If your business offers stock-based compensation, also known as share-based compensation, as a benefit of employment, Kei Morita has advice. A principal in the Los Angeles office of HCVT, a top 30 CPA firm, Kei has extensive experience providing audit and assurance services to closely held private companies, particularly those in the tech industry. Here, he answers our pressing questions.  

Connecticut Innovations: Thanks for agreeing to this interview, Kei. Let’s dive right in. What are the common ways you see tech startups structure stock-based compensation?

Kei Morita: Restricted stock units and stock options with service conditions are the most common. Even with plain-vanilla features, accounting analyses for share-based compensation can get complex.

CI: Do you have tips for choosing the best type of SBC, from an accounting and reporting standpoint?

KM: The easiest SBC arrangement from an accounting perspective is one that contains no performance conditions, such as EBITDA [earnings before interest, taxes, depreciation, and amortization] target vesting, or market conditions, such as MOIC [multiple on invested capital] target vesting. If you include put [redemption] or call [repurchase] features in an SBC arrangement, those may complicate accounting analyses even further.

CI: Are there common mistakes you see early-stage tech companies making when they offer stock-based compensation?

KM: I occasionally see early-stage companies offer SBC awards without considering the tax implications—payroll tax withholding requirements, taxable awards, etc. This often results in the company owing back taxes and penalties. I strongly advise early-stage companies that offer SBC awards to consult with their tax advisors when structuring these awards. I also see startups repurchase vested or unvested SBC awards when employees leave. With that practice, SBC may need to be treated as liability-classified awards, which would need to be fair-valued in each reporting period—that is, every time the financial statements are prepared.

CI: How can early-stage startups with limited resources better prepare to handle complex accounting and financial reporting for stock-based awards?

KM: Until GAAP-based financial reporting becomes a requirement, many early-stage companies won’t account for SBC awards under GAAP. However, it is imperative that companies maintain complete records from the beginning to avoid any tax or legal issues. Depending on the number and frequency of SBC awards they issue, it might be a good idea for these companies to use a cloud-based equity management platform to track the SBC award activities for accounting and legal purposes. It often gets too complicated to maintain SBC awards in spreadsheets, especially when the awards are issued frequently, or features differ from award to award.

CI: Why did the FASB and the Private Company Council issue new guidance on share-based awards last year?

KM: In general, SBC needs to be fair-valued at the grant date using a valuation technique such as an option-pricing model (e.g., Black-Scholes), which requires various inputs, including the fair value of the equity shares underlying the award. Based on its outreach and the feedback it received, the Private Company Council (PCC) learned that determining the current price input used in an option-pricing model is typically the most difficult task for private companies. Since private company shares are not actively traded, there are no observable market prices for those shares, so the PPC decided to provide private companies with a practical expedient to ease the cost and complexity of applying accounting guidance for all equity-classified SBC awards under ASC 718. The FASB issued ASU 2021-07 to allow private companies to elect this practical expedient in 2021.

As a practical expedient, a nonpublic entity is allowed to determine the current price input of equity-classified SBC awards using the reasonable application of a reasonable valuation method. This includes a reasonable valuation performed in accordance with the U.S. Internal Revenue Code, also known as a 409A valuation.

CI: What has been the result?

KM: Many private companies historically obtained a 409A valuation for tax purposes and adjusted the valuation for ASC 718 accounting if subsequent events or transactions changed the valuation.

As a result of ASU 2021-07, some private companies may have reduced cost or complexity, as the PPC intended. However, since many private companies had already used a 409A valuation with or without adjustment before this ASU came out, and since other ASC 718 accounting complexity still exists, I have not seen many private companies consider the practical expedient a game-changer under ASU 2021-07.

CI: At what point is a company required to become GAAP-compliant? How can it do so?

