Elana Fine, managing director of the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business, participated in an online chat with readers recently, joined by Paul Capriolo, chief executive of a start-up called Social Growth. Capriolo’s company is developing a browser application known as Social Kredits, whick will allow users to earn virtual currency by shopping online at participating merchant partners. Here’s an excerpt of their chat, edited for grammar, length and clarity.
Q.Paul, how exactly does Social Kredits work, and how would the currency be redeemed on Facebook? Is this like a poor man’s bitcoin? Is virtual currency the next bubble?
Paul Capriolo: Social Kredits at its core is very similar to a rewards program that you might have as part of your credit card. As you make purchases through any of our 7,500-plus advertising partners, you earn Kredits that can be redeemed for Facebook “money” and deposited directly into your Facebook account.
Bitcoin is an interesting comparison to Social Kredits and other more traditional programs. The main difference is that while bitcoins are also a form of virtual currency, bitcoin operates like cash in the sense that it is not platform dependant and is extremely liquid. With Social Kredits and other reward programs, you can redeem on things within the specific ecosystem (games, services, gifts, etc.) It’s like comparing a dollar bill to a $1 gift card.
Q.I have been focusing on the farmer’s/artisan market network to test out customer interest in my jewelry. I understand that I have steep competition with jewelry since everyone seems to be wanting part of the Pinterest/Etsy craze. When I’m selling at markets, I always get compliments ranging from how interesting my pieces are to how professional and manufactured they look. However, my sales are low. I try to keep my prices reasonable — between $5-$15. What should I be focusing on in order to increase my sales since the feedback is all positive?
Capriolo: Are your sales low because the venues are small or are you expecting more sales based on what you see other vendors at these markets bringing in? If your jewelry is getting good feedback locally, I’d definitely consider sharing it with a broader audience online and see if the feedback remains positive on a larger scale. You mentioned Pinterest and Etsy — those are great places to explore growing into. It’s so cheap and easy to set up a simple storefront or put your products on various online marketplaces that it might be worth just putting up a couple of your more popular pieces and gauging the response — and if your local tastes in jewelry are shared nationally.
Q.I am in the process of developing a piece of technology that will revolutionize the way people workout. I want to start promoting the product and build a buzz before our launch date. What is stopping someone from stealing my idea and launching it first? Is there anything I should look out for?
Capriolo: Congrats on your pending launch. Do you have anything you think is patentable? Initially, I had the same concerns with our business. Over time, I became less and less concerned as I realized that other companies are far too busy dealing with their own products and problems to worry about. It sounds like you’ll have a first-mover advantage, too, so as long as you’re diligent you can evolve your product while others play catch-up.
Elana Fine : In reality there isn’t anything stopping them, but that rarely happens. Intellectual property is important, but what you do with that IP will dictate your success. In talking to potential customers, you can certainly discuss the value you will bring rather than your secret sauce of how you are doing it. I wouldn’t focus so much on building buzz but on verifying that you are building something that people want to buy. Sometimes early buzz hurts you if your product isn’t ready for prime time.
Q.We just launched a tech start-up and my team is wondering if we should stay in the D.C. area or move to the more active tech hot spots such as San Francisco, New York or Boston. We feel like funding and technical talent is more abundant in those cities. What is your viewpoint?
Fine: Although I might be biased that this area is a great place to be starting a company, I do think that any business needs to think about what resources they will need to grow. Certain areas of the country have skill sets, expertise, investors, labs, etc. for specific sectors. Consumer Internet is harder in D.C. — but education, health care, cybersecurity, even gaming are no brainers. Not only do we have the experts in many sectors, we also have one of the largest customers (federal government, when open) and one of the most educated populations. Like anything, assess what you need and the location/resources that will match those needs.
Capriolo: For us, being in Columbia, we’re a regionally unique enough business to cut through the clutter in terms of both funding and hiring. In San Francisco or New York, sometimes you’re a small fish in a big pond and it can feel like everyone has a start-up. Where we are, we can hire from two major cities (Baltimore and D.C.) and there is a ton of technical talent in this area from the University of Maryland and other colleges.