Late last month, I caught up with Alan Borsari, Co-Founder & CTF at Paypersocial, an affiliation network which engages social network users and transforms them to influencers, dividing with them the money advertisers pay, in exchange for their sharing and endorsement of communication, advertising, promotion and branding campaigns via the platform.
During our interview, Alan talks about his entrepreneurial journey which includes working in Italy, United Kingdom, Ireland, the Netherlands, USA, and Russia. He also talks about how he initially got into business, getting involved in Paypersocial, funding, getting traction, growing the business, advices for entrepreneurs and more.
Hi Alan, Thanks for doing this. How are you doing today?
Hi Joseph, what you are doing is remarkably useful for lots of young aspiring entrepreneurs. And I'm feeling great. I hope I could help your readers by sharing some of my experience in this interview!
Thanks Alan that means a lot. I'm sure your story will be very useful
Can you give us some background information about yourself?
I am a very lucky 41-year old, Italian, married with a loving wife, two great kids, full of hope for the future and passionate about what I do. All of this just because I met fantastic people during my life and did not ignore their teachings and the example they gave me. I studied accounting, computer programming, business, economics and finance from the age of 15 to my mid-thirties. Some of this I did it while being outside of my country: an MSc in Economics gained in London, and a second MSc in Management Research while living in the Netherlands. I worked as an employee for some SME’s and for quoted NASDAQ and NYSE Corporations in Italy, United Kingdom, Ireland, the Netherlands, USA, and Russia. From junior to more senior positions my role largely spanned from business analysis and planning, to strategic marketing and communication, to financial monitoring and management, to management consulting.
I soon realised this mixture of competences is just what an entrepreneur needs: finding emerging structures in chaotic, multi-subject, often-unknown territories in order to create some remarkable product or service everybody could be in need of.
Tell me how you initially got into business?
I guess I could define myself a born entrepreneur. Just because that’s what I did since I was born. Yeah, really. My parents were and still are entrepreneurs. With a passion for doing things still untamed after all these years.
Since I was a kid, pure study bored me to death. But not the learning bit: at school I rather enjoyed lectures and after school practice. So while I was studying I constantly kept working: at my parents’ furniture workshop, as an independent programmer, as a consultant, as a manager, as a business director.
Creating businesses, launching new products, markets, and IT system implementations has accompanied me in my entire career.
So it was probably as a natural consequence that, in addition to start my own efforts, I started helping less experienced entrepreneurs facing the same endeavours. I enjoy seeing new businesses being born, blossoming. That is how I got to be a small business angel in one of the toughest countries to be in: my beloved Italy. It is performing this function that I got involved in Paypersocial.
How did the idea for Paypersocial come about?
Paypersocial is not my idea, in fact. The main entrepreneur of Paypersocial, Gabriele Taviani, contacted me on LinkedIn describing an idea for an innovative business leveraging the power of Social Networks. It was September 2010 and at that time I used Social Networks very little and as a means to understand new market behaviours… We did not know each other, but it got my attention. Gabriele was in fact opening up new possibilities for an established business: the massive digital marketing and advertising mammoth.
Gabriele came with a 15-year experience in all that is Internet: eCommerce websites, SEO, promotion, affiliation networks. The idea he proposed was simple and appealing: using an established, simple, well-known business model (Platform for Affiliation Marketing) on a different market space (Social networks rather than blogs). After a few months of investigation we came up with a crystalized form of business plan. Not a complete plan, but a version good enough to be financed.
Tell me about the early days, what was the hardest part of starting the business?
I have to admit we are really a different kind of start-up, driven by clearly known business needs, rather then by a group of smart programmers (which we found later!)… So our stories are somehow unusual and may not be very exciting! Also, we are not first-time entrepreneurs and I personally have a family waiting for me home: so forget wild nights spent partying until dawn!
Personally I believe starting a business is very simple, especially in the UK where bureaucracy is really minimal: have an idea, create a legal container for it, engage some people, find a small place where to aggregate them, pour in a little money, you have started!
On a more serious note, we spent quite some time getting to know each other, building a base for trust, sharing a common view of what the business would look like, in a two words: team-building. But again we did not know each other…
The same great deal of effort, in several more occasions, was necessary to integrate new people who joined the team, or to remove some people from it, when the business recipe did not prove effective… As the theory goes, it’s all about people. No exception here.
What is Paypersocial? And what are you trying to solve with it?
Paypersocial is a platform where Advertisers (companies that want to communicate on Social Networks) can upload their Ads knowing that Publishers (people with social network accounts) will endorse their campaigns if they like them and feel close to them and, in the interest of friends and fans, will share on social networks’ walls and pages.
For that exchange to be fair, the Advertiser will pay upon performance of its campaigns (click, actions, shares, likes, etc), the Publisher will get most of what Advertisers pay, and Paypersocial will retain the remaining part.
This model is well known on the Internet but usually only accessible to professional marketers or players (e.g. Google’s AdSense).
Consider now a couple of facts: people are spending a great deal of time on social networks, for one reason or the other. The second fact relates to the sharing: the viral sharing of contents benefits someone. Is that someone the people who took part in building the success of that campaign? Are they involuntarily creating value for someone else? Let’s consider, for example, when I share a video from YouTube. I post it to my Facebook wall and generate a handful of video clicks. I’ve become a Publisher.
