Leading up to the BIA/Kelsey NOW Conference, which will debut in San Francisco this June, we’re kicking off a regular series of blog postings on the Local On-Demand Economy (see our white paper). Twice per week, we’ll wrap notable news, fundings and executive moves in the LODE world.

Top Fundraiser Ever Leaves Uber

Uber Chief Financial Officer Brent Callinicos, who raised more venture capital than any CFO in history for the on-demand car service, has stepped down to spend more time with his wife and daughter. Having delivered $5.6 billion in funding to the company since he joined in September 2013, Callinicos’ record is unmatched among startup financial executives.

He joined the company shortly after its Series C round, when Uber had a mere $306 million in backing. As of yesterday, when CEO Travis Kalanick announced his departure, Uber with Callinicos had raised an additional $4 billion in capital and $1.6 billion in debt financing, a total of $5.6 billion in cash to achieve a $40+ billion valuation. Uber is widely expected to make an initial public offering this year. Callinicos remains an advisor to the company.

If you are not already dialing Callinicos to see what he is doing next, stop and think about the magnitude of Uber’s growth under his financial guidance. Facebook, by contrast, raised only $2.4 billion prior to its IPO, less than half the amount raised by Uber during the last 18 months (Callinicos joined Sept. 9, 2013). Kalinick wrote on his blog at the time that “Uber has enormous opportunities ahead.” Kalinick is reported to have told employees in email that “Brent has done a wonderful job here at Uber.”

“He will be a legend among startup CFOs,” Erik Gordon, professor at the University of Michigan’s Ross School of Business, told The Wall Street Journal. We will watch with interest for Callinicos’ next business move.

Steve Case Talks of “Third-Wave Disruption” at SXSW

AOL founder Steve Case, speaking at the South By Southwest Conference in Austin Texas this weekend, said the Internet is poised for a “third-wave distuption [that will] account for more than half our economy.” This is the Local On-Demand Economy, which will drive the innovations of the past quarter century at the enterprise level into the local and emerging economies.

According to the Chicago Tribune, Case described the third wave as an environment in which [paraphrasing Case] “Companies that expect to thrive will need to partner with embedded stakeholders such as teachers, doctors and large corporations as well as with government agencies.” He responded to critics of the idea saying, “Engagement with governments may sound unappealing to many of you, but the entrepreneurs who figure out how to operate in this new framework have the potential to reap amazing rewards in this next wave.”

Case described the disruption at the local level as the result of improved access to capital from crowdsourcing, an increasing recognition of the role of strategic partnerships in new and existing companies, the rise of “impact” investing for social good and, the emergence of many more centers of digital innovation beyond Silicon Valley. We see the same forces at work. In particular, the role of strategic partnering will be critical. BIA/Kelsey believes partnering will be carried out through digital channels using APIs (application programming interfaces) that allow businesses to blend and customize their products and services with many partners to deliver exactly what a consumer wants, when they want it, at home, the workplace or in the community.

Case’s point about government is well taken. The disruption of local economics will have vast consequences for local, state and federal tax bases. For one thing, more workers will likely be using incorporation to extend their ability to supply and deliver services locally, changing the tax base in novel ways. Every government service, from street maintenance and education to police protection will be impacted by potentially lower short-term government revenue as 1099 economics takes hold. Health care may become an essential enabling service to ensure social mobility as workers abandon the lifelong career. The need for ongoing adult education will become an industry unto itself, augmenting reduced public spending or, perhaps, a greater focus by government on early-life public education.

“The government spends more on health and learning than anybody,” Case told the SXSW audience. “So successful third-wave entrepreneurs will need to engage more, not only with governments as their principal regulator, but also as their potentially largest customer.” We also anticipate that in the “1099 Economy” demand-side aggregators such as Uber, TaskRabbit and others will find that helping their contract employees engage with their community will be a key to independent employee retention.

Case is currently chairman and CEO of Revolution LLC, a Washington-based venture firm with a broad portfolio in consumer-facing startups.

Stay tuned for much more on LODE in the coming weeks.

The post Local On-Demand Economy: Bi-weekly News Briefs appeared first on BIA/Kelsey - Local Media Watch.

It’s hard work distilling 20,000 people, hundreds of sessions, droves of start-ups, seemingly endless parties and even a Mike Tyson cameo into a cliffs notes recap of SxSW Interactive. Not that anyone is shedding any tears for me. America loves lists (or so I’ve heard), so here are “the big ideas” that have my brain buzzing post-Austin.

1) The Check-In Gets an Ego Check: Kudos to Gowalla’s Josh Williams, cofounder of a company that has leveraged check-in fascination to fund and fertilize the business, for reminding the location-based services space that check-ins were originally designed as means to greater value, not as ends unto themselves. When misconstrued, badges, passport stamps and other social rewards that fail to tell a more compelling value story (whether tangible, personal, philanthropic or other) can become a hindrance rather than a facilitator. “We’re drinking our own Kool-Aid,” Williams admonished.