KM: Prior to obtaining outside financing, many technology startups and other early-stage companies simply ignore the accounting for SBC awards. But as companies raise larger funding rounds—typically in the Series A or B round—they will need to be audited and must become GAAP-compliant. Before raising a Series A, an early-stage company should implement GAAP accounting even when GAAP reporting is not required. Many companies with a Series A retain a CPA consultant or a future auditor to assist them in making their books GAAP-compliant soon after Series A is raised.

CI: What are some of the critical stock-based compensation accounting and reporting considerations a company should be aware of?

KM: At a high level, a company should be aware of two classifications: one, liability-classified awards, and two, equity-classified awards. Liability-classified awards need to be remeasured at fair value at each reporting period, whereas equity-classified awards do not require remeasurement unless SBC awards are modified.

Various features embedded in an SBC award, such as put and call options, may cause the SBC award to be liability-classified. Also, depending on vesting conditions, the amount and timing of SBC expense may differ. SBC awards with service conditions without performance or market conditions are expensed over the requisite service period. SBC awards with performance conditions are recognized only when it is probable—about 75 percent likelihood—that the conditions are satisfied, and therefore, SBC awards vest. SBC with market conditions requires a complex valuation model, such as a Monte Carlo simulation model, to value, and are typically recognized regardless of achieving such conditions.

CI: What can companies that aren’t GAAP-compliant do to prepare for larger rounds, exits, etc.?

KM: Common accounting challenges in many tech companies are related to revenue recognition, leases, equity and debt arrangements, and SBC. Accounting analyses for these areas may require significant time and effort to become GAAP-compliant. Thus, it’s advisable to retain a CPA or a future auditor for GAAP conversion as soon as a Series A is raised, rather than waiting until GAAP reporting is required.

In a typical transaction, a buyer requires two- or three-year comparative GAAP financial statements from the seller that have been audited by a nationally recognized accounting firm. Generally, when the seller’s books are GAAP-compliant, a single-year audit process takes two to three months, and a two-year audit process takes three to four months. When the books are not GAAP-compliant before an audit begins, it can take several more months to get the books ready for audit. Larger rounds may come with a tight due diligence period—for example, three months—so if books are not GAAP-compliant when a Letter of Intent is signed, it can be challenging to complete the audit process within the expected timeline.

CI: Anything else you want to mention to our tech entrepreneurs?

KM: SBC awards vary from company to company, and there is no one-size-fits-all solution from an accounting perspective. Suppose a company does not have a GAAP-experienced CPA in its accounting department and it needs to account for SBC awards under US GAAP. In that case, the company should consider retaining an outside consultant sooner rather than later to track SBC awards correctly and to account for them properly under ASC 718. Generally, tech companies are C-corporations. There are likely other transactions, such as convertible debt, SAFE [simple agreement for future equity], and preferred equity instruments that come with GAAP implications. I suggest early-stage companies obtain help with accounting analyses for these debt or equity instruments, since they can be even more complicated than SBC accounting.

CI: Great advice, Kei. Thanks for sharing all that with our audience.

KM: My pleasure.

Cleantech Startups Are the MVPs of CI’s Newest Fund

The investment team at Connecticut Innovations believes that clean technologies are poised for exceptional growth. But that’s not the only reason CI’s newest fund is green. Connecticut leaders know that environmentally friendly products and services can help combat critical issues like climate change, soaring energy prices, pollution and diminishing natural resources. CI’s Konstantine Drakonakis, an environmental engineer, entrepreneur and investor who is overseeing the fund, tells writer Amy Hourigan about this exciting new initiative and some of the promising companies already in the portfolio.

Amy Hourigan: Thanks for your time, Konstantine. CI has been investing in renewables and other environmentally friendly companies for years. Why create a new fund?

