I’m not an attorney.  I tried reading the Federal Trade Commission’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”  But I honestly couldn’t get past page one.  Page 1 is not even the conclusion of the table of contents.   (FTC Guide)

What I was able to glean from the document, and this is not a legal interpretation, is that you shouldn’t lie about a product just ’cause you are getting paid to do so.  I think that about wraps up the complicated wranglings of the doc.

For those of you that read that last statement and thought to yourself, “what does that mean…exactly,” the remainder of the post is for you.

If an individual is compensated by an advertiser to promote or endorse a product or service, then that endorsement meets the FTC’s rules that apply to the other forms of testimonials.  Compensated does not strictly mean a cash payment, but rather any inducement for service.

The revised Guides have the greatest impact on what is loosely described as “New Media.”  This New Media comprises, but is not exclusively the domain of, blogs.  And while is has been argued that the previous Guides need not be revised at all, since industry regulation and the Commission’s own enforcement is enough to keep our consumers safe from unlawful or untruthful statements by advertisers, it has in fact been so altered.

What is important to keep in mind, is that the advertiser and the blogger can be held liable for claims made by the person submitting the post, should the post be misleading and be a “compensated” endorsement.  I draw a line between the blog owner and the person submitting the post, because in many cases, blogs have paid contributors.  Comments made by the paid contributor can be held against the blog owner and the advertiser.

Additionally, if you read or quote a statement presented by the advertiser, and the statement is false or misleading, and you are being compensated to do so, you can be held liable for the statement.  Even if your compensation is based on presenting the exact “script” as provided by the advertiser.  As was the case with FTC v. Publishing Clearing House, Inc., 106 F.3d 407 (9th Cir. 1997)  Basically, endorsers are not released of their responsibility because they have,”…an obligation to make reasonable inquiries of the advertiser that there is an adequate basis for assertions that the script has them making.”  Notice of adoption on page 20.

What does that mean?  It means that you cannot play dumb and say that you were hired to make the claims and that since you are not an expert, you simply relied on the advertiser to provide you with truthful information.  On the advertiser side, you can’t compensate a blogger to write a review of your product, and be shocked that they made false claims about the amazingness of your product.

In truth, this will likely never affect 99% of us.  There is nothing wrong with being compensated for a written opinion of a product, even if that opinion is coerced  to the side of approval.  What you can’t do is make false statement about the validity of a product, or make unduly claims about the effectiveness of a product while being compensated to do so.

And if all other moral indicators are not pointing to run, be sure to let those that might listen / read your comments know upfront that you are a being paid to make the statements you are making.  You can thank the likes of Acai Berry offers for the crackdown.  If you are upfront about what you are doing, there is nothing to worry about.

For years, those in the know have been pointing to the end of email.  Social Media, they say, is moving the archaic technology aside for what is surely to be the new communication tool of choice.  But email continues to unceremoniously chug along as one of the most effective mediums available to marketers.

Now comes the call of Social Media as the new SEO.  And while I am hesitant to accept the notion, or think anyone is actually suggesting that SEO “goes away,” there is something more to this than simply rhetoric.

If you look at the evolution of technology, and I’m speaking more to the effect of market forces on the development of new applications, then something is happening that might in fact be of interest.  Social Media has created an entirely new frontier.  And if you are not prepared to accept Twitter or Facebook as more than the realm of idol teenage hands, then look at what is happening in search.

Google, and in truth just about everyone, are announcing real-time search that returns results from Social Media content sites such as Twitter.  Many like Google, have direct relationships with Twitter or Facebook, and are using those relationships to develop feeds and push relevant content to the results page.  How much of an effect this has on getting those results to you, according to Google, is that they have reduced the time from effectively being able to show a result from 15 minutes to seconds after the post.

For business, Social Media now has meaning beyond just simple statements of interest to your followers.  If companies like Google are going to start paying attention to what you are saying, and indeed, develop an entire strategy around finding and displaying your content, then what impact does Social Media have on the business landscape?  How does posting  Tweets match efforts in SEO to getting noticed?

In the case of Twitter, if your followers have followers, your content has in effect been recommended by others. So, like page rank, Google is interested in reputation.  But, according to Amit Singhal, a Google Fellow and the leader on real-time search, this is much more than a popularity contest.  There are other factors, of course, in determining which message rises over the noise.  Tag clouds and instances of keywords within proximity are also important.  If “Capital” is shown in close proximity to “Markets” and “Investments,” then Google may be more likely to return this result on a search for start up funding.

But be careful with those hashtags, because density might in fact be a negative.  Which is where the rules for getting attention diverge for the two platforms.  Google does have an approach to addressing the use of hashtags in the algorithm.  In other words, mashing popular terms into a tweet and using the (#) for every word, just might be flagged as negative.  Therefore, instead of using keyword density to your benefit, something like this might be considered spam: @OfferStrategy is the #entrepreneur of #choice for #business #investment in #startup and #vc #funding  http://bit.ly/Re83x.

