DD: Profile of a Potential Pitcher #3 - Zigtag

Too Technical for the Den?

Ok, I need your help. 

You see we met a tremendous entrepeneur in Edmonton, Reg Cheramy, with a great track record of success and an awesome product.  But it is heavy in tech, and may not be that easy to fully grasp on TV.  So the debate is, would you guys, the readers and audience, dig seeing a guy like Reg pitching to the dragons?

Give his interview a read and let me know with your comments and votes!!

Why do you want to be on the Den? I think it's a fantastic opportunity to showcase Canadian  Entrepreneurs. When I watched the videos of the BBC edition of the show it instantly appealed to me. The opportunity to lay it all on the line in a short pitch and then instantly get straight to the negotiations and finally to decide if the Dragons offer works for you, all in single show is really exciting.

Why would you be a good bet for the Dragons to invest in? I'm a passionate serial entrepreneur who's been building businesses since I was 15 years old. I've got a great blend of technical abilities and business skill and the ability to make intricate technologies super easy to use.

In building businesses, I've learned a lot about what I'm good at and also where I need to bring on people to compliment my shortcomings. I'm a creative problem solver with a proven commitment  to do what ever it takes to succeed. I know the market as well as anyone and have a network of relationships that will help Zigtag develop and go to market in the most effective means.

Zigtag is a massive opportunity. The consumer facing side of the company is just the tip of the iceberg. The network effect of each additional user joining Zigtag is staggering.  Our novel viral 'word of mouth' marketing technique is massive and a sure winner. Our revenue model is well thought out and provides considerable cashflow with even the most cautious of projections.

The Dragons should invest in Zigtag if they want to be a part of building the next generation of internet information management and make a ton of money doing it.

Why do you want to bring your product to market? Finding information on the internet is hard. And keeping it found is equally challenging. The way people search, save and share information today is archaic. Zigtag will change the way millions of people use the internet – for the better.

How do you describe your product? Zigtag is comprised of three core pieces:

SEARCH - We all waste way too much time searching for information on the internet.  Search engines today return millions of results yet users only look through the first 10 or 20 before trying another search. It's not the users fault for entering the wrong search terms, it's the technologies for not adapting to the user. Zigtag provides real-time, personal, filtered search results so users find what they are looking instantly. Think of it as a super fast internet search assistant.

SAVE - Once we've found information we want to save, there aren't any really great tools. We can throw a bookmark in our favorites... but that quickly becomes messy and useless and we end up trying to search for it again on our favorite search engine. But what about the content we find on a website. How do we keep notes, clippings or annotations about the information we find on the Internet? Zigtag gives you a web based notebook accessible from any computer to keep track of anything you want to save from recipes to contact information to notes on your next business proposal or school paper.

SHARE - Finally, how do we share information once we've found it? By sending an email? Email is a competent yet limiting collaboration tool. Zigtag offers a powerful collaboration environment enabling users in multiple locations to work together researching, compiling  and preparing information, documents and reports.

How did you come up with the idea? I've been noodling over this idea for quite a while now. Thinking about how information is related and connected. A company called Del.icio.us (acquired by Yahoo for ~$30MM) pioneered the use of tagging to links related bookmarks.  Zigtag (now you know where the tag part of Zigtag comes from) puts the concept of tagging on steroids but with a level of usability and interface that the mass market will use. I'd been working at a solving the problem of managing all the information I wanted to remember. At about 4am one day last year, I woke up with a massive breakthrough, the 'golden key'  that allows Zigtag magic to work.

In closing what message would you like to send to the Dragons? Zigtag is solving a massive problem that we've all experienced – finding and re-finding the information you want to remember. The techniques we've pioneered in solving this problem are a new paradigm and we will be a lead platform in revolutionizing how people search, save and share information. The technology is  developed, we've got thousands of users on a waiting list and a successful alpha test underway.

Comments

[Optimus]

search: going head-to-head with massive, fast-moving incumbents.

saving sites: there's a new social bookmarking site every minute. what's the 'wow' factor here?

golden key: what is it? what's your secret sauce? where's the big barrier to entry? IP? an all-star team?

viral marketing: say 'sure winner' right after 'viral marketing' and any sane investor jumps for the window. this is a crowded area with tough-to-convince early adopters and little evidence of main-street adoption.

money: where's the money in this? i can see who the user is, but not who the customer is. is it ad-driven? is it sold for intranet use? if your revenue model is 'well thought out', let's hear it.

i'd take a pass based on this elevator pitch.