Konstantine Drakonakis: You’re right. CI has been investing in cleantech for years. We have several companies in our portfolio that are focused on high-potential innovations like better battery storage, fuel cells and clean financing. This new fund is timely, though, given the environment—both literally and figuratively. We need to do more to address climate change now, so that future generations can thrive in a healthy and stable environment. We also want to support Governor Lamont, who is committed to reducing greenhouse gas emissions to net zero by 2050 and is committed to creating a climate-tech-driven economy. There are funds available to help us with these efforts through President Biden’s American Rescue Plan. CI applied and earmarked $50 million for climate tech deals through its new Climate Fund.

AH: Can you tell us what you’re looking to invest in?

KD: We’re looking for new ideas to improve public health and our business and community infrastructure. We want a healthy pipeline of diverse companies that have market-ready solutions to support a green grid, waste management systems, and agricultural and commercial products and services.

AH: Have you funded any companies yet?

KD: Yes. We’ve funded two “proof of concept” initiatives. The first one, NANOIONIX, is located in Farmington. It’s part of the University of Connecticut’s Technology Incubation Program. It’s an early-stage advanced materials company that has developed a family of engineered self-disinfecting ceramic materials that, when added to things like paint, asphalt shingles and aggregate, reacts with the sun to clean the materials. It gets rid of viruses, bacteria and dirt, kind of like what OxyClean does for your clothes. It’s effective and it doesn’t harm the environment, so it’s very exciting.

We’re also closing a deal with Zone Flow Reactor Technologies in Windsor. They’ve developed a hydrogen production technology that improves the efficiency of steam methane reform systems. It makes hydrogen production from natural gas much more environmentally friendly. It’s a transition technology for the hydrogen economy.

AH: So you’re looking for really early-stage deals?

KD: We’re looking for a mix of early-stage and later-stage deals. We’ll invest a target amount of anywhere from $150,000 to $2 million per investment round in a company. We’re also considering investing in a fund of funds that focuses on waste, mobility, the circular economy and resiliency.

AH: OK, good to know. You’re a Yale-educated environmental engineer with years of engineering and investing experience. Does CI have other investors on the team who are also experienced in cleantech?

KD: Yes. Several members of the team have manufacturing and advanced materials experience, and there are people who specialize in biotech and who cross over into advanced tech. We also have investors who are skilled in cleantech software and consumer-facing products and services. It’s a great mix of talent that will ensure we’re funding the right deals.   

AH: Anything else you want to mention?

When we think about cleantech, we’re not restricting that to mean any one vertical—it’s not just carbon capture or renewables. We want to invest in technologies that are making an impact on sustainability within the context of climate change as a whole. If you believe your company meets that qualification, or you’re interested in investing alongside us, we’d love to hear from you.

AH: Thanks, Konstantine. Exciting stuff.

KD: My pleasure.

Alex Waldron Joined a Team Set on Improving the Lives of the Millions of Americans Living with COPD. Here’s How It’s Going.

An estimated 25 million Americans are battling chronic obstructive pulmonary disease (COPD), a progressive inflammatory lung condition whose more alarming symptoms include shortness of breath, difficulty breathing and constant coughing. People who have COPD are at increased risk of developing heart disease, lung cancer and a variety of other health problems. Even so, care hasn’t progressed as much as it has for other chronic conditions. With the first fully integrated virtual care system for COPD, Wellinks is changing all that. Alex Waldron, the company’s CEO, took time out of his busy schedule to answer writer Amy Hourigan’s questions.

Amy Hourigan: Thanks for talking with me, Alex. You joined Wellinks about a year ago. What drew you to the company?  

Alex Waldron: Sure! Two things: the opportunity to improve care for people living with COPD, and the dedication and passion of the people at Wellinks, who have been on a mission to help COPD patients since 2017. Many COPD patients feel isolated in their disease, and they’re often confused by the complexity of their medication regimen, the devices they’re advised to use to monitor their health, and how to modify their lifestyle to remain healthier while managing the disease. Building a solution that addresses those challenges with a driven team inspired me to join the company.

AH: How is Wellinks’ COPD treatment different from anything else on the market?

