Web startup Q&A with Allen Stern of CloudContacts

Few people take the plunge and turn that Web startup idea into reality, and making a viable business out of it is even harder.

That’s why we had this idea to sit down with people who have launched Web startups within the last couple of years and pick their brains. We’re hoping these little Web startup Q&A sessions will be both inspirational and interesting, and plan on making them somewhat of a series over the course of 2009.

First off is Allen Stern, who many know from his blog, CenterNetworks. He is the founder of CloudContacts, a Web startup that launched last year. Allen was kind enough to let us pick his brain about his startup and Web startups in general.

Pingdom: For those who don’t know who you are, what is your background? Also give us a brief intro to CloudContacts, your startup.

Allen Stern: I am born and raised in NYC, have an undergrad degree in Accounting and a MBA in Marketing and International Business. I’ve worked in a variety of industries including managing the Internet marketing team for a Fortune 50 company.

I launched CloudContacts in November 2008 after building the tool for myself. Basically we take the business cards you collect, digitize them, allow you to export the contacts in a variety of formats (e.g. Salesforce, Highrise, Gmail, Yahoo Mail, Outlook, etc.) and also create contact pages for each contact where you can view lots of additional details about the person.

Pingdom: The idea for CloudContacts. Was it an “aha moment” for you, or something that came about gradually? How did it come about?

Allen: I run a tech blog called CenterNetworks and at every event I attended, entrepreneurs would hand me their cards and ask me to write about them. I get back to the office and put the cards in a drawer in my desk and never do anything with the cards or the contacts. I realized that for CN to grow, I needed to get to all of the contacts and get them to CN. And that’s where the idea started…

Pingdom: What were your main considerations when setting up the CloudContacts website?

Allen: The most important consideration is that the site is easy to use. I am targeting mainstream business users and not early adopter tech folks. I also wanted to make sure that the site was quick to load from both the computer and from a mobile device.

Pingdom: What are the main challenges to finding customers for a brand-new online business? What has been your approach?

Allen: I think the main challenge is getting the word out and making sure you go to where your customers are. I see so many startups that are trying to reach a mainstream audience focusing on receiving blog posts on tech blogs. The key is to become one with your potential customers and “hang out” where they are.

Pingdom: Standing out, getting the word out there about your startup. Has it been difficult to get noticed? What has been your approach?

Allen: I think it’s always harder than we all think to get the word out about a new service launch – especially one that charges and isn’t “sexy”. My approach has been to always be ready – whether it’s on a plane, a train, in an elevator, in the supermarket, anywhere – I am always ready to talk about CloudContacts. I have also been lucky – nearly all of my customers have shared the service with a friend or colleague which has led to many additional sales.

Pingdom: Has your experience as a Web analyst and blogger helped you? In what way?

Allen: If I look back at the last two years writing on CenterNetworks, the best part has been hearing the stories of thousands of entrepreneurs – what’s worked and what hasn’t. It’s made for great education that I use daily with CloudContacts.

Pingdom: How do you see the “recession” affecting Web startups? Are there positive aspects of it?

Allen: It seems startups who believed that a full ad-supported model would work are re-examining their businesses. I think the most positive aspect is that we are seeing startups trying a variety of different revenue models today.

Pingdom: To VC or not to VC. What are your thoughts on that?

Allen: This is an interesting question. Half of the people I talk to say startups should take funding to help them expand quickly. The other half say if your startup is making money, don’t take any VC and keep the full equity for yourself and your other founders/employees.

Pingdom: What common mistakes do you see new Web startups making?

Allen: The biggest mistake is thinking that overnight success takes one overnight. For most startups it can take months or years to see real success. The other huge mistake I see startups making is believing that one blog post or one writeup in a newspaper will provide instant success. My advice is to always go wide with your news – don’t give out exclusives even when some bloggers might make you believe that their blog will equal instant success.

Pingdom: Any final tips to people who are thinking about taking the plunge and launching a Web startup?

Allen: If you have an idea, go for it. It’s better to look back whether or not your startup is a success than to look back wondering what would have been. It takes a lot of attempts at the plate before you hit the home run. And no matter what, don’t let a few bloggers tell you otherwise.

We’d like to extend a big thank you to Allen for taking the time to share his thoughts and insights with us. You can read more from him over at CenterNetworks, or of course check out his startup, CloudContacts.

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