Investing in Technology: Update on SimplySocial
Alaska investors support Alaska-grown transplant
He describes himself as “just a boy from Alaska figuring out how to take steps forward in the world.” And, boy, is he stepping out. Anchorage born and raised entrepreneur Tyler Arnold, twenty-one, now lives and works in the fast moving world of high tech in San Francisco, trying to build up SimplySocial, his newest venture launched in May 2012.
Arnold is a stranger to neither entrepreneurship nor the high tech industry. He started his first company, Tyler Systems, in 2009 when he was only sixteen and a junior in high school. That firm converted mockup designs for websites, created by advertising agencies and other companies, into working websites. It also provided some of the initial resources for SimplySocial, Arnold says.
Arnold’s experience in finding investors willing to put their money—and faith—in his businesses dates back to when he was trying to set up Tyler Systems. Anchorage businessman Allan Johnston, a supporter, mentor, and investor, remembers how the precocious sixteen-year-old contacted him.
“Out of the dark I got an unsolicited email from a teenager I didn’t know, introduced by ‘mutual friend’ whose name I didn’t recognize. It was an interesting introduction and I became curious,” Johnston says.
After meeting Arnold and seeing his business plan, Johnston was fascinated both by his chutzpah and by his precocity and invested in Tyler Systems and lobbied other business colleagues to invest. The financing provided by those “angel investors” helped Arnold initially and later when he began thinking about SimplySocial.
What impressed Johnston most was how Arnold recognized that he needed help. He had no knowledge of finance or business. “He had the wisdom to know that he needed help. Most people who form companies don’t get that kind of wisdom until they are on their third business, or about forty years old.”
Arnold, it appears, has a knack for impressing people with his intelligence, his drive, and his ideas. Anchorage businessman Rick Nerland was still making up his mind about investing in Tyler Systems when he saw Arnold’s presentation at an Anchorage conference on entrepreneurship organized by the Federal Reserve Bank of San Francisco. “Rick was impressed with Tyler and his ideas and believed the venture was a good one, but he was not convinced. That presentation helped him make up his mind,” Johnston says.
As the business grew it also became international. Arnold began using Romanian software coders and even contracted with some as far afield as Pakistan. He also relied extensively on the Internet using email, text messages, Skype, and phone calls to communicate both with those who worked for him and with his clients.
Arnold graduated from high school early, in December 2009. He decided not to attend college and instead chose to work on expanding his business, getting new clients, and making changes.
He also spent considerable time on the road traveling to Timisoara, Romania, where Valentin Bora, one of the technical people Arnold worked with, lived. Arnold soon met Jeroen Erne from the Netherlands, who joined the team in support of Tyler Systems clients.
Partners in Development
By 2011 Arnold, Bora, and Erne formed a partnership and began developing SimplySocial and the software at the core of that business. Arnold describes his new business as a tool to help companies maintain a presence on social media sites such as Facebook, Twitter, and LinkedIn. He wanted to help companies get rid of their intimidation about using social media and show them that they needed to spend only fifteen minutes daily to ensure an up-to-date presence on various sites.
The effort to introduce SimplySocial included raising more capital. Allan Johnston again saw the potential. He and a group of eight other local investors gave Arnold the financial support he needed for travel and to develop the tools for the new business.
From October 2011 until the introduction of SimplySocial in May 2012, Arnold spent most of his time in Romania working with Bora and Erne. It’s typical for entrepreneurs to move from one business model to another, evolving and building on the success of the previous one, according to Johnston. He was not surprised when Arnold came to him with his new idea, which was SimplySocial, in 2011.
The venture launched with help from the nine investors from Alaska, who also advised Arnold. “I had some very strong mentors such as Allan, and I got some very good advice from my angel investors in Alaska, who were willing to take a chance on a young entrepreneur,” Arnold says.
The months since the SimplySocial launch have been busy. He was mostly away from Alaska in Europe and San Francisco. “I spent the last six months of 2013 in Timisoara but traveled almost weekly to Amsterdam and Munich to serve clients and drum up business,” Arnold says. He also traveled to Silicon Valley to seek capital.
Out of Alaska
After spending time in the San Francisco area, Arnold became convinced that it was time to move his company out of Alaska and into the world. “The Bay Area is known as a place where everyone can come to grow their startup and test their ideas. There are a lot of people here that have built technology businesses [and failed as well],” he says. He relishes the chance “to learn and to get a ‘first look’” at the latest products being developed.
During his stays in Europe last year, Arnold and his team worked on SimplySocial 2.0, tweaking the initial version based on lessons learned from its year in use. They released 2.0 in December 2013.