AW: While virtual care models have revolutionized care for many chronic diseases, like diabetes, kidney care and musculoskeletal conditions, COPD hasn’t seen the same level of innovation and investment. There is a huge need for an updated model for COPD care, particularly when so many live with the disease, which is the third leading cause of death and fifth most costly chronic condition impacting our healthcare system. Research shows that integrated COPD care can improve outcomes for patients and reduce costs, but too many patients lack meaningful access to such care. At Wellinks, we aim to bring the same innovation seen across other chronic diseases to COPD through virtual-first care that can meet patients where they are and give them the support they need.

Wellinks offers the first fully integrated virtual care system that empowers patients to manage their COPD. It combines virtual pulmonary rehabilitation, personalized health coaching, monitoring through connected devices and an easy-to-use patient app. This activates our members in their self-management and enables providers to close gaps in care. Wellinks is expanding the capabilities of our current healthcare workforce, increasing transparency and improving patient well-being.

Right now, we’re the only solution focused exclusively on COPD, and are investing heavily in developing a strong clinical evidence base for virtual-first COPD care as we lead this charge.

AH: That’s impressive, and it sounds like a lot of work. What has been your biggest challenge as CEO so far, and how did you overcome it?

AW: The biggest challenge coming into Wellinks was one I tackled with the leadership team: How do we evolve a medical device company into one where we provide a full-stack solution for the care and management of COPD? The digital health, and in our case, virtual-first, landscape has been evolving so quickly, catalyzed by COVID and the willingness of patients to use technology and services to better treat disease. Our leadership team looked at all the trends with other virtual-first companies in diseases like diabetes and musculoskeletal health and the way health systems were integrating this new methodology to provide access and care. We then considered what assets we had as a COPD company with over three years’ experience understanding what patients with COPD really needed, and then developed the strategy to transform Wellinks into a company laser-focused on meeting those needs for patients.

AH: That focus paid off. You recently closed a $25 million funding round. Do you have tips or lessons learned from the process that you can share with our network?

AW: Yes. Be persistent and find the right investor for the company you’re funding. In the case of Wellinks, we’re building an innovative virtual-first company in a healthcare landscape that is evolving to be more value-focused and recognizes the need to improve access. While we spoke with a lot of investors in the healthcare space, many have a more traditional investment thesis in assessing companies. We were fortunate to have had Morningside Ventures, an investor with a strong appreciation for the emergence of virtual health solutions and a belief in their adoption into the wider healthcare landscape, lead the round.

AH: I understand the company pivoted. Can you talk about that?

AW: Think of it more as an evolution than a pivot; empowering people with COPD to live fully and breathe freely has been the mission since day one. The approach we are focused on today started in late 2019 as a result of combining two existing Connecticut companies, Convexity Scientific Inc. and Wellinks. In bringing together the virtual health and human-centered product design expertise from the original Wellinks team, and the health tech focus of Convexity Scientific Inc., we set out to reimagine COPD care.

AH: Despite being one of the costliest and most common chronic conditions in the U.S., COPD hasn’t seen much in the way of innovation and investment. Why do you think that is?

AW: Working for over five years with more than 20,000 people with COPD, the Wellinks team has seen firsthand the frustration that many experience while navigating the current care system. Unfortunately, too often COPD patients who have bad outcomes are blamed for inadequate self-management, when they are navigating a care system that is fragmented and inaccessible and overemphasizes high-cost acute and inpatient care. This has created a negative cycle that is taking a heavy toll on COPD patients. It’s resulted in low engagement, a lack of adherence, and a lack of proactive longitudinal care that’s needed to help patients manage their condition.

We’ve also learned that many COPD patients aren’t aware that it’s possible to improve their symptoms with the right combination of rehabilitation, coaching and behavior change. When the patient community doesn’t understand the benefits that a virtual-first solution can provide, it’s harder to gain widespread traction. There is an element of education that has to happen across patients, payers and providers to demonstrate the possibilities of this innovation.

