As I was riding my bike to work today (like I do most days) down a crowded 4 lane one way street in Boise, i noticed a police car flip its lights on from one of the middle lanes. Respectfully all of the traffic stopped and let the officer maneuver his cruiser across two lanes to the far left lane. Once there the officer turned the lights off and settled back into traffic as if nothing had happened. A few seconds later the cruiser turned left (without using a signal) and headed on its merry way. I was instantly intrigued, amused and slightly angered at the nearly simultaneous abuse of power (using the rollers to change lanes) and hypocrisy (turning without a signal), that this officer had displayed in a matter of 30 seconds.

By making this small decision this officer had more than likely reinforced the stereotype that officers believe themselves to be “above the law”, to the 30 or 40 people who were affected by his actions. I am convinced that he had not thought through this potential consequence when he exercised his power, just like many people don’t when they make decisions. The point is that we all need to be thoughtful about our decisions on a daily basis and ensure that we are only using our power and position when necessary. And when exercising the powers of our position (as a manager, parent, customer service representative, or whatever) to do it with humility and respect for the people it will have a consequence on.

I am proud to announce that Quiznos has selected the Balihoo platform to drive all marketing at a local level. The

marketing department at Quiznos has been looking for an integrated solution to drive demand at the local level and when they found Balihoo it was a perfect fit. The Balihoo platform will provide the 4000+ franchise owners of Quiznos with a simple to use, yet powerful marketing platform to both create and execute campaigns across 14 different media types from Television to Pay Per Click, In-Store to E-mail.

Quiznos is a very forward thinking franchise and has recognized the fact that high quality local marketing is critical to the success of their organization and their franchisees. We are thrilled that they have identified Balihoo as their solution to implementing national quality marketing at the local level.

Bringing Quiznos on to the platform continues our long string of growth, which we have been able to sustain even during these difficult economic times. You can read more about the win here

We made it to the cover of the Sunday NY Times as a featured part of an article about the economy. You can read the story here

We are thrilled to be highlighted as a bright spot not only in the local news, but by a newspaper as prominent as the NY Times.

Stay tuned as more good news about Balihoo will be coming in the next couple of weeks.

I had a long spring weekend filled with beautiful Idaho sunshine and a lot of household chores. My wife Stacie and I went through the entire house and created a long list of things that we would like to fix up over the coming months. The list ranged from the mundane (cleaning out the garage and touch-up painting) to the complicated (refinishing our hardwood porch). However, the single largest project on the list has been a longstanding request from both my wife and kids - build a tree-house.

I consider myself a very handy person and have picked up a great deal of home maintenance skills over the years. However the single most important skill I have acquired is recognizing when I am out of my league, and hiring a professional. I have wasted countless dollars and hours taking on jobs that are over my head, just to end up with a professional correcting my mistakes in the long run. I would have been much better served working on my business, or playing with my kids and hiring a professional in the first place. The job would have been done right and would have cost less money and time.

We see this same issue play out day in and day out in the local marketing arena. Faced with a long laundry list of business “chores”, owners often bite off more than they can chew – especially when it comes to marketing. Owners are rarely marketing “professionals”, yet they tend to take the chore of promoting their business on their own shoulders. They design ads, negotiate media schedules and even star in their own spots. Marketing has become a professional discipline and is becoming increasingly more complicated on a daily basis. New technologies are creating tremendous opportunities for local marketers to reach their target customers, but the options are overwhelming and the technologies can be confusing.
At Balihoo we are dedicated to bringing professional marketing strategy and execution to the local level. For too long this level of sophistication has resided with National marketers only; we are changing that. We work tirelessly on our software and services to ensure that we can deliver a tremendous value to our customers and help them to succeed in all of their marketing objectives.

So by now you must be saying – “it looks like Pete is going to hire someone to build the tree-house”. You’re wrong. I worked in high school and college building homes and decks and feel that I am well qualified to design and build a world class tree-house. However, detailed finish work is not my game, so I am hiring someone to come and refinish the hardwood floor on our porch. In the end knowing where my time will be most effectively spent is a lesson I have learned the hard way, and I am hopeful that more local business owners recognize that their time is best spent running their business and getting help from a professional when it comes to marketing.

I just returned from the International Franchise Association annual conference, which was a tremendous show on all fronts. First off the show was run exceptionally well, which is always helpful to participating companies. However, beyond the logistics of the event and the content that was offered I was particularly struck by how upbeat the attendees were. The attendees were almost all VP level and above and most were franchis”ors” or “zors” as they refer to themselves. Some were Franchises or “zees”, but by in large the conference was focused on the “zors”.

The general sentiment was fairly consistent and can be summed up as “these are challenging times for our company, but we are confident in the platform and are focused on making our franchisees successful - that is the competitive advantage we bring over independents”. I was motivated and inspired by the confidence that these CEO’s and VP’s were bringing to every conversation. They were at the show to find ways to help their franchisees succeed despite the rough economic climate. I think that was one of the reasons that Balihoo had such a GREAT show. We are solving a real problem in the national/local marketing environment and delivering an exceptional solution to businesses that need help today. The companies we spoke with were thrilled to have finally found a single platform that would solve all (or most anyway) of their marketing challenges.

