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How this Startup is Building a Fortune 500 Client List

March 31, 2014
4,607 Views

Automating social media posts was the ‘it’ technology for businesses and professional bloggers about 4 years ago; but now it takes a hell of a lot more than simple automation to efficiently promote your message.

Navigating social media, content platforms and every other communication channel the Internet offers, has become increasingly complex, expensive and time consuming. With the biggest companies in the world relying on social media to brand themselves, the industry is ripe for a startup to feed the need of these massive organizations with deep pockets.

 

The Good Ol’ Days

Gone are the days when a company just had to throw up a fancy website and its job was done. Now, if you want your website to gain popularity and attract the thousands of daily visitors needed to monetize it, you need a strategy which includes social media, search engine optimization and a consistent content focus.  The online environment has completely changed and is more competitive and creative than ever.

With the evolution of the internet landscape, the inhabitants – the customer, has changed too. They interact differently, they have different tones when traversing different channels, and they have different interaction frequencies and schedules. Penning a blog and throwing up a tweet is no longer a sufficient way to communicate with your customer and drive sales. To engage with the market, brands need to be efficient in execution, constantly communicating and consistent in their message.

 

Enter: Percolate

Percolate was founded by James Gross and Noah Brier, both from the New York City area. Noah was the head of planning for The Barbarian Group and also founder of Likemind. He is a graduate of New York University. James Gross, on the other hand, was the Senior VP at Federated Media Publishing and the head of Business Development at Feedster. The two men are passionate about streamlining the Internet, which currently lacks organization.

 

What Does Percolate Do?

Percolate is generally classified as a Social Media Brand Management and content creation firm.  What that means, is that they do what most people, and large corporations, don’t know how to, which is to manage their content so that it has a better engagement rate with their target audience. (thus improving brand loyalty while streamlining their identity and increasing profits)

Now, if you are just running one blog and have one twitter account and one Facebook account, the work may not seem daunting. In which case you are not the target market for Percolate. But when you are a major corporation like General Mills, and you have a multitude of products targeted at different customers, managing your brand equity and identity online becomes a complex process. For a Fortune 500 Company to manage its online presence by itself would undoubtedly take a staff of 10 to 20 full-time workers.

Optimizing each message and targeting it accurately takes tremendous effort, and it becomes expensive for large companies to do this repeatedly. Percolate streamlines that, providing cost savings and better customer engagement for major corporations. Percolate has already signed on, as clients, some of the biggest corporations in America.

“Percolate is the only content software built with the brand in mind. Our platform codes all aspects of a brand identity into technology, from taglines and content pillars to logos and color palettes, powering governance tools for scalable, on-brand content creation.”

– Percolate

Raising Venture Capital

Percolate initially raised $9 million in Series A funding, and more recently announced an additional $25 million in Series B funding. The most recent round of funding had participation from Sequoia Capital and will result in Sequoia’s Mike Dixon becoming a member of Percolate’s board of directors.

The new round of funds is meant to expedite Percolate’s international expansion and increase its marketing efforts. The company already has a strong work force and an impressive list of clients in America. Leveraging its current client base will most certainly speed up Percolate’s international expansion plans.

Not only are Percolate’s revenue numbers growing, the quality of the clients that have come on board are assuring. The likes of Visa, Xerox, Dell and Reuters are just a handful of names that have signed on to have their social media and messages streamlined by Percolate.

 

Strengths and Weakness

When a company comes up for Series B funding, it indicates two things to me. First, it tells me that they have managed to meet the goals of the first round of funding and the folks that participated in the second round are happy with what they’ve seen (mostly). The second thing that it tells me is that the company is expanding. However, when the second round of funders buy in with larger amounts or at greater valuation, and the second round funders are highly reputable names, in this case it’s Sequoia, that says a lot too. From an investment standpoint, I’d like to get in on something like that. Investors have the sheep mentality and follow smart money like Sequoia. As such, if future capital is needed, or perhaps an IPO, raising the money shouldn’t be a problem for Percolate.

As far as strengths go in this area, from a business standpoint, Percolate is ahead of the game and has a serious first mover advantage in the industry. In fact, it somewhat created this industry; and as such, it is free to carve out the definition of what it takes to succeed in this space.

It must be noted that this industry is rather peculiar and if there is a second mover in the market, they could redefine the space. But, as an investor, that is a risk I’d be willing to take given how innovative and needed Percolate’s service is.

 

Key Success Factors

The startup paradigm has changed in the last decade, and more so in the last three years. It is no longer an idea or the technology that drives revenues or determines success. The key driver is the ability to create convenience and efficiency in one offering. The social media and communication market is very fluid at this point. Better ways of reaching the consumer are being thought of everyday and more importantly, the customer himself is changing almost daily. Identifying those changes, developing a service to maximize the new environment while saving the client’s time and money is precisely what Percolate is doing.

Percolate is running efficiently and has the seal of approval from leading venture capitalists and top-end customers. Momentum is behind the burgeoning startup and we are going to be hearing much more from this company over the coming weeks (not months).  When a company is just coming up to Series B and already able to boast a blue chip clientele list, that inspires confidence. This startup is going nowhere but up…

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AJ is a naturalist and economic realist. His articles are based on his study of world events and common sense, not conventional wisdom. He believes technology allows humanity to get past the deficiencies inherent in civilization's inadequate political methods and deficient economic tools. His observations are sometimes radical, sometimes provocative and sometimes misunderstood. But they are effective in evoking a discourse. Ultimately, that is his intention and desire - to stir the pot in search of solutions to today's political and economical challenges.

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