The onset of the COVID-19 pandemic compelled changes in how we think and deliver care; however, many providers and third-party payers are beginning to embrace technologies that enable a wider variety of at-home care options. We are encouraged by the explosion of virtual-care models that have revolutionized care for other conditions and are confident in our ability to similarly transform COPD care.

Wellinks’s innovative technology empowers COPD patients to better manage their condition.

AH: How are you getting your COPD solution into the hands of more patients?

AW: Wellinks is working with leading academic, research and advocacy organizations to grow the evidence base for virtual-first COPD care; we’re also helping to increase access to necessary care by getting an integrated COPD solution into the hands of more patients. In parallel to those efforts, Wellinks is forming and seeking partnerships with innovative health plans, provider networks and advocacy groups to generate evidence in clinical trial and real-world settings.

We know that health technology innovation doesn’t really matter unless we’re able to get it into the hands of the people who need it, and unless it truly engages them in their health. By using patient-centered design and creating a constellation of care through our integrated model, Wellinks helps increase engagement and improve self-efficacy among people with COPD. For many COPD patients, it can be extremely difficult to access in-person care, both because of a shortage of care availability and as a result of symptoms that limit mobility, which is why the virtual-first model is so important.

AH: Is the virtual-first solution easy for patients who aren’t digital natives to pick up?

AW: The myth that older adults can’t use technology has been busted, so our opportunity now is to prove that the people we are working to serve will meaningfully engage with innovative health delivery tools.

To achieve that, you have to design the solution with your end users in mind and develop full wraparound supports that reflect how they are using the tech. If the solution is simple and intuitive, and there is a real human in the loop that they can use as a resource to guide them, there is a greater likelihood that they will stay engaged. Because COPD is much more prevalent among older adults, we made sure Wellinks had all of these elements and would be accessible for this population. Additionally, our virtual health coaching capabilities give our users personal contact with trusted resources, who guide them not only through their care journey but also through their tech journey, as they familiarize themselves with our app. In fact, recent research published in Journal of Medical Internet Research found that Wellinks effectively engaged older adults at a high rate. With the average age of 80, all studied patients achieved the weekly goal of at least one pulse oximetry reading per week for the full eight weeks, and continued to log medication use, symptoms and spirometry readings regularly for the full duration of the study. Eighty-one percent of participants reported that the Wellinks app was valuable, 94 percent said the app is easy to use, and 100 percent remained engaged at eight weeks.

Given the difficulty of managing this complex, chronic disease, this feasibility study shows older adults will engage with a well-designed virtual-first solution like Wellinks.

AH: Those are impressive stats! Congratulations. So, you studied business, economics, political science and government. How did you get into digital health?

AW: I have spent my career working to evolve healthcare options for patients across many diseases with multiple solutions. While I may have started in traditional pharmaceutics “carrying the bag” as a salesperson, I quickly transitioned into biotechnology in the mid-1990s as I became fascinated with novel ways to treat people with diseases that had previously had few care options. The same can be said for digital health solutions. While pharmaceuticals, biologics and devices can chemically, biologically or physically provide help for patients in need, there are many diseases where changing behavior, providing support and managing the disease via digital health and virtual-first solutions can have a profound and clinical impact on disease outcomes and patients’ lives.

AH: What do you do in your downtime, and how do you avoid burnout?

AW: Downtime is always such a challenging concept when in a startup. You have the privilege to work with such passionate people and, in the case of Wellinks, you get to work on a solution that is badly needed by COPD patients. You always want to be working to help the company succeed and to help those patients get the best possible care. I often remark that the title of the book I’d write chronicling my experience in a startup would be “Exhilarated and Exhausted.” Having said that, I’m always conscious of the need to balance life, work and family. My weekends tend to consist of spending time with my family, and if I’m lucky, exploring a craft brewery with friends in New England.

Wellinks’s easy to use, intuitive app helps COPD patients better manage their care.

AH: What’s next for the company?

