Lessons Learned from a Social Media Sandstorm
By Megan Maltby
You’ve heard the expressions before. “Any press is good press,” “There is no such thing as bad publicity,” and even the colloquial “As long as you spell my name right.” All point to the idea that any mention of your business in public communication will lead to greater awareness and positive attention, despite the intended point behind such publicity. It sure didn’t feel that way when First Angel Network recently found itself in the midst of a social media sandstorm. While I would have to disagree with the overall message portrayed by these expressions, there is definitely something to be said for the underlying sentiment: something positive can always be gleaned from something negative.
The First Angel Network Association recently became the focus of some controversial discussions. A Toronto blogger decided to air his complaints and concerns surrounding our business model. His post appeared on Startup North and quickly gained traction on Twitter and other forms of social media. While the experience was admittedly a little disheartening and overwhelming at first, I quickly learned that experiences like this should be treated as a valuable learning opportunity and a potential path to improvement.
It was pretty clear our critics did not understand FAN, our business model, or our passion to promote great startups. Therefore, we decided to do a better job of explaining how FAN works (a flowchart of our funding process can be found here). Open communication is vital for any organization, particularly those who aim to give back to the community. For that reason, I provide you with some thoughts on the experience and the top five lessons we have learned along the way:
1. There are always going to be critics- evolving technology has just made it alarmingly easy for opinions to spread.
Organizations and individuals alike have always been vulnerable to public discourse and unfavorable publicity. No matter how hard you work, there is always going to be someone out there who disagrees with you. You can’t please everyone, nor should you strive to. However, while in the past, bad publicity was spread via word-of-mouth and more traditional press channels, today, more and more people are taking to the Internet to air their grievances. In a world where a video can garner over 34,000,000 views in one day (the Kony 2012 viral video if anyone is interested), it has become clear that the spread of media is becoming more rapid-fire than ever. Even more interestingly, is how easy it is for any average person to gain access to the masses. While customer service complaints in the past were kept as a dialogue between two main parties, today people instantly take to Facebook and Twitter to bash companies in front of millions. This makes it incredibly easy for an idea to catch on and become big news in a matter of minutes or hours. Even within the relatively small startup ecosystem in Canada, the blog posts targeting First Angel Network did receive a fair amount of attention in a very short period of time.
2. Your best advocates are those with first-hand experience.
Throughout the experience, we understood that this discussion was happening for a reason. Some individuals believed our business model was unfair to entrepreneurs within the region. With complaints like this coming in, we made a serious effort to contact entrepreneurs themselves and get feedback on our process. First Angel Network has invested in 24 startup companies to date, and provided mentoring and presentation advice for many others (free of charge). As expected, those we contacted provided excellent feedback on the FAN funding process and spoke extremely highly of the business growth they each achieved after FAN involvement. It became increasingly obvious that those who criticized our methods were doing so from other areas in Canada, far removed from the startup ecosystem here in the Atlantic provinces. Our biggest supporters have been those who have actually worked directly with us, and have in-depth knowledge of our due-diligence and pitching process. Many of the comments on the original blog post and other follow-up posts were from former and current members of the network who defended our organization. Luckily, this social media frenzy forced us to realize that the best publicity comes from those with first-hand insight, and we began adding testimonials to our website as a result.
3. Stick to your guns if you truly see the benefit of your business model.
The blog posts in question disagreed with the fact that we charge companies a $3000 fee to present to our network of investors. Yes, this fee is applied to those few companies who are chosen to present, but there are several details surrounding this payment which should be discussed further. Each year FAN receives around 100 applications from entrepreneurs looking to secure investment for their startup ventures. We analyze each opportunity, have face-to-face meetings with most applicants, and choose one company each quarter for presentation to our network of angel investors. At this point, the company in question is expected to prepare a presentation to be delivered at several private events around Atlantic Canada.
Any company which applies to FAN receives business plan review, often receive in-person coaching and advice, and even occasionally referrals to other contacts within the region. This is all done free of charge, as ultimately, the main goal of First Angel Network is to give back to the startup ecosystem here in Atlantic Canada. Only the four companies which are chosen to present at our member meetings each year (one per quarter) are required to contribute $3000 (it should also be noted that the company is given a choice between payment upfront or after investment has been raised). This fee helps cover the costs of the events themselves, and in addition serves as a formal commitment from the entrepreneur(s). Unfortunately, in the past we have had presenting entrepreneurs back out at the last minute, leaving us scrambling to find a suitable replacement opportunity for our members. By introducing a financial commitment, this is less likely to happen, and it actually fosters a greater sense of trust between the startup founder(s) and the network.
While this may seem steep to some, our presenting companies have always been well-funded, and we believe a large part of this has to do with the presenting structure itself. Unlike other den-style pitching sessions, our presenting companies are assured that all of the attention is on them for the evening. They are given a generous amount of time for their presentation/demos, are exposed to a lengthy question and answer discussion, and receive several hours to network with the investors. There is only one presentation each quarter, so there is no direct competition during the session. This model works and we believe it is one of the main factors for our impressive financing success.
4. The startup ecosystem in Atlantic Canada is unmatched.
Throughout this whole ordeal, we at First Angel Network were provided with a great amount of support from other players in the startup ecosystem here in Atlantic Canada. Press outlets in the region were quick to reach out for our input and did so in a very unbiased manner. They were not simply looking to put out a piece with scandalous potential, but to give us a chance to tell our side of the story. Many individuals, including entrepreneurs, members of investment entities, and key figures in the startup world within the region came to our defense and offered up praise for the way we dealt with the issue. It quickly became clear that the startup ecosystem in the region simply cannot be beat in terms of connectedness. Maybe it’s that old East Coast hospitality coming out. Whatever the cause, the support we received from other major players in the region’s startup world was outstanding and reminded us why we love supporting the ecosystem here in Atlantic Canada.
5. Everybody loves a scandal, but few will actually consider the consequences.
Unfortunately, it is human nature to gossip. Many people thrive off of drama and get a thrill out of providing their two cents on controversial topics of discussion. When these blogs were published, it took no time for the masses to weigh in. Some people were shocked and upset. I expect that the large majority of them did not take the time to research and become familiar with First Angel Network and our complete business model. They probably didn’t explore our investment portfolio and successes. They certainly did not look at the positive outcomes of our Atlantic-wide education and outreach programs. And I am fairly positive they did not take the time to reach out to those who have worked with us in order to get direct, first-hand feedback.
It is easy for a crowd mentality to take over. Sometimes this works in positive ways (consider crowd funding and relief efforts), but more often than not it manifests in a negative mode, allowing false or incomplete information to spread at a rapid pace. Social media enables this to happen without consequence. While many will be happy to fuel the fire, very few will be prepared to perform their own due diligence or deal with the consequences. The bloggers in question were invited to meet with us in order to have a frank and open conversation, but neither accepted the offer. Go figure.
While the original spread of unfavorable information appeared daunting and targeted at the time, it turns out this “bad” publicity wasn’t so bad after all. Hopefully now, even our critics understand FAN a little better.