Adam Hills is a much loved Australian comedian, who is well known through his popular television music quiz show Spicks and Specks, and his long presence on the standup comedy circuit. I’m kicking myself we missed his recent season at the Melbourne Comedy Festival – we had tickets but were unfortunately double-booked and couldn’t make the show so gave the tickets to a friend instead.

Take a look at Adam’s blog during April 2010. One tactic he uses is to take a photo of an audience member during a performance, and Tweet it out asking for caption suggestions – instant feedback to provide more grist for the mill through the show. Adam often singles out audience members and incorporates them into his show, for example, assembling a group on stage representing accents of the world.

Stephen Fry is the geek’s dream comedian, a man who loves technology and can be funny about it as well.

One evening he picked out a guy named Chris Hughes, and “promised to make him as famous as I possibly could by the end of the Festival”. Chris agreed, providing the exercise could be turned into a fundraiser for a particular charity he supports. Read through the blog posts and you’ll see how they raised almost $15,000, and the whole affair culminated in a public strip tease – the film of which is also on Adam’s blog.

It’s a wonderful story, spanning a couple of weeks, various media channels, and attracting significant attention during a period in Melbourne that is saturated with comedians looking for publicity.

Another comedian whose social media adventures I follow, and am desperately jealous of, is Dave Gorman. We saw Googlewhack Adventure in Melbourne when he toured Australia, funniest show I’d seen in years. He’s a regular blogger and Tweeter, and regularly posts terrific photos taken on his travels around the world. I particularly enjoy the ‘Webcam’ and ‘Error’ tabs on his web site.

And a few more I love and follow:

Arj Barker regularly Tweets out great pictures from his shows and on tour locations

Rob Brydon happily responds to fans Tweets

Stephen Fry is the geek’s dream comedian, a man who loves technology and can be funny about it as well. I had fun attending a virtual Twitter party Stephen ran last week. He has a gorgeous web site and blog as well. And even his own iPad application – that’s how geeky he is.

I fell in love with Tim Minchin when I won a DVD of his show at a trivia night fundraiser for Chunky Move dance company. Not a great web site, but he’s a prolific and engaging Tweeter.

These guys know how to work an audience, and Twitter and other social media channels simply provide extensions to that. Sure, they have an ulterior motive, in one way or another this is how they earn their living. They need audiences – whether at their shows, buying DVDs etc – in order to eat. But their tactic is exactly as always recommended for social media. Don’t treat Twitter, Facebook and other channels as a straightforward advertising medium, down which you ram endless sales promotions.

Oh sure, you’ll sell the odd widget, or eBook, or weight loss pill, or blogging success program. But it’s a tenuous and probably shortlived relationship you’ll generate with the customer.

Instead look at how the Dave Gorman’s and Stephen Fry’s of this world create online personae that their potential audiences and customers genuinely enjoy engaging with.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

A copy of David’s speech The Human Face of Technology has been kindly made available to Into the Mountain, courtesy of Tim Roberts and ARTS. The full version is available here.

The 6th Annual NARPACA Ticketing Professionals Conference was organised by Tim Roberts founder of ARTS and for more information on the recent 2010 conference visit www.ticketingprofessionals.com.au

David Eedle enjoys giving speeches on technology, social media and how business can harness the new to reinvigorate and bring new possibilities to what they’re doing. If you would like to book David to speak at your event or conference please contact info@intothemountain.com

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Fiona: Today I’d like to introduce you to a round table on how to value your business or valuing your business. It’s been in the news that Twitter in 2009 took a round of funding on a valuation of $1 billion, and that was at a time when the revenue was considered tiny. In the same year eBay sold Skype for less than they paid for it in 2003, and in Australia towards the end of 2009 Findababysitter.com.au was sold to Fairfax Digital for a reported sum of $3 million. With me today to talk about how to value a business from two sides of the coin – the entrepreneur’s side and then the number crunching accountant’s side. And welcome first to Scott Kilmartin, founder of online and offline urban streetwear and design business, Haul. Welcome Scott.

Scott: Thanks Fiona.

Fiona: Welcome also to Gary Graco, who has spent decades in the number crunching side, and helping businesses to get ready for sale and to put the right kind of valuation on a business. Gary is from Nexia ASR, welcome Gary.

Gary: Thank you Fiona.

Fiona: And David Eedle, who as you know is the author of Niche Content Millionaire, co-founder of ArtsHub, which has achieved an exit, and co-author of Into the Mountain blog. Welcome David.

David: Thanks Fiona.

Fiona: Firstly maybe Gary, I can ask you. That one billion dollar valuation on Twitter that came up last year – you’re someone who’s worked with bricks and mortar businesses that have taken in some cases some time to build asset value. What do you make of that sort of valuation on little revenue.

Gary: It’s probably fair to say that it represents a whole new regime in what people perceive is value and profitability out of the online space. It’s really taken the concept of Google and said, this is now a much wider concept because it’s delivered through a different medium, and the ability to generate, whether it be advertising, subscriptions or whatever…in terms of a valuation principle…who knows…

All: Laughter

How do you go about putting a $ value on your business?

