This article originally appeared on TechCrunch (this version is slightly different). Most web publishers measure where their traffic is coming from using an analytics package such as Google Analytics, Omniture or Core Metrics.
These were good packages in the pre social media world at helping figure out who was driving your traffic.
Today they’re wrong. Terribly wrong. And figuring out who is referring your traffic is a very important part of determining how you allocate your marketing budgets. It is almost certain that Twitter is driving much more of your referrals than you think.
Possibly up to 4x more.
Here’s the awe.sm story of why:
Take a look at the Google Analytics log for BothSidesofTheTable.com for yesterday. I had 8,502 visitors yesterday of which 1,669 are listed as “direct.” Direct traffic are people who typed in my URL directly. As in they weren’t referred by anybody.
But look at the second line. This says “direct – bothsid.es / bothsid.es – twitter” and shows 1,423 referrals. Line 5 says twitter.com / bothsid.es – twitter” for 712 referrals and line 9 shows twitter.com for 170 people.
What does that mean?
I use a product called awe.sm to track all of my social media sharing behavior. I’m an investor in the company. What awe.sm does is it allows publishers to be able to track each individual share behavior to a level of granularity that almost no other campaign tracking tool allows.
Today I’m announcing that GRP Partners is doubling down on the Twitter ecosystem by investing in DataSift, a company who provides a real-time data platform and tools to third-party developers and corporations.
Our goal is to make the enormous volume of real-time information more manageable for the 99% of companies that lack the infrastructure to process these volumes in real time. Think of DataSift as turning the fire-hose into a cost-effective and manageable tap of running water. Or in utility speak, they are transmission and we are last-mile distribution.
And better yet, the company has a product that will turn the stream into a lake. What does that mean? The Twitter stream like most others is ephemeral. If you don’t bottle it as it passes by you it’s gone. DataSift has a product that builds a permanent database for you of just the information you want to capture.
Finally, DataSift has an enormous about of historical data already stored we we can help you go back and retrieve some older data for analytical purposes.
This is the final part of a 3-part series on the major changes in the structure of the software & the venture capital industries.
The series started here if you want to read from the start.
Or the Cliff Note’s version:
Open Source & Cloud Computing (led by Amazon) drove down tech startup costs by 90%
The result was a massive increase in startups & a whole group of new funding sources: both angels & “micro VCs”
With more competition in early-stage many VCs are investing smaller amounts at earlier stages. Some are going later stage to not miss out on hot deals. I call this “stage drift.”
The opportunities for tech startups today are more immense than they’ve ever been with billions of people now connected to the Internet nearly all the time.
Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venture capital industry itself.
If you don’t want to read that post, the summary is:
Open source computing drove computing costs down 90%, which spurred innovation in technology
Open cloud led by Amazon with their AWS services drove total operating costs down by 90%. This led to an explosion in startups.
Amazon in turn led to the formation of an earlier stage of venture capital now led by what I call “micro VCs” who typically invest $250-500k in companies rather than the $5-7 million that VCs used to invest.
These trends have put pressure on traditional VCs. Some have done earlier-stage deals and done well. Others have chased earlier-stage but lack the skills or relationships to do this effectively. Some have moved into later stage investments in an effort to “put logos on their websites.
The Venture Capital industry has changed over the past 5 years that I would argue are a direct result of changes in the software industry, not the other way around. Specifically, Amazon has changed our entire industry in profound ways often not attributed strongly enough to them.
I believe the changes to the industry will be lasting rather than temporal change. Venture capital is in the process of its own creative destruction with new market entrants and new models of innovation at the precise moment that our industry itself is contracting.
I will argue that when the dust settles, although we will have fewer firms, each type well end up more focused on traditional stage segments that cater to the core competencies of that firm. The trend of funding anything from the first $25k to funding $50 million at a billion+ valuation is unlikely to last as the skills and style to be effective at all stages are diverse enough to warrant focus.
I will argue that LPs who invest in VC funds will also need to adjust a bit as well.
When I built my first company starting in 1999 it cost $2.5 million in infrastructure just to get started and another $2.
This post originally ran on TechCrunch.
I recently spoke at the Founder Showcase at the request of Adeo Ressi. I asked what the audience most needed to hear.
He said, “They need an unbiased view of the fund raising environment because there is too much misinformation and everything seems to be changing fast.”
This was an audience of mostly first-time entrepreneurs. They have seen one side of a market where many of us have seen the ebb and flow multiple times. Still, market amnesia by ordinarily rational actors always surprises me.
I spoke about a lot of things during the keynote. If you are interested the Vimeo is here.