So, is SEO going away?  Not by a long stretch.  But it does signal a strategy change on the horizon, or the need to adapt to new market forces.  You could even suggest that social media is a mutation on the internet gene and has forever altered search.  What’s not open for discussion is that Social Media is real and important and absolutely necessary to any business strategy.

Occasionally, it is interesting to pick up a random business / marketing magazine from at minimum one market cycle ago (generally 3 years plus) and skim through the pages to see if there are any predictions that seem to have hit their mark.  And to be sure, everyone has an opinion about a particular company (Apple is an easy choice), technology platform (cloud computing) or person (90% of the CEOs in this magazine are gone).

The magazine that was used for this experiment is the March 2004 issue of Fast Company. The cover story is, “What we learned in the new economy.”  And to be sure, EVERYTHING referenced in this post comes from that edition.  Except for the interpretation.

There is a section, starting on page 61, that is titled “Boom-Time Buzz:”  Remember we are talking about a time in which the internet is coming out of the dark ages, a post-bubble market and realities of online-business.  The first Buzz (not yet a Google Colloquialism meaning to steal an entire business plan from Twitter), is “Free Agent Nation is a utopia.  The Brand Called  You makes you more marketable than ever.  Cold Reality: Free Agent Nation is a jungle.  The Brand Called You is the only way to survive.”  The company profiled here was dead before the article came out, but it foretold a truth to come.

The next Buzz to draw my attention was this: “The Internet gives the customer new, limitless power.  Cold Reality: New power yes, limitless, no.”  Curious about what this power is that is being transferred to the consumer allowed for a quick skim of the content.  The take was on the ability of the internet to provide transparency.  In this case, for the consumer to have access to information to allow for greater decision making when purchasing products.  The reference here is to the ability to accumulate not only information from the manufacturer, but information from the consumer of the product.  The beginning of product recommendations and word-of-mouth online.  Another layer pulled back, but still the picture was a bit fuzzy.

It got more interesting when this statement jumped out, “Value does not reside any longer in the products and services that people create.  Now it is the experience that creates the value.”

According to a reference to a Fast Company columnist Shoshana Zuboff, and I’m somewhat paraphrasing here, but using quotes, “we are entering an era in which consumers and companies must create value jointly.”  The next statement tied it together, and again since I know NOW what they didn’t know THEN, and as you are about to hear me conclude, it all made sense to me.  According to someone named Prahalad reference earlier in the article, “The relationship has become mandatory.”  The article claims that the true power of the Internet is that there is a relationship between parties.

What I believe is being discussed, and in some ways foretold, is Social Media.  They didn’t know it at the time, but it seems all too obvious.  Social Media is creating value for a brand.  Companies can no longer take the approach that communication is one-directional.  There are conversations being had, communication taking place that in many cases intentionally excludes the manufacturer.  Your buyers are talking about you, but telling friends / followers / linking people they don’t know, all behind your back.

If companies choose to “listen” to those conversation, if only for informational purposes, then they are in fact part of the conversation.   Choosing to take action in the form of adjustments to manufacturing, product features, greater diversity of choice or simply by reaching out to that one person in Idaho that didn’t like the color of your widget, is truly transformative.

I suppose the article could have been pointing to behavioral marketing and the use of cookies and algorithms in predicting buying behavior.

I’ve had Google buzz not-so-conveniently nestled in my Gmail account for almost 24 hours now.  Most of what I’m seeing from “followers” is something like, “just thought I’d put something here to see what happened.”  From my perspective, nothing.  But because it’s Google, surely they have something more to offer than a “me-too” service that copies Twitter.

It would appear that several brands, including Samsung, are already jumping on the bandwagon.  Maybe it’s because many brands were not early adopters to other Social Network sites.  Maybe because brands are concerned that Google is about to take over the internet and they better get in line or forever be relegated to tier-two networks.  Maybe, Social Media budgets are bigger, and the new guy doesn’t want to find the same fate as the previous guy who lost his job after saying that Social Media was a fad and only good for teens.

So, for job preservation purposes, it would make sense to dig a little deeper.  Is it just an aggregator for social networking sites in the same way Google Reader pulls all your RSS feeds into one convenient location?  An interesting, and seemingly innocuous feature, is the recommendation portion of Buzz.  Google can filter out posts that you are not likely to read anyway.  Wonder if that ties into real-time search.  Wonder if Google gets preferential treatment?  Or if pay-per-click (PPC) advertisers are somehow more “relevant” in Buzz.

