Technology Trends for 2011

In the first year of the new decade, the global media paradigm has radically changed and 2011 promises to be a dynamic affair filled with fascinating new trends in the media and technology sector.

Throughout history, entrepreneurs have always been at the forefront of our economic recoveries and subsequent expansions.  As we continue through a period of stagnant growth, the key to revitalizing our economy is embedded in our entrepreneurs.

Advertising is Evolving

The preeminence of social media has a naturally selective effect, compelling advertisers to innovate new strategies to reach their target markets. As the Don Draper’s of America attempt to capture markets across increasing social media channels, advertisers must arrange their business models to penetrate a new kind of market, where the social optimization of websites and integration of all marketing protocols have coalesced into the industry standard.  Furthermore, in 2011, media owners and e-commerce sites will negotiate content agreements based on revenue share, as opposed to more conventional and outdated advertising contracts and monetization of content will become even more ubiquitous.

Cloud Computing Breaks Out of the IT Shell

Large enterprises will become more reliant on Cloud computing in 2011.   Cloud computing is Internet-based computer use predicated on shared servers supplying resources, software, and data to computer and mobile devices on demand.   In the next four quarters, the tech industry will see increased market demand and application of Service Level Agreements for guaranteed reliability and enhanced automation and adaptability.  Cloud computing is primed to break out of its raw IT shell, allowing people to solve business domain problems more effectively.

Location, Location, Location

Last year, the web experienced the unprecedented rise of location-based apps, which allow users to search for businesses within their area, check in to any business, and share their check-in information with their social networks.  Services like Check-In, Locate, and Review will continue to flourish with their mobile-centered business models and will probably integrate more consumer incentives to attract more users in the long-term.

Size Matters… But So Does Unique Traffic!

Web site testing and measurement will also assume prominent roles in 2011.  Web entrepreneurs must pay more attention to their analytics, as they try to key in on their most profitable and strategic target markets.  In order to optimize their performance, websites must set clear market objectives and determine their key performance indicators in order to establish a viable plan for the allocation of investments and resources.

Sharing & E-Commerce

Social sharing and e-commerce are two other web media trends, which will continue to evolve and grow in 2011.  The ubiquity of social media compels web entrepreneurs to effectively integrate ‘shareability’ into their web design models. Website visitors should have the ability to use their browser plug-ins or widgets like Addthis, Sharethis, Facebook  Like, Twitter’s Tweet button, or Linkedin Share, to broadcast summaries of content across relevant social media platforms.  Meanwhile, e-commerce will become more popular across mobile device applications, while merchants discover new ways to promote their brands and their products across social media channels.

The Return of the Start-Up

In 2011, new tech and media companies will emerge at an astounding speed.  While, this phenomenon doesn’t mean that all companies will survive, the implications of web success stories like Tumblr, which has amassed 11 million users in just three years, suggests that a good company with an innovative business model can grow very rapidly.  Quest Visual and Groupon, the latter now being valued at $6 billion by some estimates, reinforce the notion that intelligent businesses have the potential to grow at unprecedented rates.

Venture Catalysts

With the emergence of innumerable start-ups, 2011 will be a pivotal year for venture capital and creative entrepreneurial fundraising.  While the practice of angel investment will stay active, business will rely more on VC firms and third- party companies for financing.  This trend could possibly result in the mitigation of the investment technology firms have acquired in recent years, however, significant improvement in the markets for IPO’s and mergers and acquisitions should bode well for venture capitalists, considering those are the two primary avenues for venture capital’s sustainability.  Additionally, a Venture Capital Association study discovered that 420 companies were acquired in 2010, a record number in the realm of mergers and acquisitions.  Collectively, the market data suggests that this year will be a dynamic one for VC firms and tech entrepreneurs around the world.

Facebook’s Social Commerce Monetization Boom!

While 2010 was the social media giant’s most difficult year to date, 2011 promises to be a smoother ride for the site, which has persevered and grown amidst well documented, user privacy backlash and criticism.  This year, Facebook monetization will explode, as deals with partners like Paypal will enable them to take a percentage of all transactions.  And with the advent of social media-guided e-commerce, expect more retail products to sell on the site, which will generate billions in revenue for the social media titan.

Mobile-Media Nucleus

We exist in an era where the mobile device has become the nucleus of social existence.  Web sites will have to serve cross-platform mobile device purposes more effectively, implementing more CSS query and HTML5 technology. Mobile money applications will continue to evolve and attract new users, as the Haiti earthquake disaster highlighted the philanthropic potential of sending text message money donations, and Pay-Pal recently developed system, whereby individuals can transfer funds by literally ‘bumping’ phones.

Changes in Partnership and Sponsorship Agreements

Brands will do more than just advertise; they will integrate and embed themselves into their sponsored content as they try to make themselves more human for an increasingly social media-directed consumer market.  Moreover, brands will make more strategic long-term deals across the board.

Conclusion

In closing, 2011 will be a year, which redefines the industry.  Facebook will start generating astronomical levels of revenue, monetization of web content will grow at unprecedented rates, social commerce will revolutionize the institution and infrastructure of retail shopping, and location-based services and e-commerce will come to dominate the mobile-media industry.  Moreover, websites will incorporate more visually-conscious design models to draw larger markets across cultural and linguistic barriers, while improved web site testing and analytical technology will help entrepreneurs optimize their online brands.  Finally, 2011 will be a scintillating year for venture capital firms, while mergers and acquisitions might exceed the staggering figures of 2010, spelling some exciting and unpredictable implications for tech and media firms around the world.  Overall, 2011 offers a great deal of certainty with regards to the notion that these next four quarters will feature some of the most creative and lucrative developments that the industry has witnessed.