Gary: It’s purely a case of what people’s perceptions are in terms of what they can do with it. And if you go back to the, I’ll call it the early days, the late 1990s, early 2000s, when there was this mad scramble to get into what was an internet space, and there were all sorts of cases as to how we can take this and develop it on the internet, and then suddenly the world’s open to us. And it’s probably fair to say that less than two or three percent of those ideas actually have turned into sustainable businesses. Some of them really really successful, some of them still managing to wash their face. Twitter is – I don’t know, I really don’t know where it’s worth a billion, but if you go back five or six years or seven years, and someone would have said, Google – in fact it’s probably longer than that – Google is going to be a multi-billion dollar organisation, potentially one day outstrip Microsoft. Someone would have, you would have – but – that’s the reality, they’ve managed to find a number of ways of generating revenue out of their business model and Twitter may do the same, but I think that’s the thing, is that everyone’s got an idea of what they can do on Twitter, it’s a matter of what’s going to work and what’s not.

Fiona: OK – Scott, you’re an entrepreneur, your business has been around for ten years, you’re deeply wedded to it – what are you valuing your business at? And how do you value it at the current time?

Scott: It’s a tricky question, it’s one that probably every six months or so – I don’t really calendar – diarize it to go – I’ve got to work this out, but something pops into my head or someone, there’ll be a big sale of some kind and I’ll think, what’s Haul worth right now? And, it is a bit of that kind of, you know, throwing darts into the air and hoping you hit a dartboard, and then, is the magical number that I’m thinking of here even close to it? So, so much of it’s hypothetical – especially because I think the businesses that I have a look at, they’re generally, you see values come up that if a business gets a lot of hype in the first six months to eighteen months or so, people quickly put values on them.

The businesses that are after that, maybe two years, through four or five years – almost go off the radar and become less novel or topical and the valuation issue doesn’t really come up unless there’s potential for a sale or there’s talk of sharks swarming that are cashed up, that want to buy it, so I’m definitely in that latter category of, we’ve been around, the business has been around for a while, it was, you know, a hobby, a sideline, then it became a business business if you like, and we’re still definitely a boutique business, but, yeah, four or five years ago.

And I’m, I guess you mentioned, so emotionally tied in because I’ve been in that long haul – no pun intended – for ten years – I’m probably the last person to ask, because I’m, I’d probably argue with any hardcore number cruncher’s view of it, which would be a relatively low number but obviously as an entrepreneur you’re a very positive person, you see the blue sky, I see the potential of what it could become – and, I guess it is one of those ones where a business like mine right now, where, it’s almost an irrelevant point, I guess for me, because – because I guess I had wasted a bit of headspace and time going, what’s it worth, and you know, you go through the ratios of this times earnings and…it’s a really tough space so we’ll figure it out…so I guess in a really roundabout way I try and avoid the question because one, I’m not looking to sell it, and, as the sole, I guess shareholder, it’s really out of the kind of headspace time for me, so it’s, it’s a tricky one.

I’ve got some friends that have got some businesses that definitely raised some capital and they’re viewing an exit somewhere down the track, so there’s a couple of multiple ways of doing that, and for those guys talking about their businesses it’s a day to day reality, and, critical to what they’re going to do with their future and what’s going to happen to their business in the future, so being in on some of those kind of conversations,  has been interesting but again even those guys that have raised money, that have got, I guess experienced, high net worth individuals or venture capitalists involved, there’s still a lot of plucking unless they’re seen as a rapid growth industry or someone wants that asset.

Fiona: Would you agree with that, Gary, there’s a lot of plucking a number involved?

Gary: Look, there is, until you actually test the market, it is really just a theoretical exercise. We go through the process and it becomes a best judgement based upon what activity…what other activity’s around in the market, but I’ve been involved with a number of businesses in the software and the online space, and it really defies some of the traditional valuation logic, because at the end of the day it’s what the person buying sees as the value, and a lot of the software businesses it’s about bolt on, how can we bolt this software on to – er – or alternatively it’s something that we can actually put through our distribution channels, so it becomes very much, um, non, um, the returns and paybacks happen very quickly, so they’re prepared to pay what you might perceive as over the odds, because their measurements, whether it be internal ROI, return, whatever are so high, they can afford to get away with buying what I see as over the odds.

Photo: Flickr wetwebwork

Gary Graco Partner at Nexia ASR, Scott Kilmartin founder of Haul and David Eedle, co-founder of Arts Hub, join Fiona Boyd for Valuation Roundtable Part Two and Three in coming posts.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now

Scott Kilmartin joins Fiona Boyd regularly to talk about the highs and lows, and nuts and bolts of running an innovative, entrepreneurial business.

Note – Haul was unfortunately broken into about a week ago and thieves got away with stock and other items important to the business. Whilst the crims have been caught, you can support Haul this Christmas by doing some of your shopping at their online store. Let’s help get Haul back on its feet!

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites. Buy Niche Content Millionaire Now