The New Economy may be shaking out, but not every new technology venture has been an e-commerce dud. Infrastructure companies continue to be hot properties, as evidenced by
AppStream, which put a dent the technology landscape in May 2000 and continues to broaden its bandwidth as a category leader.
In fact, AppStream's debut offers further proof that PR is still the best strategy for putting unknown technology brands on the map ... even when economic times are tight.
In February 2000, AppStream founder Uri Raz hired the San Francisco PR "incubator" LaunchSquad at the suggestion of the VC firm Draper Fisher Jurveston, which had granted Raz
$6.5 million in initial financing .
Raz and his engineers had a golden egg: they'd developed technology that would speed the delivery of software applications over the Internet by breaking software into pieces and
delivering the most frequently used pieces to individual users on an as-needed basis. The ability to stream software in smaller chunks would make application deployment more
manageable.
"One study of Netscape, for example, found that 95 percent of all Netscape users use only 3 to 5 percent of the application, yet every [employee's] computer had every Netscape
feature loaded on it," says Jason Mandell, LaunchSquad co-founder. "The thinking was, why not deploy only the parts of the application they needed?"
Message Critical
The biggest challenge for the Palo Alto, Calif.-based start-up was nailing down a hard positioning strategy before word one was uttered to analysts or the media.
"Our goal wasn't just to enter the marketplace, but to define a whole new space," says Neal Fink, VP of marketing at AppStream. The team faced the burden of treading a well-
worn path already muddied by pitchmasters touting less-inspiring tech start-ups to analysts and the media. The not-so-new objectives were to tell the company story in a way that
differentiated AppStream from existing competitors, to explain the technology's relevance and to develop relationships with as many reporters and analysts as possible prior to its
launch, thereby stimulating coverage out of the gate.
At the suggestion of one of its VC firms, AppStream applied for - and won - distinction in a special "10 to Watch" feature on new technology companies that Red Herring
was preparing for its May 2000 issue. After learning AppStream had, indeed, been selected as one Red Herring's chosen few - to be unveiled at the Venture 2000 conference in
early May - LaunchSquad set a company launch date of May 1 and backloaded the rest of its buzz-building strategy.
Mandell and fellow LaunchSquad co-founders Jesse O'Dell and Jason Throckmorton pored over tech trades and analyst reports to pinpoint journalists and researchers who were
covering similar technologies and competitors in the marketplace. They media-trained Raz and Fink, and organized face-to-face meetings in early April with more than 30 carefully
cultivated reporters and analysts, including writers at The Wall Street Journal, BusinessWeek, Industry Standard, Upside, Computerworld and 10 research firms (including
Jupiter, Gartner and others).
To keep news from leaking prior to the anticipated launch date, Raz and Fink went into the aforementioned meetings on the condition that the information they shared would remain
embargoed until May 1. This included news about AppStream's first round of VC funding (which, by then, was old news to them, but not to the rest of the world). By the time
AppStream execs met with journalists, they'd cobbled together a tasty selection of news pegs, including:
- The introduction of the company for the first time
- The introduction of breakthrough technology
- The announcement of $8 million in funding
- Analyst references
- Initial customer commitments from companies such as Korea-based LG Telecom
and Computer Associates (which was also an investor) - A heads up about Red Herring's "10 to Watch" feature (which would
inevitably pique the interest of competitive tech magazines).
I Stream, You Stream...
And...? On May 1 (launch date) AppStream was featured in eight stand-alone stories in the trade press, not to mention features in Red Herring and The Wall Street
Journal Interactive edition. Not too shabby for one day of press coverage.
Members of the VC community, in turn, read the coverage and began placing curiosity calls to AppStream. AppStream subsequently raised $35 million in second-round financing -
news that LaunchSquad used, in turn, to pitch an exclusive story that landed in Forbes.com in early September. Among the investors in round two: Sun Microsystems and Intel.
As Forbes' Dan Ackman wrote, "AppStream has attracted plenty of fans in the venture capital community who want a piece of what one VC calls the next 'must-have'
technology."
(AppStream, 650/251-2500; LaunchSquad, 415/625-8555.)
CounterIntuition
Neal Fink, VP of marketing at AppStream, says the fact that LaunchSquad itself was a start-up (the agency was founded in January 2000) created a winning agency/client dynamic.
"I've done marketing for other companies and have worked with major international PR agencies. As a brand new start-up, it's hard to get the attention and the handholding you
need from a bigger firm. The fact that LaunchSquad chose as its niche the opportunity to work with early stage companies [boded well] for us. And they understood our technology
right away, which was critical," he says.
Interestingly, LaunchSquad itself has become somewhat of a media darling in light of its PR successes and unorthodox approaches. The firm is highly selective about when and
where it distributes news and works with only two to four clients at a time, nurturing them onto the tech scene until they become strong enough to be passed off to larger PR firms.
In a September profile, editors at Business 2.0 wrote, "LaunchSquad is to public relations what angel investors are to venture capital."
Launch Statistics
Campaign time frame: February - May 2000 (pre-launch); May 2000 - present
(post-launch)
Budget: $150,000 for first six months (includes agency fees and travel
expenses)
Billing model: Flat fee retainer
Key players @ AppStream: Founder Uri Raz and VP marketing Neal Fink
Key players @ LaunchSquad: Co-founders Jason Mandell, Jesse O'Dell and
Jason Throckmorton - all of whom are under age 30 and previously worked for
Schwartz Communications.
Other LaunchSquad clients: MedChannel, GadgetSpace,
comScore Networks, OneName