What I don’t see is link tracking like you get with Bit.ly, or TwitterFeed where Google Analytics is incorporated with UTM tags for reporting.  Something that is an absolute if you are a business, not so much if you are checking a friend’s status.  No mention of Facebook either.

I do see images from links, videos inline, the ability to comment directly to tweets or comments that are directed to the person providing the original post using an @ reply.  Recommended buzz raises an eyebrow and is something that is tied to others you are following.  It’s not completely clear if they have to select you to see what they are following, or if you are selected by default because of your connection through buzz.

Let’s take a second to review this specifically.  Recommended buzz, and the delivery of that to your inbox, makes me think of things like Page Rank for search.   If I can have my products presented in a thread to friends of friends with comments, that just might be very powerful for me in terms of branding.  Especially if I have a way to “seeing” that communication.

So, in conclusion, there is no conclusion.  It’s just too early to say.  But, you can be certain that there are several brands developing a strategy to address Buzz.  After all, Google is THE internet giant and there is no ignoring them.

Twitter doesn’t want you to follow everyone, no matter how important the service is to the betterment of human kind.  And it has nothing to do with up-time.  They are protecting you from the bad people.

According to “Ginger,” (the person the post is credited to) on Twitter’s forum relating to what they term as best practices, you have to adhere to basic rules of decency…I mean guidelines.  Basically, they don’t want you to become annoying to legitimate users of the system and run everyone off, lest Google be serious about buying them (was that out loud)?  

The Twitter imposed ceiling is 2000.  The number of people you couldn’t possibly be following and still be serious about it.  And if I were using Twitter to keep up with friends’ 140 character soliloquies, then this would make sense.  However, I am not that guy.

Here is what Ginger seems to be saying.  Don’t be over aggressive in who you follow, and don’t un-follow excessive numbers of people.  If you are following 1000 people, but only have 50 or so followers, then you are suspicious.  If you add hundreds of people a day, and un-follow hundreds a day, well then, you are suspicious.

In case you are not familiar, this is what automated apps do to help you get large numbers of followers quickly.  While it is a great way to grow followers, it can get your account suspended.  It’s not that you can’t automate your account, but automation is exactly what the bad guys do.

When it’s okay to automate.  Third-party apps have been developed to help facilitate posting to Twitter, and this is perfectly fine.  For example, Twitter Feed automates the process of pushing a recent Facebook update to Twitter.  In this example, the application ties into the Twitter API and automatically updates your Twitter account without your having to manually re-enter the same information.

When it’s NOT okay to automate.  Setting up bulk follows based on search or keyword terms, or bulk un-follows in large numbers.  Posting spam links, sending duplicate links, using redirects within links and promotion of affiliate offers is generally frowned upon and could lead to suspension.

Again, these are just guidelines, and I have personally come across several accounts that seem very suspicious, regardless of what Ginger thinks.  So, they are not cracking down on general bad manners, just truly egregious behavior.

The best way to avoid getting in Twouble is to keep your follow to following ratio below 1.5 to 1.  In other words, if you are following 150 people, you should have at least 100 followers.  And should you find yourself hurtling toward the 2000 limit, be sure you are bringing a bunch of friends with you.  You’ll need plenty of momentum to crash the glass.

Presented by: Herb Sih

I recently had the privilege to be a VC panelist at the Executive MBA Program at a very fine, local university. Besides being quite impressed with the very high quality of the students (maybe the down economy has forced only the most serious and committed students to enroll), there were a few reminders to me of some of the “unwritten” rules of a venture capital pitch.

While I confess that my experience is primarily through the lens of an entrepreneur’s eyes, given that I have some background (past and current) in the investment community, maybe I can talk “entrepreneur-speak” and bridge this knowledge gap! And while much of this is simple, common sense knowledge (and divulging these “secrets” won’t get me blacklisted with the VC community and force me to go into hiding like Salman Rushdie), some of these are easily forgotten or not fully respected.

1. Prove Your Concept - You may think a technology or an idea will work, but until YOU have actually done it yourself, how do you really know if it will work? Did you do it for someone else inside of a bigger company on somebody else’s nickel? Can you do it for yourself successfully AND profitably? Is it profitable enough (not just gross margin but the overall size of market and total $$$)?

2. Bootstrapping is OK - Can you make your plan work with less money? How about no outside investment? Many people have the notion that they should ask for more money than they need because they have heard VC’s prefer to write larger checks as the due diligence is the same. While somewhat true, if you can do more with less, ultimately it may serve you better financially and demonstrates the talent and will to win that the right team can have in place. Know how much money you really need – and be prepared to explain it clearly!