We need more start-ups. A lot more of them. New companies mean new ideas, new approaches, new products and services, and new jobs. What’s more, in the wake of the Wall Street meltdown and the catastrophic oil spill in the Gulf of Mexico, a wave of start-ups could spark a new sense of optimism about what businesses can actually accomplish — something else this country sorely needs.

Things That Matter to an Investor

Financial projections in the business plan

There is no doubt that an effective business plan is needed to successfully raise capital. Included in a business plan should be a financial worksheet which outlines all the various categories of costs that can accrue monthly. By using a financial worksheet, the new business owner can provide lenders and investors three very important financial measures in order to raise capital- the income statement, cash flow statement, and balance sheet. The income statement is probably the most important component of the three to raise capital. It includes a projected cost report, which provides projected revenues and the expected income for the new business owner in the next 3 to 5 years. Providing such financial predictions will enable the new business owner will gain credibility from their financial lenders. It also gives them an assertive edge to raise capital from additional sources.

Professionalism

Whether an entrepreneur decides to raise capital from traditional bank loans or from angel investors, new business owners will first have to impress them with their business plan. New business owners should be aware that despite the possibility of multiple rejections, they must not be discouraged and always keep a positive, professional attitude. If an entrepreneur strongly believes in their project, then they will seek any and all means to raise capital. If an investor or financial lender sees potential in an entrepreneur’s new business ideas, then they will strongly consider the opportunity to enable the new business owner to raise capital and provide funding for their new business endeavor.

Good credit vs. bad credit

Credit rating has become a very significant component when a new business owner decides to raise capital. This policy holds true for every financial lender: the higher the credit score, the lower the interest rates. If a new business owner has bad credit ratings, such as 600 and below, then they will most likely not be able to effectively raise capital since there is a high probability that their loan application will be denied. The entrepreneurs that seek to raise capital for their new business in large amounts and are planning to borrow this money from a bank should try to monitor their credit score and fix their credit history beforehand so that they can get new business loans at favorable rates. There is no doubt that a high credit score is a vital component to raise capital for a new business.

A few years ago, there were several financial institutions and banks with a scoring rank system that automatically determined the new business owner’s interest rates. However, nowadays, there are multiple credit rating agencies that diligently analyze the new business owner’s credit score before granting capital. For a new business to effectively raise capital, the new business owner must have a good credit rating.

Many entrepreneurs will agree that it is not an easy task to raise capital for their new business. The credit score agencies can easily determine the credit ratings of an entrepreneur simply by collecting information on the new business and analyzing the details, such as the borrower’s current income level, payment and debt history, and other important financial facts that may be useful in the process to raise capital. After credit agencies obtain a detailed report on the borrower, this information is sold to loan providing organizations, which further determine the amount of capital to be allocated.  Whether an entrepreneur is seeking funding from a private investor or lending institution, their credit history will be investigated before they are able to raise capital for their new business.

What You Need Before Going to an Investor or Bank

The importance of a business plan

In order to effectively raise capital, every new business idea with marketable potential should always be accompanied by a well-constructed, comprehensive business plan. To create such an extraordinary business plan, new business owners must first organize their thoughts, and then create a documented first draft. New business owners are also encouraged to seek the assistance in proof-reading in order to avoid any errors, which can seriously damage their overall credibility and chance to raise capital. A well-written business plan is the key for new business owners to successfully raise capital.

Many successful entrepreneurs strongly believe that preparing a business plan is similar to writing a resume. The new business owner has to focus on every detail, explain their academic background and credentials, and clarify how their experience could add value to the new business endeavor. In addition to providing several references, the business plan should be constructed in such a way that it leaves potential investors speechless, with no further questions asked. By creating a well-prepared, solid business plan, new business owners will greatly increase their chance to raise capital for their new business endeavor. In addition, their solid business plan will also improve their chance to raise capital throughout the development of their new business.

To further increase one’s chance to raise capital, new business owners are encouraged to seek the help of professional legal consultants or accountants. These professionals serve as a valuable resource to new business owners who want to raise capital since they can provide new business owners with all of the necessary paperwork for their business plan. They can even develop the entire business plan for the new business owner. But before seeking their help, the new business owner must make sure that these professionals are accredited and that they have experience in the field of new business startups. The assistance of accredited, experienced professionals when preparing a business plan will definitely impress investors, increasing the entrepreneur’s chance to effectively raise capital.

Fixed vs. variable expenses

In addition to a solid business plan, new business owners must be able to differentiate between two types of expenses that they will have. These essential startup expenses can be divided into two separate categories: fixed and variable. Once both types of costs are evaluated and a total amount can be predicted. Bankers and investors expect new business owners to know these costs in order to estimate how much capital will be awarded.

Fixed expenses- New business owners need to consider the amount they have to pay for rent, utilities, administrative costs, and insurance costs when they decide to raise capital.

Variable expenses- New business owners also need to take into account inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service for their new business when they decide to raise capital.