The new version allows a company to get organized and increase its visibility. “A social media strategy, or even valuable marketing ideas, can be lost in emails, meetings, and forgotten follow-ups. Those are all lost opportunities. Our software helps by allowing our customers to plan social media campaigns, collaborate on content, get compliance [or other reports] engaged, and get contributors involved.”
Most of SimplySocial’s customers have been advertising agencies and public relations firms who want to manage social media content for their customers. But the company is also competing with some big names such as SalesForce and Oracle that also have robust media offerings, Arnold says.
SimplySocial’s advantage lies in its reasonable pricing and its target market of mid-sized companies. “It costs only $3,600 per year and allows a company to have one ‘moderator’ and as many ‘contributors’ as it wants,” according to Arnold.
The moderators are those individuals in a company who are responsible for coordinating and approving the content that will go on various media sites. The contributors are other employees of a company who provide information about their work or that of their section.
A lot of other companies also offer social media software, but most of it is designed for use by marketing departments. SimplySocial’s value, Arnold says, is in how it is tailored to getting the whole organization involved in maintaining a presence on sites such as Facebook, Twitter, or LinkedIn.
To attract more clients, SimplySocial offers a free thirty-day trial. About half of the companies that signed on for the free trial have purchased the new version, although this ratio is always changing.
Five Years Later
It has been five years since Arnold started Tyler Systems, which he ran as a one-person operation using the latest communications technology and resources available. He stayed in Alaska for the start of the next venture, but worked with his team in Romania and with Erne in Amsterdam. Today SimplySocial maintains an office in Timisoara with up to eight contractors. Bora is still in Timisoara, but Erne now lives in Bali, Indonesia. Arnold is now in San Francisco.
So far SimplySocial is covering expenses and plowing back its revenues into the business.
The international makeup of the company continues. The newest addition is French-born Kahlil Beatty, who works with Arnold in San Francisco. Beatty was hired as a social media consultant and is responsible for finding new clients and walking them through the services SimplySocial offers.
“We are focusing on advertising and marketing companies, and we are targeting athletic departments within universities. Some large universities have several teams, and we feel they could manage their social media content more efficiently with our software,” Beatty says.
Growing List of Investors
The number of investors in SimplySocial has also grown. Nearly 50 percent of the investors are still Alaskans, but 40 percent are now from the Silicon Valley, and about 10 percent are international.
Among the new investors is Douglas Grobbe of Amsterdam, who was an executive with the Dutch bank ABN Amro, which operates in fifteen countries. A Korean group has invested in SimplySocial, as well as David Yarnold, who is chief executive of ServiceMax, a private software company.
Another new area of development for SimplySocial is video. The firm developed a video animation team in Romania, which produced a video to show potential clients how SimplySocial 2.0 works. Arnold says the video was so successful that several clients have asked the company to develop videos for their use.
It’s not unlikely that video production might be the next addition to services that SimplySocial offers, Arnold says. In fact, the company’s next step might lead to its becoming a “middle-market media company, where we are not only working for other companies to manage their social media presence through the use of our software, but we could also be providing some of the creative services.”
SimplySocial also recently began a new “analytics offering.” Those who sign up will receive a personalized report from a “dedicated SimplySocial account manager with insights a machine would miss.
“The reports would show companies how well their content is performing. Instead of just giving them the raw numbers behind their social media performance, we go a step further and provide actionable advice to our clients about how they can improve the quality of their social media content,” Arnold says.
Arnold grew up in Alaska and started his first company here. Today, he is no longer in Alaska. His future lies in Silicon Valley, with its venture capitalists and its technological edge. It is the place to be for those who want to make it in the world of high tech.
Johnston sees nothing unusual in this and considers it as a natural progression. “The first time I met Tyler, I saw in him the need to feed his curiosity. For all practical purposes, Tyler is getting his ‘walkabout’ experience. He didn’t go to college, but Alaska’s parochial environment cannot quench his thirst. He needs the folks in Silicon Valley to help him in his search for knowledge.”
Alaska was a critical part of his business, says Arnold, and he is grateful for the strong mentors who helped him and for the investors who took a chance and supported his travels and explorations in the business world.
“The people in Alaska were the building blocks of my life as an entrepreneur, and without them none of this would even be close to possible. I think some seeds fall on rocks and some fall on fertile soil, and Alaska is definitely fertile soil for us.
“Even now, I get advice on a weekly basis from mentors in Alaska and it continues to be incredibly helpful,” Arnold says.
Is SimplySocial a success? “I think when you’re looking at a startup, you’re creating something from nothing, and failure is the default outcome. In that sense, your goal should be to develop many positive relationships and learn as much as you can in as short a time as possible. Looking back at all the great mentorship and the lessons I’ve learned, I do consider it a success.”
Writer Shehla Anjum is based in Anchorage.
Posted: July 1, 2014