AW: Looking to the future, our focus is on building a great company, growing our team, refining our technology and expanding the value we can create for members living with COPD through agreements with health plans and providers.

We also remain dedicated to ensuring that evidence-based research and clinical studies are a core component of the company’s work. In parallel to new clinical research studies examining both the clinical and economic outcomes of our virtual-first solution, Wellinks is forming and seeking partnerships with innovative health plans, employers, provider networks and advocacy organizations to generate real-world evidence in clinical trial and real-world commercial settings.

We’re very excited about where the company is today, and everything we have planned in the coming year.

AH: Thanks for your time, Alex, and best of luck on your continued success.

AW: Thank you.

They aren’t pretty or, thankfully, painful (unless you get one on your foot), but warts are a nightmare to get rid of. Freezing is painful, over-the-counter treatments require months of diligent application, and the much-praised duct-tape method doesn’t work. (I know. I’ve tried it on all three of my kids.) Dr. Reid Waldman’s company, VeraDermics Inc., offers hope for frustrated parents and children. Here, he tells writer Amy Hourigan how his revolutionary new painless pediatric wart treatment came to be, why building a startup is nothing like what you see on TV, and how he approaches fundraising to get the results he’s after.

Amy Hourigan: Thanks for talking with me, Reid. Our readers are always interested in learning how entrepreneurs are solving some of today’s biggest challenges in new ways. How did you get the idea for your revolutionary treatment for pediatric warts? I read that up to 33 percent of children and teens have them, so this will come as welcome news.

Dr. Reid Waldman: VeraDermics Inc. was founded at MIT Hacking Dermatology [a dermatology hackathon] because our founding team of dermatologists was frustrated treating warts on a daily basis and felt that a painless and kid-friendly treatment for warts was needed.

AH: I agree! This would have been a godsend when my kids were little. How is what you’ve developed different from anything else on the market?

RW: There are no FDA-approved prescription treatments for common warts. The treatments that are used, like freezing the wart with liquid nitrogen, are painful, scare children and still are not particularly effective. Over-the-counter treatments like salicylic acid, which is the active ingredient in Compound W, require daily applications for months at a time, which is too burdensome for most people.

AH: You’re a board-certified dermatologist turned dermatology innovator. What attracted you to entrepreneurship?

RW: As a physician, I have always enjoyed research. I find entrepreneurship, and drug development in particular, to be a much better version of research because the outcome is tangible.

AH: What was your company’s biggest challenge so far, and how did you overcome it?

RW: Our biggest challenge to date has been building out a robust team. Drug development is a multifaceted discipline that requires contributions from numerous people with highly specialized knowledge in areas like chemistry, manufacturing and controls (CMC); regulatory affairs; and medicinal chemistry, to name a few. One of our top priorities at all times is ensuring that we have the best partner possible for each specific job. Our network of mentors has been instrumental in helping us choose who to partner with.

AH: You recently raised a large round. Do you have tips for other entrepreneurs who are fundraising?

RW: Take every meeting! Raising money is all about building relationships, and the only way to build relationships is by talking to people. Almost all of the money that VeraDermics has raised has resulted from a warm introduction to an investor by a mentor.

AH: What’s the hardest part about being an entrepreneur?

RW: Patience and discipline. Unlike on TV, building a startup does not happen over one night or because of one pitch, even though VeraDermics was founded at a weekend pitch event. Many business activities unfold over months or even years, and it requires patience and discipline to persevere, especially when there is turbulence on your path.

AH: What’s the best part?

RW: Watching plans that you dreamed up over the previous months or years come to fruition. Even little victories can be motivating when they occur because of hard work and strategic vision.

AH: How do you avoid burnout? I see BBQ, judging by your LinkedIn profile.

RW: I love VeraDermics! While it’s trite, it’s also true that if you do something you love, you’ll never work a day in your life. Nothing makes me happier than working toward the company’s goals.

