Talkbiznow.com's CEO Martin Warnerhas been making the tech start-up rounds: raising money, talking to the press, raising money, working to attract customers, raising money. The company is trying to position itself as a new approach to using social networks in business, adding such software services as blogging, webinar facilities, calendars, free user advertisements, and online stores to the more expected linking with colleagues and business associates. But some things about the company frankly have seemed a little odd. It claimed having raised investor money but wouldn't say how much reveal anything about the sources. A press release came out with some outlandish claims, like being "predicted to be five times bigger than Facebook." We chatted with Warner about the release, the company, and his latest effort in raising money.
BNET: Who predicted that the company would be five times bigger than Facebook? What's the basis for the claim? Martin Warner: Who said that? [What we said was] that the business networking market is going to be five times than the social networking market. It has nothing to do with Facebook. Is that the headline? I've not said it.
BNET: Didn't you vet the release? MW: I approve or my president approves every press release, but this comes as a complete surprise to us. It's not good form if someone from our agency released this without being approved.
BNET: The release also claims that Talkbiznow.com is the "world's first business networking site." How is that true? MW: That's a fair comment. If we think about a couple of the players that are trying to do this in the market, Xing out of Germany and LinkedIn out of California, they're allowing business professionals to connect with each other, and on that we all agree. The difference is the way we can do peer to peer networking, hosting a webinar, or selling a product. Once you connect, they don't necessarily say here's what you do to do business online. Ours may appear to a social network to be a little stout. It may look like a business application â€" it is a business application. It is a pure b-to-b networking tool. We haven't seen that on the market. It's whether you have something that wants to be a b-to-b tool or something that sits in the middle of a business and social network.
BNET: How would that differ from business marketplaces, which have been around for a while? MW The way I think of a business marketplace is to create tools to foster business. It requires a primary market where you can do business. That's something we absolutely we think is necessary. But we thought we'd tried with a different set of tools. We'd blend services that were more functional in your job. We absolutely see [a business market place] as key.
BNET: Your release states that the business marketing sector is five times larger than the social networking market and that it would become the largest market on the Internet in five years. What's the source of that information? MW: If you search online, there are a couple of analysts that already talk about these numbers. These are numbers that we've referred to and the team has come up with its own analysis. I could kind of believe that one in ten people would try online networking. With business networking, it's more function. We need it. Experts say that one in [ten] business users will at least try a business network, and we've come to that conclusions that it seems reasonable. Almost all of us have to have a career; we haven't inherited money.
If there's a way to glue relationships in business, people will jump for it. That's why we subscribe to the idea that if everyone is in business, there will be a tendency for people to at least try business networking. Also, not just analysts but VCs are pitching that business networking should work if the right tools are out there. We also are saying that we've based it on what we've seen on the web.
BNET: Why then do the social networks have higher market valuations than LinkedIn, which is the most successful of the business networking sites out there? MW: I think it goes back to evolution and what's happened to the web. The web has always grown slower for business. The phenomenon of social networking just grew earlier. I think it has a lot to do where people are socially. I think as LinkedIn grows bigger and other players come into this market, I think you'll see loftier valuations. They don't really rely on ad sales. There's a problem with ad placements on social networks, but on a business network people aren't scared by advertising. We're trying to shift the market from avoidance to interaction with adverts. The reason I mention all that is the valuation is driven by the capability of the revenue model. We're going to take what we know about you publicly, take your behavior toward advertising, and target ads. You don't find it obtrusive and sometime you lick on it. We're going to do something similar. We'll provide correlation to match the behavior of the corporate ads. I can't say more than that without giving away the secret sauce.
BNET: What will it take to reach the market when you're really late on the scene? MW: Our chosen markets are the US and the UK [and] we're not some university grad that came up with an idea. We' brought products to market. We have to be very clear about what differentiates us, simple transactional values. The next trick is to use the six channels [of promotion].
In six months using the channels that were described, [we're trying to get a few million subscribers], which is a pretty damn aggressive target. What we expect in the following 18 months is another seven million. If we think in two years we think we can get 10 million, just think of what we're thinking of longer term.
BNET: What are the "six channels?" MW: PR, super networkers [on existing social networking sites] with over a thousand relationships each, partnerships, email marketing, branding strategy, and digital marketing.
BNET: Attracting that type of influx and then maintaining it isn't cheap. Your release mentions that you're seeking your third round of funding. MW: Actually, at this point, our fourth round.
BNET: How much have you raised. MW: In the sum of the three rounds, we've received several million.
BNET: But if you're had three rounds I'd guess that you'd raised between three million and five million.
MW: Pounds or dollars.
MW: You'd be low then.
BNET: So you're saying that you've raised between $6 million and $10 million? MW: That's the right [neighborhood].
BNET: How much more are you trying to raise? MW: Probably $15 million.
BNET: To succeed at this level in the time frames you're talking about generally means money and sterling execution. How will you make that happen? MW: We need all of those channels to work well, but we have a couple of those bets that we think will give the payout. For every one person now, they're inviting six people. That's phenomenally high. If we can keep that even at four for the next year, that's an important multiplier. You get it with the right kind of people who adopt these tools. The other one is we are direct marketing to a bunch of people who targeted on our data lists. One is targeting 4.8 million working Americans in most states. They're in middle management rolls in four predominant industries. You've got to go for very large audiences and very targeted [email] messages. We have a pretty compelling strategy if you want brand awareness through email marketing.
BNET: No offense, but the type of over reaching statements in the press release I saw indicated sloppy execution. Might that not come back to bite you? MW: If you read all the press on us, I think we've done very, very well. People have testified how good our press has been. We've got enormous amount of buzz around the application. The press campaign, I'm very happy with. We've got that coverage and, I'm sure, we've got viral targeting based on it. We can put out something that raises more questions and then be ready with answers. That can be effective. We just have to stand up and be counted for our statements.
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