We are very excited about the relationships that we created at the show and are motivated to follow the lead of the “zors” and help the local business owners to gain market share in a down economy.

There is no denying that the global economy is in the tank. There are very few rays of sun poking through the collective doom and gloom that has become the pervasive economic sentiment. Balihoo is in the unique position of actually being one of those rays of sun. We reacted early to the warning signs of a slowing economy and have been rewarded by the general market. Because we were talking to our customers early and often and working with them as partners rather than vendors we have been able to collectively navigate through some choppy waters and are looking forward to a great 2009. If I could pass one piece of advice on to other companies in this very difficult time it would be:

Work with your customers, vendors, employees and partners as if tomorrow will come. Avoid leveraging any situation where you have the upper hand for short term gain, rather extend that hand to your partner so that you can both live to see another day. In the end you will be judged more by how you performed during a down cycle than an up one and karma has a strange way of being an equalizer in the long run.

Go make something good happen.

I have been building businesses in and around software for over 15 years and while I am passionate about the startup world, things can become tiresome after a while. Generally speaking my career has focused on growing companies that have developed enterprise class software that is sold to large organizations in very long complex sales cycles. Recently though Balihoo released its Marketer Edition and I have to say that I am having more fun than I have ever had in my career. The software is so powerful and well designed that it practically sells itself. It has brought a renewed focus and energy to the company. The difference in getting up every day to begin working on something that is fun and successful, vs. something that is laborious and questioned is tremendous and I for one am jumping out of bed and ready to work - it’s a nice feeling.

Have a wonderful Thanksgiving

Franchise Update Magazine, a well-known and explanatory management resource for practitioners who want to learn about effective franchise lead generation strategies and techniques, is currently featuring Balihoo on its website.

Make sure you check out Franchise-Update.com and read ‘Enabling Local Demand Generation’ written by Balihoo’s CEO, Pete Gombert. 

‘Enabling Local Demand Generation’ touches upon the various components and issues that go into cultivating and maintaining a national brand’s or franchise’s image and poses the question: Is your brand’s corporate and local advertising in concert?  If not, why not?

Today, in the Entrepreneurial Edge section of the New York Times they are featuring an article which focuses on Idaho start-ups entitled ‘Start-Ups Give Idaho and Identity Beyond Potatoes’ and happens to highlight Balihoo.

The author James Flanigan did a great job conveying the fact that Idaho isn’t all potatoes and farming but also has several thriving technology and green manufacturing companies. Read it below or directly on the NYT site here.

Start-Ups Give Idaho an Identity Beyond Potatoes

Idaho may be best known for its potatoes — it produces, after all, a third of all the potatoes in the United States. But its economy is increasingly being driven by technology and green manufacturing companies, big and small.

Most of those companies have settled in the Boise Valley, an area of about 600,000 people, where they have received an enthusiastic response from city officials and technological and business assistance from Boise State University.

“Some 70 percent of Idaho’s economy is in high technology,” said Jason Crawforth, founder and chief strategy officer of MobileDataforce, a Boise company with a software system for compiling and transmitting information from handsets in the field to databases in the home office. Mr. Crawforth cited American Electronics Association statistics that show Idaho’s exports to be chiefly in computer chips, parts and equipment, notwithstanding the potato.

Yet it was the potato, in a way, that started Boise on a path to high technology industry. In 1978, the late Jack Simplot, founder of the J.R. Simplot Company, developer of Idaho russet potatoes and of freeze-dried French fries for McDonald’s, invested in a start-up called Micron Technology, a maker of semiconductors.

Micron now has more than 20,000 employees and close to $6 billion in annual revenues. (Micron is not immune to the turmoil in global economic markets. It announced last week that it would lay off more than 3,000 employees in the next two years because of a glut in microchips.)

Idaho farmers have been backing technological start-ups ever since. Gerald R. Thompson, for example, said he raised $2 million from farmers near Boise in 2006 to start a company, Sky Detective. The company combines global positioning satellite technology with cellular phone technology from Qualcomm to produce a device capable of tracking people and cargoes anywhere in the world.

Mr. Thompson, now a retired deputy sheriff in Los Angeles, said he saw a device that added satellite surveillance to a Qualcomm system to monitor the whereabouts of commercial trucks and found that law enforcement agencies were interested in the device as well.

So he went back to Boise, where he had grown up, raised the start-up money and now has a company with 13 employees, as well as contract consultants in the United States and a manufacturing staff in China. “We make the hardware in China,” Mr. Thompson said. “But for software, I recruited engineering students at Boise State University who came up with all sorts of great ideas.”