[Reg Cheramy]

Optimus,

Thanks for your comments.

>going head-to-head with massive, fast-moving incumbents.

The good news is, we're not competing with Google or Yahoo, we let users continue using their favorite search engine, we just make it better.

>saving sites: there's a new social bookmarking site every minute. what's the 'wow' factor here?

Optimus, we've got a ton of wow here. Social bookmarking is really a very small part of what our 'save' functionality is all about. That being said, even in that space we have some incredible innovation here that makes far easier to save and retrieve your data.

> golden key: what is it? what's your secret sauce? where's the big barrier to entry? IP? an all-star team?

We've got secret sauce... but it wouldn't be secret if we blogged all about it. Seriously though, we've got some fantastic innovation. We've taken the concept of tagging and put a very unique spin on it that will increase both it's reach and usability. I'd tell you more but then I'd have to put you under NDA (at least it's better than killing you.)

>viral marketing: say 'sure winner' right after 'viral marketing' and any sane investor jumps for the window. this is a crowded area with tough-to-convince early adopters and little evidence of main-street adoption.

Hey, you're welcome to your opinion. Viral (word of mouth) marketing works and we've got a unique take on it. Once you see it in action, I'm certain you'll agree is a sure winner.

> money: where's the money in this? i can see who the user is, but not who the customer is. is it ad-driven? is it sold for intranet use? if your revenue model is 'well thought out', let's hear it.

Optimus, great questions and you're pretty on the mark. We are not a 'web 2.0' company without a business model. I LOVE making money. There are multiple revenue streams. The easiest is of course context sensitive advertising. And if you don't think context sensitive adveriting works, ask the crew at Plenty of Fish who are making 3-4 million/year offering a free dating site with only a couple of employees. We're not banking solely on this as a means for success, additional revenue will come from pro accounts, some creative licensing partnerships and enterprise accounts. You suggestion of Intranet licensing is bang on and we are in early discussions with a major enterprise client.

>i'd take a pass based on this elevator pitch.

Do these comments help? Have I changed your mind at all? There is a LOT more to the Zigtag story than an elevator pitch can deliver.

One challenge we face in this contest is we're pitching multiple audiences in this blog post including:

1) The general public.
2) Saavy Investors that get Web 2.0.
3) Saavy investors that don't get web 2.0.
4) The producers.
5) The dragons.

Normally I'd have a different pitch for each of them. I don't have that luxury, so allowing me to address your comments, may help one or more of those audiences better understand Zigtag. Thanks!

[Jay Fienberg]

This is a really important area of development on the web. No one has yet come up with the magic combination of search / save / share that lets people do what they want in each area.

So, even if you can take the search power of Google and combine it with the save power of Delicious, and make sharing easy across it all--that's going to be interesting.

If you can do more in each of those dimensions--watch out! That could be really amazing.

[optimus]

Hey Reg,

Thanks for responding! Don't put too much stock in my feedback, of course, but here's another round of gut reaction:

I understand you not spilling all the beans in a blog forum with random internerds. But don't pull the "I'd tell you but you'd need to sign an NDA" bit with your VCs. Ideas are a dime a dozen. All that matters is execution, and investors put their money into teams.

Here are the four things I would love to hear in your pitch that would give me a lot more confidence:

1) "We have a team that's done it before." Somewhere in your pitch, you should talk about the people who are going to execute. Show me that your team gives you an unfair advantage. Show me that your team can make it happen.

2) "Here's how the revenue model works." Contextual advertising, fine. Pro users, fine. Because of the free-to-pro conversion rate in the Web 2.0 world (low) and the nature of contextual advertising, you're going to need a fast critical mass of users, which means you really need to tell the Dragons...

3) ... "Here's how the marketing model works." There are no real shortcuts to building community and buzz isn't easy to manufacture. I'm intrigued to hear about your novel viral model. Tell me about it. Or at least (as a proxy confidence-building measure), tell me about who you've got on your team that is going to make it happen.

4) "Here's what your money buys." Talk briefly about how far this round of investment will get you, what's in the cards for future financing, what the exit will entail, and when it'll happen.

[optimus]

Oh. Last thing.

I didn't realize from your first comment that you (apparently) have a product almost ready to go. (Am I reading that right based on the fact that you're in licensing negns already?)

