like OnDeck’s in December.
New York’s largest venture-backed tech exits, 2012-2014
Company | Acquirer | Year | Valuation1 |
---|---|---|---|
OnDeck | Public | 2014 | $1.3 billion |
Tumblr | Yahoo | 2013 | $1.1 billion |
Varonis Systems | Public | 2014 | $524.4 million |
Tremor Video | Public | 2014 | $494.2 million |
Buddy Media | Salesforce | 2012 | $745.0 million |
Shutterstock | Public | 2012 | $570.0 million |
Source: CB Insights1 IPO valuations used are as of the opening of trading.
OnDeck raised about $200 million and put the firm’s value at about $1.3 billion in the largest venture-backed tech exit ever in the city, according to CB Insights, which tracks privately held companies.
Meanwhile, there has been plenty of speculation about an IPO for database firm MongoDB, valued at about $1.2 billion, and online marketplace Etsy, based in Brooklyn, which could raise as much as $300 million in an IPO.
Yext, which allows businesses to manage their digital presence, had a $50 million round of fundraising in June and then hired a CFO in October who had guided both Pandora and Salesforce through their IPOs.
Outbrain, one of Crain’s Best Places to Work last year, is reportedly considering an IPO to raise $100 million, which would put its worth at more than $1 billion. One reason for these high valuations is that startups are waiting longer to exit than they have in the past and are using the time to scale up and raise lots of cash in the private markets.
Last year was a big one for M&A deals, too, with 184 venture-backed tech companies in New York City acquired, according to PrivCo, which provides data and financial research on privately held companies. That number was second only to Silicon Valley, which had about 280, according to PrivCo CEO Sam Hamadeh. In the recent past, he said, a good year for acquisitions in New York City meant 75 to 100.
“There is a lot of money in the system right now,” said Nick Beim, a partner at venture-capital firm Venrock. “It’s a great time to raise money in the private markets, and we are witnessing the rise of some of the fastest-growing companies we’ve ever seen.”
To position themselves for a dazzling exit, companies have changed their later-stage funding strategies to take advantage of the availability of investment capital. Some are turning to sources other than venture capital for that funding.
“A lot of these later rounds, which are so large, are being done by financial institutions like JPMorgan and Goldman, hedge funds and larger corporate entities,” said Jalak Jobanputra, founder and managing partner of FuturePerfect Ventures, an early-stage venture fund in Manhattan.
As they wait longer to exit, companies are putting their growth on steroids to maximize their value. “We’re pushing as fast and as hard as we can, because the greater the angle of your curve, the more valuable you are,” said Dane Atkinson, a co-founder and CEO of SumAll, a startup that gives customers, mostly businesses, the information about them collected online. SumAll has raised about $15 million and has had 1,000% growth year-over-year but is not profitable.
The 44-employee company, launched in 2011, is based in Manhattan’s financial district. About 340,000 businesses and 20,000 individuals currently use its tools.
An exit for SumAll is “years away,” said Mr. Atkinson, but an IPO, rather than an acquisition, is most likely. “We have upwards of a million active individuals using us, which means we’ve built a lot of brand awareness, so whenever we do a filing, we’re not just saying that 300 customers use us, it’s a million,” he said. To hit its goal, SumAll has hired a business-development executive who came from American Express and has experience building corporate partnerships.
ShopKeep is using a similar strategy. Mr. Merritt, the CEO, said the company is “on a tear now, growing rapidly, about 10% a month. We are getting as many merchants on board as we can and building our network, which creates a lot of value for potential investors.” The company is not profitable “by choice,” said Mr. Merritt, instead investing revenue in marketing to rapidly acquire customers.
Proving they have recurring revenue is critical for companies that want to hit it big. Chelsea-based Olapic—a visual-marketing firm that enables brands to find and use customer-generated images of their products—is focusing on building a strong financial base for a potential IPO. CEO and co-founder Pau Sabria said Olapic’s revenue is highly predictable and scalable.