AH: Why did you choose Connecticut?

RW: I moved to Connecticut initially for work and have stayed due to the robust ecosystem and seemingly endless opportunities here. We found Connecticut Innovations shortly after founding VeraDermics by googling funding opportunities in Connecticut. We are very appreciative to have the support of Connecticut Innovations and CI’s senior managing director of investments, Kevin Crowley. Kevin has been an exceptional resource for VeraDermics, and he serves as one of our most esteemed mentors.

AH: What’s next for the company?

RW: Our next big milestone will be filing an Investigational New Drug application, or IND, for our wart product.

AH: Good luck and thanks for your time, Reid. We’ll be looking forward to seeing your product come to market.  

RW: My pleasure.

It was never easy to get a reporter’s attention, but with budget cuts in the newsroom and time at a premium, you must work even harder to stand out. Here, PR pros, a journalist and multiple entrepreneurs share what’s working—and what’s not.

Help your company stand out (especially on a limited budget)

“When you’re working with a limited budget, hiring a PR firm or other agency to find and connect with journalists and blogs on behalf of your business isn’t an option. Fortunately, with a little tenacity and know-how, you can achieve much of the same results with only one or two dedicated people. If you have a product launch or other upcoming event, stand out by personalizing your pitches. Journalists get pitches all day long, likely for products or businesses just like yours, so you can’t expect an impersonal cold email to inspire them to cover your launch. Take the time to browse their recent work and include a short blurb in your pitch about how you enjoyed their recent article on XYZ.”
—Dr. Emily Perry, senior education program manager, QuillBot

“Reach out to local media contacts and develop key relationships that will foster continued coverage. Not every media relations effort needs to be national.”
—Carson Kunnen, communications coordinator, Fifth Wheel Freight

“With journalists and their editors looking as closely at their social interactions as their page hits, the best angles are those that provoke conversation. If you lack a strong enough hook for your news, try approaching with a comment piece providing a fresh outlook on the industry that goes against the grain. Get people talking about the message you’re pushing and they will start talking about the person behind it, and thus the business they own/represent. There is a fine line between provoking a conversation and aggravating figures within your industry. Tread lightly.”
—Ryan Hathaway, PR and media manager, BrighterDirections

“Find the publication you’re targeting, and the specific journalist if possible, and see how they write, what their common themes are, and how well their readers engage on social media. Afterwards, if you still feel your story is a great match, be sure to point that out in your outreach. It demonstrates that you’ve done your due diligence, which will set you apart.”
—Connor Hewson, managing director, Assured Marketing

“Make personal connections with the media in your region.”
—Ben Baker, newspaper editor, syndicated columnist and freelance writer, Baker Brothers PR

“One of the best and most cost-effective ways to launch a PR campaign is to create link-worthy content in the form of a study or industry report. Original data will help you stand out and attract journalists’ attention. Research content, for example, from your competitors, that generated mentions and backlinks from reputable publications. This exercise should give you an idea of the type of content you need to create.”
—Kas Szatylowicz, content and PR manager, V7 AI Vision Platform

Make your pitch stand out

“When pitching your B2B story, make it simple and direct. Journalists may already have a plethora of pitches to review, and so it’s advantageous if you can capture their attention within the first few sentences.”
—Martin Luenendonk, CEO of FounderJar

“First, the don’ts: As a journalist, I am not interested in hearing you have opened a new business and are offering X to the public, unless X is something truly unique and revolutionary. You may think what you have is unique and revolutionary. Ninety-nine percent of the time it is not. Absolutely do not come to me to announce a big sale. If I don’t block you, I will refer you to the advertising department. Don’t come to me with a story about superior service. Everyone says this. I forget how many businesses come to me and want me to write this story. No. A real story is why you opened the business. Tell me about how you grew up, what you wanted to do as a kid and why that led you to the business. Tell me about your community service work and how that dovetails into your business. We have a Youth Apprenticeship program in my community. Businesses hire high school students to work in the place. Students get paid and get high school credit for this. Each one of these kids is a story. Volunteer in the community. [There is] always a story there and it can link back to your business. Tell me why you located your business in the community. Be local. Local is defined as my coverage area. I regularly get PR that says LOCAL in the subject line. I open it to find out the person/place/event/thing is several hundred miles away. Do that a few times and the email gets blocked.
—Ben Baker