The Sky Detective product is now being used by law enforcement agencies, and the company is pursuing expansion worldwide and into consumer markets, so users can track children and pets. It is also seeking substantial capital investment, though Mr. Thompson said last week that “it’s a tough time to raise money.” He added: “I am seeing very cautionary demeanors in the venture capital and investment banking community. But they also tell me there is a lot of money on sidelines for the right opportunity.”

MobileDataforce, Mr. Crawforth’s company, also uses cellphone technology for tasks as diverse as enabling workers in the field to give instant estimates and insurance payments for damages to automobiles and homes to keeping track of every metal rod and bolt in the new Bay Bridge under construction between San Francisco and Oakland. The company, Mr. Crawforth said, is awaiting a contract from the Agency for International Development to monitor distribution of AIDS vaccines and medicines in 13 African countries.

And yes, he said, the company has concerns these days about cash flow. “We do the work ahead of time and need to keep payments coming in.” Mr. Crawforth said he and Mobile Dataforce’s three other owners were looking to raise capital.

Another Boise company, the two-year-old Balihoo, uses complex Web-based software to help advertisers find potential audiences in the fragmented media field of social networks, Web sites and phone devices, not to mention newspapers, television and cable channels. “There are unmanageable numbers of Web sites,” said Vincent Martino, who is in charge of technology as Balihoo’s chief operating officer. “But our software can communicate with 100 sites directly and get the advertiser information to make an intelligent, efficient decision.”

Balihoo was founded by Peter Gombert, an entrepreneur who had previously started and sold three software companies. The company, which has 75 employees, is financed by $5.5 million in venture capital raised from Lacuna Gap Capital in Boulder, Colo., and Highway 12 Ventures, a Boise firm.

As to current economic conditions, Mr. Gombert said in an interview last week: “As a venture-backed firm, we do not rely heavily on general credit markets. The bigger concern is whether recession causes companies to reduce marketing and advertising. We have seen some pullback from our advertisers, but nothing significant at this point. The true tale will be told over the next three to six months.”

Boise’s enthusiasm for business encouraged Dr. Carl R. Thornfeldt, a dermatologist for 25 years, to found a company, Episciences Inc., and create nonprescription products to reduce skin inflammation. The company now distributes those products through physicians’ offices. Episciences has 22 employees and, he said, “will expand this year through a venture in Japan.”

Sandhill Industries, which recycles plate glass to make tiles for kitchens and bathrooms, moved to Boise six years ago from Alaska. The company was founded in 1998 by Terri Raudenbush, an engineering graduate of Colorado State University, and her husband, Jim, a forest firefighter for the federal government, with close to $400,000 in grants from the state of Alaska’s Science and Technology Foundation and the federal Environmental Protection Administration. The move to Boise helped her business, Mrs. Raudenbush said, “because we are closer to a supply of plate glass and to customers for shipping.”

In a factory just outside Boise, Mrs. Raudenbush and three employees fuse recycled powdered glass in a low-energy furnace, add pigment for up to 36 colors, cut and bake tiles in kilns, cool them and ship them out. The company was included in a list of green producers on Martha Stewart’s television show two years ago and has distributed its tiles through its Web site from that time. Sandhill Industries has about $500,000 in annual sales, Mrs. Raudenbush said.

“Our big advantage is the fact that we are a ‘green’ producer,” she explained. As to the current economic financial environment, “We have minuscule debt,” she added, with emphasis. “We pay off every month any advances we take from our $10,000 credit line from the bank.”

I am sitting on a plane (as usual) heading out to visit a prospective client and the entire ride has been bumpy. I travel all the time and have become accustomed to small bumps, however, I still get a little fearful when we hit big bumps thirty thousand feet in the air. Startups can be kind of like that. The more time you spend working in one, the more acceptable small ups and down become; you feel them but simply carry on with your work. However, when you hit a big bump fear still takes over. Thousands of venture backed startups hit a REALLY big bump over the past week. The general state of the global economy went haywire and fear was being spread wide and far. It was not enough to turn to any media outlet only to be bombarded by doom and gloom stories, but just when things were looking really ugly Sequoia Capital one of the most venerable venture capital firms in the country held a mandatory meeting of its CEO’s and explicitly announced the end of the good times (more on that meeting can be read here, but be warned that you may need a vomit bag by the time you are done reading this).

Now, I will be the first to admit that the general state of the economy and the unprecedented events of the past few weeks are tremendously scary to a venture backed CEO, however, smart companies will use this opportunity to retrench, get back to good solid business principals and eat the lunch of their competition. If the world follows the advice of Sequoia all of the early stage companies will be cutting to the bone and just entering survival mode. What an opportunity!

I am not advocating ignoring the writing on the wall and carrying on as nothing is happening. Smart companies will do their best to reduce non-essential expenses, focus on their core strategy, and execute flawlessly. In an environment paralyzed by fear it does not take much to move past the competition and grab market share.

While I am not a big fan of Gordon Gecko “greed is good” – I am a big fan of Warren Buffet and one of his principals “be greedy when others are fearful and fearful when others are greedy”. I need to run now, I am going to go close some deals.