Coffee with Julie Meyer

As I make my way down Cannon Street, I feel like death warmed up. I’ve had a bad cold for three or four days, and I’ve used the magical power of cigar­ettes to develop a sim­ul­tan­eous cough of room-​​shaking pro­por­tions. I’m off to see Julie Meyer at Ariadne Capital. Julie is perhaps best-​​known as the co-​​founder of First Tuesday, the entrepreneur’s network which claimed half-​​a-​​million members across 100 cities at the height of the dotcom boom. Now, she’s CEO at Ariadne, an invest­ment and advisory firm focusing on web startups.

“Don’t forget to take a dicta­phone,” said one of my col­leagues. “She speaks really quickly.” Scoffing at the youngster’s lack of power-​​note-​​taking skills, I have simply brought my notebook and pen. Like an idiot. He was right. She speaks very quickly and very intensely. Here are some scraps of what I was able to salvage between my coughs. (Apologies, Julie. I hope you didn’t catch anything!)

What is the impact of Web 2.0 on estab­lished busi­nesses, I ask.

“So, what we’re finding is an unusual dynamic between large business and startups. You know how they say that M&A is the new R&D, right? Well, that can bring benefits on both sides. Startups need to develop good habits and prac­tices, no matter what stage they’re at. They need to be on track to be bought. At the same time, large busi­nesses need to be rad­ic­ally open to the dynamic change being offered by new com­panies with new ideas. And large busi­nesses don’t often attract innov­ators. They’re too slow moving and don’t want to change, you know? Change more often comes from outside com­panies rather than within them. So there’s a lot to be gained on both sides by new com­panies working hand-​​in-​​hand with estab­lished ones.

“One company that we’ve worked with is Monitise. Monitise offers banking — real time inform­a­tion, security & payment services — over mobile phones. Monitise has been incub­ated by Morse Plc, the big com­mu­nic­a­tions company. That’s not a popular word nowadays — incubate — but it’s the best descrip­tion of what’s been hap­pening. Because of that rela­tion­ship, they have been able to strike deals with the big high street banks, which an unaf­fili­ated start-​​up would have a lot of dif­fi­culty with. But they’ve also been inde­pendent enough to be able to do things their own way and be fast-​​moving and agile. That sort of model, where a new company is given some sta­bility and insight into best business prac­tices by a larger company, but also remains inde­pendent in many ways, that’s the way I see things happening.”

There’s a pause here for me to cough and wheeze a bit and des­per­ately gulp down some water.

“A lot of what I under­stand by Web 2.0 is that com­panies need a lot less cash to get started. They’re able to use existing invest­ment by other people. Broadband pen­et­ra­tion is a great example of that. Because people have always-​​on, fast internet access, it’s possible to offer services cheaply that would his­tor­ic­ally have required enormous investment.

“And tech­no­logy is empowering mar­keting. It used to be thought a central business tenet that marketing-​​based com­panies are not a good thing. But now, tech­no­logy has evolved to the extent that that can actually be a very good thing. Another company I’ve been involved with is Eloqua, which you might describe as a next-​​generation salesforce.com. But it also builds in mar­keting tools that give you very fine control over cost-​​per-​​acquisition.

“They used to say that 50% of the money spent on advert­ising is wasted, but you don’t know which half, right? Well, we’re moving to a point where we have the cap­ab­ility for mar­keting to become 100% effi­cient through careful analysis of Google AdWords and other mechanisms.

“Marketing-​​led com­panies can be entirely suc­cessful; it becomes a question of exe­cu­tion. Look at Apple Computer, right? I’ve been involved with e-​​tribes. It’s a social network, but for people my age [To be polite, I can only say that Julie is one month older than me]. A lot of what they’re doing is finding the means to get to the right people to join their service.”

I demur, slightly, and start talking about social mar­keting — blogs and so forth — becoming more important as mar­keting tools, and having less precise ROI calculations…

“Right, so I think what we’re seeing is a couple of things. First of all, we’re moving to a point where com­mu­nic­a­tions are more and more real time. At Ariadne, we publish an online journal that is only updated a few times, but I think we’re moving to a point where people will expect us to have a blog. They expect the inform­a­tion to be updated in real time.

“Also, the nature of mar­keting is changing. Word-​​of-​​mouth has always been enorm­ously powerful, but tech­no­logy is giving it even more power still. People are broad­casting for them­selves, whether that be on a blog or video or whatever it is.

“It’s a question of your aims in that space. People are talking about you whether you like it or not. And you want to be engaged in that, to be part of that feedback loop. Because if you’re not, then you don’t really know what’s going on. Social media lets you show your best side if you can. On a wider scale, we’re moving from a model where com­mu­nic­a­tions are about control of the message, to a point where the best you can hope for is to have some influ­ence. Markets are con­ver­sa­tions, like they say, and the best thing you can do is attempt to join that conversation.”

So, I say, between more coughs, this Web 2.0 thing, is it business or consumer?

“It’s inter­esting, right? Because his­tor­ic­ally the com­panies we’ve been involved with have been B to B to C, and we’ve been at the top of that. Your channel finds your cus­tomers for you. Nowadays, things seem to be a lot flatter, because of the increased power of the internet and you can go directly B to C.

“I wouldn’t say that these services are neces­sarily about either business or consumer, but they are about indi­viduals. People find these services, and if they are useful, then they become part of their business practice.

“It becomes very chal­len­ging for CIOs, because their role is changing. In the past, they’ve decided what software and hardware you’ve got access to in your business. But nowadays, it tends to be more about integration.

“People find and use tools and it’s up to CIOs to help them with that. Take instant mes­saging. As the CIO, you find your sales depart­ment is using IM to talk to cus­tomers. You can’t just shut it down, like they might have done in the old days. The sales people have got rela­tion­ships with cus­tomers through the use of IM, and it’s your job to make sure it works properly and to support that. They’re needing to be a lot more flexible.

“There’s a service I use called SpinVox, another company we’re involved with. It turns speech into text — so you can get your voice messages through your mobile as an SMS. That really helps me as an indi­vidual, because it’s a lot faster and more con­venient. But is it business or consumer? Well, it’s both. We’re also involved with Otodio, which does the opposite in a way. It turns text into voice, so you can say ‘read’ business doc­u­ments while you’re driving your car through the stereo. It’s a business tool, sure, but it’s more about being useful to people as individuals.

“While some of the com­panies we deal with are about mobile phones, that’s an area that I’m actually still quite cautious about. For one thing, it’s very dif­fi­cult to see where things are going as we move from 2.5G to 3G. It’s hard to see what people will want or what will stick. The other big issue is integ­ra­tion. To create an applic­a­tion for mobile phones, you cur­rently need to create 160 dif­ferent versions. That’s quite a scary and expensive prospect for a startup.”

Time for me to go. I scribble furi­ously and pray that I’m not sick before I leave the building.

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