So what does “getting real” really mean? Not a lot of concrete nuggets were offered. Perhaps it’s being able to tell a larger, more colorful personal and social narrative around places you’ve been or communities you’ve interacted with (the Gowalla idea). Maybe it’s about social recommendations that blend local places with friends’ activity (hello Foursquare). Maybe it’s gamification for larger social good (see Seth Priebatsch’s grand plan to use game mechanics to fix education). Or maybe its something else. But it’s not check-ins … not long-term, at least.

2) So, This Whole Deal-a-Day Thing May Be MUCH Bigger Than We Thought: Actually, many of my colleagues have viewed group buying as a local commerce game changer since its earliest days. But the deals session at SxSW, particularly a slide from Yipit’s Jim Moran, brought this burgeoning ecosystem into sharper relief.

I’m well aware of the critical places that deals sites, white-label providers, verticals and aggregators hold and can feel the rising demand for data to justify the opportunity for publishers. Exchanges were a natural as the space grew. But there is also real potential in merchant services, consumer services and merchant agencies. These are largely new doors to be unlocked. There may be more opportunity in b-to-b deals as well, where promising rollouts are limited (Business Insiders’ Pipeline, for one).

The next nuts to crack: better merchant care to boost customer retention, self serve that’s truly accessible (Groupon’s merchant center hasn’t exactly caught fire) and, for publishers, tighter integration of deals into brand content (not as blunt ad units).

3) Won’t You Be My Neighbor?: Maybe, if I knew where the neighborhood started and stopped. Much of the future of the mobile-social intersection hinges on definitions of, and ability to utilize, location. Sounds mushy, huh?

To paraphrase NeighborGoods CEO Micki Krimmel, technology has been great for building affinity and interest groups, but can it be equally useful in fostering local connections? Foursquare and others are beginning down this path with their location + social recommendation engine, but the layer that NabeWise CEO Ann Baldinucci says is missing is the one that “sits above property listings and addresses to tell you what a community or neighborhood is all about.” That is the context wrapper that is largely absent.

Joe Stump from SimpleGeo noted that the demand for neighborhood-level data is fervent, but limited in its application if no social context is connected to it.

4) Twitter Saves Linear TV!: Well, maybe not singularly save it, but it certainly can provide a boost. Chloe Sladden, Twitter’s Director of Media Partnerships, shared anecdotal evidence that integrating second screen activity with live, linear event programming can enhance the real-time appeal of a show (i.e., DVR can’t replicate the dynamic social experience users have when connecting over a live show).

Interestingly, Gavin Purcell, the supervising producer of “Late Night with Jimmy Fallon,” foresees a new job title growing around second screen experiences. Essentially, this person will extend the role of the community manager cross-platform to connect big screen and second screen interaction.

Many local broadcasters are already effectively utilizing Twitter in their newscasts by soliciting audience questions and surfacing story ideas. Now, can they extend the experience to a second screen to create more dynamic conversation?

The post SxSW Wrap-Up: ‘The Big Ideas’ appeared first on BIA/Kelsey - Local Media Watch.

Last year, a deal-a-day panel at SxSW Interactive might have been relegated to a satellite campus (read: off-the-beaten-path Austin hotel). Two years ago, it may not have existed at all. But in 2011, group buying is a $1.2 billion market (according to us), and attendees packed a convention center ballroom to explore how the deals ecosystem would evolve next.

Much of the business interest in group buying gathers around the inviting notion that barriers to entry are virtually nonexistent. While that may be true for product launch, growth and sustenance are another story. Yipit cofounder Jim Moran framed it this way: “The barriers to scale are high, and that increases the virtuous cycle among the large players.” That’s exactly why some consolidation among destination sites is both necessary and inevitable.

A profitable deals concept can be cultivated, but not capriciously. Jonty Kelt, CEO of white-label Group Commerce, advised the audience that deals must be positioned as an extension of brand content. Treating deals as blunt ad units can disrupt brand consistency and dilute customer receptiveness.

DailyCandy, the trendy, female-focused urban newsletter, is an instructive case in how to stitch a deals offering with the brand fabric. Across its 12 metro properties, DailyCandy Deals has enlisted more than 3 million subscribers. GM Tricia Han credits an established brand relationship with its audience. “We have 10 years of experience in curating local businesses and experiences. People trust us.”

Interestingly, Moran pointed out that Han is a product manager rather than a sales executive. He then noted that this is true for many of the biggest publisher success stories (Travelzoo, Thrillist, The San Diego Union-Tribune).