3. The Devil Is In The Details - There are many different ways to evaluate the merits of an investment opportunity and the team, but if you are sloppy (appearance), late (unable to manage time), lax (not putting enough effort into a deal, term sheet or pitch book, etc) or other issues, what is it going to look like when you have your money from us? I have seen projections as part of an overall business plan in which it was very apparent that the author simply “drug” the numbers across all time periods….I would venture to guess that your cost of goods sold will not remain the exact same number over a five year period. Guess if you have to, but please do not take the lazy way out just to really give me a glimpse of what our relationship will look like after we invest!

4. ALL the Pitches Start to Blend Together Sometimes - Please remind us which company you are, what your company does and other relevant details when we talk. Until the VC and the entrepreneur seeking funding are on a first name basis for children or spouses, many investment opportunities start blending together. That also includes putting reminders on Power Point slides, business plans and materials. Help us remember you.

5. Can you clearly explain what your company does without the fluff? – If you could not explain what your company does to an 8 year old, then you may need to refine your focus. Mission statements that are heavy with jargon and buzz words become very vague sometimes the more words used. Clarity is king. Remember that while no one else may know more about your company than you, be sure to keep it clear and you do not have to share every detail. Just the facts please! No fluff needed!

Presented by: Jene’ Popper-Hong

While all entrepreneurs share the passion necessary to build a business, few share the knowledge or the ability to handle the transition during the exit.  And while your business might seem attractive from a top-line revenue number, there are many details that need to be addressed to ensure your company is legally and financially structured to enter into negotiations.

Jene’ Popper-Hong is a Principle at Business Transition Specialist, the only full-lifecycle merger & acquisition firm in the region helping buy, grow and sell businesses.  Below are the top 10 questions (and answers) she gets when working with clients.

Q:           How do buyers discover and get access to most attractive businesses to buy?

A:            Most successful  buyers conduct an outbound search using a retained intermediary that business owners will trust to screen buyers and only disclose sensitive information when appropriate

Q:           What does it cost to conduct a proactive search to find and acquire a business?

A:            The cost of an outbound search depends on the campaign scope and tactics used to reach the target business owner.

Q:           Why work with an intermediary to help buy or sell a business?

A:            The best intermediaries have 1) an existing network of prospective buyers and sellers, 2) educate and manage the valuation, presentation and transaction processes 3) do the work well that most buyers and sellers don’t have the time to do and as they manage their current responsibilities 4) ensure sensitive information is only disclosed when protected and to qualified recipients and 5) negotiate dispassionately to mitigate emotional responses that can destroy a buyer-seller relationship.

Q:           What are the top three reasons why entrepreneurs fail?

A:            1) not enough capital 2) lack of right team / skill (internally and externally) 3) willingness and ability to plan, manage and adapt to go distance

Q:           What are the key things investors examine when approached for money?

A:            Investors are selective in requiring 1) a well-documented, compelling plan 2) a mature team with the right skills, energy, temperament and commitment 3) skin in the game (to demonstrate that those asking for money would be hurt by losing the investor’s capital)

Q:           What can you do to improve your chance of obtaining bank financing?

A:            1) clean up the books and manage clean financials 2) package the lending opportunity with a complete and compelling story 3) shop the opportunity, using an intermediary who already knows which institutions might be interested  (remember: lenders have their own investment criteria and current portfolios to manage)

Q:           Why do most sellers of business never successfully complete a sale?

A:            They are uneducated to the way businesses are valued, what buyers will pay and what lenders will finance.

Q:           What’s the most difficult part of buying a business (and first place buyers fail)?

A:            Finding an attractive business for sale!  Most attractive business are sold to committed, proactive buyers who’ve gone hunting for yet undiscovered opportunities.

Q:           What percentage of economic buyers of businesses get 100% bank financing to acquire a business?

A:            Generally 0%!  Anyone entrusted a buyer with their money will require that same buyer have “skin in the game”, a vested interest in making sure the business succeeds.

Q:           Which buyer types are generally willing to pay more when acquiring a business, strategic or economic (and why)?

A:            Strategic buyers are generally willing to pay more since in the acquisition they will realize greater or new sources of cash flow.

Jene’ Popper Hong brings over 20 years of business strategy, mergers & acquisitions and problem solving to her role at Business Transition Specialists LLC (BTS). Jene’ is a seasoned executive leader, operator and deal maker having held multiple CFO roles in growth and turnaround situations. Her core skills focus on helping small and medium sized businesses raise capital and grow both organically and via acquisition. Jene’ collaborates with entrepreneurs and business owners to help define and execute vision and goals while navigating and overcoming financial and operational challenges.

Business Transition Specialists (BTS) is the only full-lifecycle merger & acquisition firm in the region helping buy, grow and sell businesses. We provide our clients seasoned trusted advisors, expert guidance and critical resources throughout the ownership lifecycle from initial entry to exit, selling all or part of a business in a planned and managed exit strategy.

You can visit the web site at buygrowsell.com