“For an IPO, you have to have $100 million in revenue, and we are pretty much on track to do that in four years,” Mr. Sabria said. Olapic launched in April 2011 and now has 97 employees. Mr. Sabria would not disclose revenue but said the company has raised $6 million and isn’t yet profitable.
Many companies are also investing heavily in raising their profile in the current climate. Betterment, an automated investing service, has raised $45 million since launching in 2010, and its assets under management have grown almost 400% every year. The firm, headquartered on West 23rd Street in Manhattan, has 80 employees and manages about $1.2 billion in assets for 60,000 customers, but declined to disclose revenue or profitability.
When asked about exit plans, founder and CEO Jon Stein said he is “in it for the long haul,” but his company is also growing rapidly and doing more marketing than ever—outdoor advertising, television, National Public Radio, online and content marketing—to raise its visibility.
In angling for later, bigger exits, these organizations are also going into overdrive to attract top-notch executives and engineers. Betterment is filling out its leadership team with “growth executives” hired in the past year, said Mr. Stein. And many firms funnel their early investment capital into attracting and retaining the high-quality technical talent that raises a firm’s profile. “Engineers here can command almost the same kind of salaries they can in Silicon Valley, and it’s not just cash,” said PrivCo’s Mr. Hamadeh. “It’s also a bigger say in the direction of the company itself, loftier titles, a chunk of the company.”
Despite the number of startups aiming for a billion-dollar IPO, there is also a trend at the other end of the spectrum, toward startups going public earlier than expected, said Venrock’s Mr. Beim. “People have recognized the market is great for fundraising and exits right now, but they don’t know how long it will last, so in the last couple of years we have also seen tech companies go for an IPO sooner, when they are below $100 million in annual revenue.”
Misti Ushio, chief strategy officer at Harris & Harris Group, an early-stage, publicly traded venture firm in Manhattan, said there is now a “whole ecosystem of bankers, advisers and lawyers that understand how to do smaller IPOs—like $20 million or $50 million, not hundreds of millions. For those businesses, if they can access public -capital, that’s an enormous opportunity,” she said. “It gives a startup access to a huge market they wouldn’t have as a private company.”
To stave off an early acquisition or IPO and get a firm to $1 billion, some investors are pumping more investment capital into founders’ pockets. “Now I would say at least 20% of the B round goes to the founders so they don’t take the $12 million offer that comes around next week,” said SumAll’s Mr. Atkinson, who has built almost a dozen technology companies. “VCs often have a higher risk tolerance than we do, and they are looking for the best maximization.”
Get the EMV information you need. Learn when the shift is coming and how you can best prepare your small business.
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This month’s report focuses on the big announcements that came with the new year, focusing on increased security, new tablets, preparing for the future and innovation in software. To kick off the new year, we added three new players: Panasonic, PayPad, and UBA. We also updated ten new players: Anywhere Commerce, Bluefin’s QuickSwipe, CardFlight, Ezetap, iZettle, Ingenico, PayPal, Verifone, Wincor Nixdorf and Wirecard.
Here are the four key takeaways for this month:
1)Security Step-Ups: With many high profile data breaches in 2014, security is at the top of everyone’s mind. One key theme is the relevance of point-to-point encryption (P2PE) in a mPOS world. Even as more mPOS readers are emerging with EMV compatibility in preparation for the October 2015 EMV liability shift, new devices are being released with (P2PE) capabilities to add another layer of security.
2) Tablets Get Rough and Ready: As popular as mPOS is, it’s been reported that many merchants with mPOS don’t always use them. There are complaints that the devices are not rugged or designed for heavy use in retail environments or they have found flaws in the software. These claims haven’t fallen on deaf ears with announcements from major technology players about new, and rugged tablets.
3) Future-Proofing mPOS: What good is a durable piece of hardware if the software that powers it doesn’t accommodate the next generation of payments?
4) Software Innovations: Speaking of software, Flint Mobile has taken a decidedly different approach to mPOS that is all about software. Flint Co-Founder and CEO, Greg Goldfarb, tells PYMNTS.com how and why a software-centric approach enabled Flint to simplify payment acceptance for service-centric businesses by eliminating the hardware and using the camera to securely scan cards.