Return On Influence: The Revolutionary Power of Klout, Social Scoring, and Influence Marketing by Mark Schaefer

Author:Mark Schaefer [Schaefer, Mark]
Language: eng
Format: mobi
Publisher: McGraw-Hill
Published: 2012-02-14T14:00:00+00:00

The Breakthrough

Money troubles continued to plague the young company despite the welcome infusion of cash. Ten months after the meeting with Spivack, Klout had no further interest from investors. “We were running on fumes the whole year,” Fernandez said. “I pitched over 100 angel investors, and some would say, ‘That’s a dumb idea; Twitter’s going to disappear.’ Others would say, ‘This is a good idea; you should focus on the data side.’ So I would revise my pitch for the next investor and focus on the data side, and then they would say, ‘No, you should focus on the advertising piece,’ so then my pitch would change for the next presentation.”

“I finally decided I needed to focus on my own vision for Klout,” he said, “and I eventually attracted 37 angel investors, which is a lot—I don’t know of any start-up that has that many. But we didn’t attract any of the big names or these big shots that other tech companies have as investors. We sort of have this group of random, organic long-term investors, and over time we raised $1.5 million. That is what really got us going. We were able to hire a few people and move into an office in San Francisco.”

The entrepreneur’s networking instincts were keen even when it came to the location of the new company offices at 795 Folsom Street, the site of Twitter’s headquarters.

“With our business model,” he said, “it was important to be best friends with the Twitter guys.” His theory was that by hanging out with executives at one of the hottest tech companies around, some of the magic could rub off. “I wanted to see who was visiting the Twitter office so I could pounce on them and meet them,” said Fernandez. “And then I would invite them to swing by and visit us next door at Klout.”

With an increasing number of fans in high places, the company easily raised another $1.5 million in May 2010 and seemed to be riding the wave of social media popularity.

“Social media and Twitter blew up, and the economy started to get better,” Fernandez said. “Everyone, it seemed, began to realize that what we were doing might be important, and we started to get a lot of attention from the institutional VCs [venture capitalists]. In December 2010 we closed on $8.5 million from Kleiner Perkins. Basically, they are the Stanford or Harvard of venture capitalists. So to go from no interest in us at all to having the best VC in the world in less than a year was pretty exciting.”

The Momentum for Social Scoring

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