If that's the case... if you have a product ready.. if you have users already.. if you have a customer.. man, customer validation? Sing it loud and proud! I would definately work in mention of how far along this is, PARTICULARLY if you've got proof of concept from some early revenues.

[Kempton]

In this post, I just want to say what an interesting exchange between Reg and Optimus. I think Optimus has posted many interesting and valid questions.

As there is a new blog entry with Reg's audio pitch, I am going to put the rest of my comments under that blog entry.

[Reg Cheramy]

Optimus,

Keep the questions coming.

>I understand you not spilling all the beans in a blog forum with random internerds. But don't pull the "I'd tell you but you'd need to sign an NDA" bit with your VCs. Ideas are a dime a dozen. All that matters is execution, and investors put their money into teams.

Absolutely. VC's don't sign NDA's.

>Here are the four things I would love to hear in your pitch that would give me a lot more confidence:

>1) "We have a team that's done it before." Somewhere in your pitch, you should talk about the people who are going to execute. Show me that your team gives you an unfair advantage. Show me that your team can make it happen.

Absolutely we can execute. The last company I founded had a peak market cap of $42 Million. Ya... it was in the dotcom heyday... but it was one of the few companies to come out of that time period that still exists today and is even mildly profitable. I'd do a ton of things different were I to do it over and learned a lot from that process and that have made me an even better entrepreneur.

> 2) "Here's how the revenue model works." Contextual advertising, fine. Pro users, fine. Because of the free-to-pro conversion rate in the Web 2.0 world (low) and the nature of contextual advertising, you're going to need a fast critical mass of users, which means you really need to tell the Dragons...

We're definitely all over the building community and buzz building. We've got over 2,000 people signed up at http://www.zigtag.com/ to try the product out (which is impressive considering the minor disclosure of WHAT Zigtag is.) One of the buzz building networks is my blog http://web2.0central.com/ which is a blog with a great subscriber base and great daily readership. I've got a great network of connections both here and in the Silicon Valley. I believe we are in a super strong position to build a community and userbase for Zigtag.

> 3) ... "Here's how the marketing model works." There are no real shortcuts to building community and buzz isn't easy to manufacture. I'm intrigued to hear about your novel viral model. Tell me about it. Or at least (as a proxy confidence-building measure), tell me about who you've got on your team that is going to make it happen.

This one I'll have to defer on. It's a significant competitive advantage that I'm going to hold in my bag of tricks.

> 4) "Here's what your money buys." Talk briefly about how far this round of investment will get you, what's in the cards for future financing, what the exit will entail, and when it'll happen.

This is a very small angel round. The goal of this round is to finalize the development, execute some market tests and put more structure around the company (attract advisors and company builders.) This round won't change the bootstrapped nature of the company and we'll go after a Series A round early in 2007 when we've got all the pieces of the puzzle gaining traction (customers,revenue,marketing, advisors,etc..).

>I didn't realize from your first comment that you (apparently) have a product almost ready to go. (Am I reading that right based on the fact that you're in licensing negns already?)

>If that's the case... if you have a product ready.. if you have users already.. if you have a customer.. man, customer validation? Sing it loud and proud! I would definitely work in mention of how far along this is, PARTICULARLY if you've got proof of concept from some early revenues.

Yes. We do have a product that a handful of carefully selected users are using daily. It's changed the way I use the Internet, even in it's current state. We have 2,000 people signed up on our beta list eager to try out the software. The major enterprise customer discussions are early but very promising and I know how long the cycle can be to close those kind of deals, that's why we're getting on this early.

I just re-recorded the pitch I auditioned with (or close to it anyway) to an audio file, which Sean has graciously posted. Go have a listen and see if that answers a few more questions, and hopefully brings up a few more.

There is always more to tell. We're only talking about the tip of the iceburg here. So I welcome any and all questions.

[Jack Newton]

As one of the beta testers of ZigTag, I can attest to the fact that Reg is in fact sitting on something very impressive. In the late few months things have been progressing very rapidly, and I have to say I'm continually impressed at the rate things are progressing.

Deciding how much to disclose in a forum such as this is a very delicate balance, and erring on the side of saying less than more can easily lead to skepticism on the audience's part. I think Reg is striking the right balance here, but I can certainly sympathize with posters like Optimus that would like to satiate their own curiosity as to what the key innovations are.

As someone who knows Reg well and has seen ZigTag in action in-depth, I'll testify to the fact that there is are some awesome ideas in action when you use the system, and it has the potential to truly change the way you manage information and use the Internet.