Where deals companies have caught the most grief is in merchant care, with Groupon, LivingSocial, et al, fighting doubts about their ability to grow into customer retention channels that establish them as long-term SMB partners. LivingSocial cofounder Aaron Batalion refuted that notion. “We’re hiring people to help the merchant, to even teach them about their own business. We want to learn about their average ticket price and receipt value” so that the right deal is created.

Moran showed perhaps the most interesting slide, a visual representation of the numerous layers that are now stacking onto the original deals sites. The result is a more complicated, but potentially opportunity-rich ecosystem.

Beyond destination sites, white-label providers, publishers, vertical sites and aggregators, Moran also highlighted merchant services (Genbook, SinglePlatform, Closely), consumer services (CityPockets) and emerging bid-based offer exchanges (Adility’s OffersDB). In addition to aggregation, Yipit also runs a healthy data business. In other words: it’s a much bigger playground than just Groupon and LivingSocial, with diverse opportunities to participate.

The post SxSW Interactive: Evolutions in Deal-a-Day Are Just Beginning appeared first on BIA/Kelsey - Local Media Watch.

In the “Field of Dreams” “if you build it, they will come” spirit, when Marissa Mayer takes the stage, thousands are sure to follow. Google’s VP devoted much of her keynote at SxSW Interactive to evolutions in Google’s mobile mapping products (Maps Navigation, route-around traffic and Latitude, among others).

Mobile mapping shares close synergy in the product suite with Google’s aggressive advances into local business and social channels through Places and Hotpot, and Mayer came armed with data aplenty to support progress in both. Among the highlights:

– 6 million Place pages have now been claimed by business owners.
– 20 percent of desktop search is local (a fact we already know). That share spikes to 40 percent on mobile, underscoring Google’s Maps-Places-Hotpot reviews marriage.
– Hotpot now sees more than 1 million ratings/recommendations each month and has 3 million total user submissions.

We had heard that Hotpot was catching fire quickly, but consider that number: 3 million is already one-fifth of Yelp’s 15 million reviews, and Yelp has a six-year head start (Hotpot debuted last November).

However, Mayer noted that recommendations only take a consumer so far…luring them in the door, but then what? The next step for business owners is cultivating a sustained consumer relationship. This is where “loyalty offers that cause me to come back and spend more and become a repeat customer” enter the picture through Latitude, which is testing rewards-based check-ins here in Austin this week. The problems that Mayer and team are trying to solve with check-ins are “what do I get?” and “how can it save me money?”

Speaking of problems, Mayer acknowledged that while all the mobile innovation is exciting, Google realizes that it has “too many features, and we need to condense them into products.” In other words, simplicity is the objective, both for users and especially for small businesses. This is expressly why the company has released Tags and Boost (three-click AdWords campaign generation) through Places, and has deployed SMB sales forces to test direct selling in Austin and Portland.

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If you’ve been reading TechCrunch this week, you’ll know (or be annoyed by repeated claims) that this year’s SXSW conference will be all about location-based mobile apps. They’ve dubbed it the “location wars.”

Everyone is doing and thinking about location targeting and mobile. Twitter has been doing it for months with its geolocation API and Friday went live with automatic location tagging (opt-in) on its own domain. Loopt and others in this space have been doing it for years, while Facebook and Google loom quietly.

Meanwhile, usage skyrockets. Foursquare has 500,000 users and had its biggest day yesterday with more than 250,000 check-ins. Anecdotically, I went from being the only one of my friends using Foursquare three months ago, to most of my extended social circle now using it (and fruitlessly competing for my mayorships — yes you, Jen).

But the interesting part is how mobile location apps have evolved. Based on privacy and other issues, the check-in has replaced pervasive location tracking as the catalyst for communication. It’s a clever form of opt in. Realizing this, other leaders in the mobile local space such as Loopt and Yelp have integrated check-ins in the past few months.

For the local space, this is relevant because check-ins revolve in some way around physical places — often a business — rather than a meaningless lat/long reading. The next step, of course, is monetization. How do you create a lead out of someone raising his or her hand and saying, “Here’s where I am, and (by implication) here’s what I’m interested in?”

Foursquare has begun to turn check-ins into leads, as have MyTown and Brightkite. And more check-in services continue to come out of the woodwork (see Causeworld). Many will die in an inevitable shakeout, but the overall trend is here to stay. More importantly, this will be the basis for new monetization structures that take form in the coming months.

Of course, none of this is terribly new; we and other local analysts have been eyeing it for some time. But it’s reaching mainstream awareness (Foursquare’s TV ads don’t hurt). Over the next 10 days, SXSW will cause a bump in usage that will bring it even closer to the mainstream — or closer to the questionable $12.7 billion LBS market that Juniper Research predicts for 2014.

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