Then, I share it on a Twitter account with a few thousands followers, using a groovy hash tag and I generate a few thousands views of the video…
So the implied question is: would it be convenient to have a way to reap some of the benefits I contribute creating while spending a lot of time on Social Networks? We think Paypersocial allows just that in an open, transparent, democratic way.
How have you been able to fund it?
Funding is a very important activity that start-ups are busy with. If people are the engine of business success, finances are its fuel.
Of course, you need the right fuel at the right time: a seed company can run on scrap wood and alcohol and having lots of jet fuel could prove a disaster… The opposite would apply to a company experimenting quick and organic growth.
We were lucky to have some resources ourselves but other angels came to help us out when we most needed their support. We were able to collect a total of $266,000 in three different seed rounds. It was difficult, nerve wracking, yet a continuous confirmation people believed in the project and appreciated the intermediate results we were able to deliver.
What sorts of advice do you have for entrepreneurs looking to raise money for their start-ups?
Of course the usual advice just tested and re-tested as we worked on Paypersocial. Can I make a long, boring list?
Here it is. (1) Decrease the value of the business idea and increase the contribution of the people working on it. (2) Communicate clearly to the investors a simple business model (as simple as possible) they can hardly criticize. (3) Do not underestimate the efforts to get traction and produce some revenues. Reflect that awareness when you create your estimates and forecasts. All this needs to happen before the meetings with the investors. Yet, don’t wait to have the “investor’s package” ready, start earlier to get in touch with interested parties, (4) spread information on the Internet so that your start-up appears on the map already. Do (5) participate to events and competitions open to start-ups. Don’t get discouraged and (6) learn as much as you can from all of your contacts. And remember: it is not easy.
About the first few months, how excited were you, tell us about how those months felt, what happened?
As I said, we are not the usual start-up. Also, we have started many businesses up. That is not to say that we grew to be cold-blooded, heartless, business people. Quite the opposite! With Paypersocial we were lucky enough to reach very early revenue-generating status. Even having seen this happening before, it was such a splendid feeling that we threw a (very inexpensive) party a few days after we saw money on the bank account! Such a sense of accomplishment!
How did you initially get traction?
It just happened that publishers (the Facebook users sharing our campaigns) who registered with Paypersocial started publishing and asking their Facebook friends to generate some clicks on their shared Ads. Although this is a moderate form of cheating tolerated by all affiliation platforms, we discovered at a later stage, it made lots of users register with us in order to check the system out. Then, we started the usual blood and tears activities of all digital start-ups: we started managing all our users on a one-to-one basis. At a point we had 10 University trainees taking care of thousands of relationships.
They spent a great deal of time explaining how the system worked and how to profit the most from it. That built lasting relationships with our most successful Publishers. In turn, the Publishers started producing large number of clicks for our Advertisers, that originated revenues we shared with the Publishers who originated them. That flow of revenues allowed us to invest more in marketing and technology and reach a point of readiness for further growth.
What are the most crucial things that you have done to grow your business?
Of course the whole business growth process is complex and difficult to separate in its constituent parts. Yet, I would certainly consider the start of our marketing investment for Paypersocial the most crucial strategic choice we made. After that, we saw numbers outgrow our forecasts for the period. Of course, all digital businesses need a constant investment in marketing just to float over Internet information noise. That holds true for Paypersocial too. Obviously, we experienced a certain time lag between the moment we initiated the process and the time we measured the results. So, we can prove the sooner digital businesses start marketing themselves, the earlier the expected return of those investments materialise.
What would you say has been the highlight of your entrepreneurial journey so far?
Paypersocial delivers content on Facebook via its Publishers who decide whether or not to share what they think their friends and fans will like. This concept has always been clear to the founders. But it wasn’t for Facebook! Perhaps the most surprising event we lived at Paypersocial was the receipt of Facebook invitation to meet and discuss a partnership program. After months of reciprocal misunderstanding… It has been a memorable milestone successfully achieved!
What should we be expecting from yourself and the Paypersocial team for 2013?
Paypersocial is a very innovative yet challenging business idea. Its revolutionary potential makes it an interesting business for many involved parties. Not only for social network companies, but even for more traditional advertising businesses… From the technological perspective, a new Twitter module is under development, as is a module to leverage a one-layer personal network. From a financial standpoint, I believe more revenues will continue to add to the monthly figures, and refinancing for the next growth stage will be attained in 2013. Fingers crossed!
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
There is a moment in a start-up lifetime when time is not the scarcest of resources. But the paradise is quickly gone, so take care of using this initial time wisely. The first advice is that it is important to design the spirit (i.e. the value system) of your business.
This cannot easily change later, and everybody in your team must share it. It avoids a lot of troubles and misunderstanding. Since time must be wisely used, try not to fall for the perfect business plan idea: even if it existed nobody would read it! Rather, spend a lot of time discussing with everyone genuinely interested in helping out.
The final bit (but the largest share!) of time should be spent in selecting your team carefully. Little differences in point of view will become large differences of strategy. Small misunderstandings at theoretical level transform into huge fights over practical choices to be (urgently) made. Sometimes the entrepreneur’s guts can be a powerful (and efficient) headhunting tool!