B2Bs comprise approximately 60% of all businesses in North America. 98% of them are wired for the Internet, and not surprisingly 98% of them use the Internet everyday, primarily for email but also to perform many of their office tasks. Many of these businesses are classified as small (<250 employees), selling to other businesses.

I was reading an article by Brian Halligan on how even today, many software companies (which are typically B2B) still sell the much the same way they did 10 years ago, which I concur with. These best practices would involve conferences, trade shows, and outside sales reps that were located near your office. These sales reps would come meet with you, demo the software, negotiate the deal and close over time.

As Brian puts it, today a potential customer is more likely to start by searching Google.
After further research on Google, the customer will contact the vendor at their convenience but after the customer knows a lot more about the product than they did in the past. They will almost be ready to buy by the first live contact with a sales rep!

I agree with Brian in that B2Bs have not changed much in this respect. B2Cs have embraced this concept and reduced their costs and sales cycles. B2Bs (who have more to gain) by reducing sales cycles and sales costs need to realize that websites and relevant traffic are not only for e-commerce. Products like ActiveConversion help solve this problem.

Companies like Replicon, M-Tech end up dominating their niches from anywhere in the world, (in this case Calgary!), while spending much less than their competition on marketing and sales while reaching more customers all over the world. Salesforce.com calls it Marketing in the Web 2.0 Era. B2Bs need to get with it or expect their lunch to be eaten because this marketing is faster, cheaper, more effective and reaches more customers at a fraction of the cost of marketing the ‘old way’.

I get a number of requests to invest, and have a network of various people who invest in private companies. Many are tech startups, and almost all are startups. we look into most, because like most people, we’re looking for the next Google or Research In Motion (makers of the Blackberry). Sadly, many don’t even get to becoming a successful niche small business.

I’ve had some winners and losers in those I’ve invested in and I’ll share what I think made the difference. It won’t be anything new that you couldn’t find in Business 2.0 articles but maybe the personal (and blunt) viewpoint will help.

In general, it’s NOT the idea unless the idea has already taken off. I’m relying on the skill and experience of the management team. With a good team, the idea has already been vetted by them, AND they already know that execution will be the key. Ideas abound, and no doubt if it’s any good, it’s already being done so executing it better is paramount. And much like many investors today, I’m less interested in the business plan or the Powerpoint slides, and more interested in the answers to critical ‘hard’ questions that will favorably show your team’s understanding of business, management and marketing.

Having done it before is particularly important. There is no substitute for startup experience in startups. One of the founders should be a ‘done it before’ person or are getting someone like that. If they haven’t, then at minimum the team should have a CFO or someone who thinks like one. If you can convince an accountant type to join your team, you get points in addition to having someone who understands finance and what investors want.

Founders sometimes forget that investors are in it to make money, not to change the world like they are. So limit the discussion about how great the product is. Tell people how your only problem is scaling because of the growing demand and you’ll get anybody’s attention. Capital will flock to you when the business model is proven so get it as far you can, with even a beta product. You’ll get much less of a response, when the money is to ‘build it or to finish building it..’.

In summary, there’s lots of money out there. Show that you have an execution team and strategy, and can make money with their money. Have an excellent rate of return (>25%/yr), with as little technical and marketing risk as possible, and you’ll get investor attention. Make sure there’s an exit strategy for them in five years or less and you’ll have covered the bases. The best part is, with all this in place, you’ll likely be successful as well!

I got some interest from my Microsoft vs Google post, so I thought I would continue some thoughts there. It was recently announced by Microsoft that the search and ad platforms were going to be aligned ‘under a single R&D leader…as we drive advances in our search, commerce…’. Well, duh, why weren’t they doing this before?

Also, ‘We must also move forward aggressively in considering how and where Search and ad-supported offerings fit within and across the entire Microsoft product and services portfolio.’. More duh. Isn’t that what the billion dollars spent on MSN Live and Ad Center was all about?

I probably sound like a MS basher (which I’m not), but c’mon wake up and smell the roses MSFT! Search is ad-supported and go together like Excel and Word. Why did it take yet another year (and another change at the MSN helm) to get this obvious alignment in place? Sure, they can say that search is not the ONLY thing ad supported but that’s like saying tires don’t only go on cars. I really don’t get it. A friend of mine at Microsoft once said to me many years ago, that you can’t be half-pregnant about strategy. Well, he should start running the place, because MSFT’s search and online strategy sure is half prego!

On another note, what about Yahoo vs Microsoft for second place in the search and online sweepstakes? Yahoo currently has 20.7% of searches to Microsoft’s 9% (Google has 55%). Will Microsoft even get past Yahoo? Let me know your thoughts.

Went to a Microsoft event on social networks and social computing last week with Patrick and Mark to see  what their researchers were coming up with. We were disappointed. It did get better at the end but by then it was too late. They didn’t even mention Crowdsourcing, which is well known in Calgary because of Cambrian House.

Things like this make me wonder if there is GOING to be a Microsoft vs Google battle. I think to have a versus, the other needs to show up, and I don’t see MSFT coming forward yet. The big guys in Redmond have lots of talent, money (and paranoia hopefully) still but it takes more than that. They’re missing the boat like they did on search. Sure they can build a search engine, and it *might* even be as good as Google’s, but it takes more than that to take on a paradigm shift. It takes a huge mental shift from a lot of people there, which hasn’t happened yet.

It reminds me of when Microsoft was eating IBM’s (and everyone else’s) lunch. Client server was not reliable, PCs were toys, and MSFT was an upstart. Remember when IBM was shipping PCs with OS/2 pre-installed, and users were replacing it with Windows right away?

In any case, it may seem obvious but history does repeat itself because people repeat their behavior and attitudes. And businesses are about people, not technology - even tech companies. Unless Microsoft loses billions (like IBM did in the early 90s), don’t expect much change, and therefore no Microsoft vs Google battle.

So I’ve been asked by my associates at FoundPages/ActiveConversion to write a personal blog, so that we can become more visible and use social networking like we’re supposed to. I’ve been around the web for so long, I can remember when blogging started, and in fact created one in 2003. I didn’t get any traction with it (after writing 1 post…), nor did I have time to continue.

Web 2.0 has changed how information is shared, distributed and even trusted. Blogging, RSS, and online bookmarking (Digg, Delicous etc.) are all part of that so here goes.

My interests are technology, business, investing, marketing, startup philosophy, and management. So I’ll probably be blogging about those topics. There is a lot to share from me to you and from you to me, so link to me and add me to your RSS feed. And if you really Digg this, bookmark it with Deli.cio.us.