“Unless you are bringing a revolutionary product to market, immediately contacting national outlets is unlikely to yield results. Work up through the media ranks, quietly and proportionately building your contact bank as your business itself grows. As mentioned before, provoke a conversation. Think about the articles that you read and share with others: What do they have in common? They either present something new, present an opinion that goes against your own, or provide new insights in an area of interest to you. When your angle is ready, create a priority list of media outlets you would like to be featured in and personally pitch to the right contacts at each. It is vital that you take time to research each outlet closely and discover: A) What are their guidelines for contributions? B) Who is the best person to contact for this pitch? C) Are there any specific pieces of information that they want to receive with your pitch? D) Is your news relevant to their audience? From here it is a time-consuming but ultimately rewarding process of reaching out to discuss your idea.”
—Ryan Hathaway

“Don’t be boring or generic. Lay out how the business or product you want them to write about is different or disruptive and offer some angles specific to the journalist’s niche or location. Help them help you! It is not their job to come up with how your product or business will change the world, and if you don’t include the angle, you will likely not get a response. Also, don’t expect a journalist to drop their other stories to cover yours because you were late pitching. A week of lead time is considered good practice for events like product launches. The opposite is almost never true: Even the best pitch levied too late in the game won’t fly. And don’t contact more than one journalist at an outlet at a time. If several from the same place accept your pitch, you will burn bridges because they don’t want to be writing the same thing.”
—Dr. Emily Perry

“A good human interest story will almost always increase brand awareness. It’s crowded out there, and the fact that people buy from people first will never change. Tell the intimate stories of how your brand helped customers overcome hard times, share customers’ milestones or achievements or random acts of kindness or bravery, honor unsung heroes, or highlight a social cause that’s near and dear to your heart.”
—Lakesha Cole, founder and principal publicist, shePR

“Journalists hunt for interesting facts they can turn into compelling stories. To be successful at pitching journalists as a B2B business, you have to give them what they’re looking for—intriguing, original findings that will make them go ‘Wow, I need to be the first one to cover this!’ My tip is to make sure you provide journalists with everything they need to share your stuff with minimum effort—give them the write-up, highlighted facts and numbers, infographics, quotes, etc. And make sure you reach out to relevant people in the first place!”
—Kas Szatylowicz

“Getting coverage as a startup is relatively easy, particularly if you can announce a successful round of funding. There are many outlets that want to hear about the pitch deck that helped a hot startup raise millions. You have to be able to sell the story, though—what are you going to do with the investment that’s different? That’s the key: identify what makes you different and tell a story that hasn’t already been told.”
—Jennifer Reid, managing director, Techmarketingtalk

“The best way is to document your own narratives internally. Write down all the events, twists, turns and key people who are making interesting things happen. Ask yourself, would I like to read about this? Think of your startup as a movie set—or better yet, a Seinfeld episode. Who are the standout employees or executives or investors who have a compelling or funny or innovative story? How did they defy the odds and come up roses? In what ways has your launch or product or startup journey been excruciatingly interesting? Telling your compelling or educational or amusing business story is largely free if you have the time, the penpersonship, and the patience to write to each journalist individually and ideally exclusively. Never send out an email blast to every reporter on your list. Expensive PR or publicity consulting firms like mine are simply selling you their time and expertise, along with their contact list and proven strategies for earning great press. Truth be told, you can do this yourself if you and your team can advance an authentic, multi-pronged narrative that reads like a mini action-adventure novel or Navy SEAL mission.”
—Baron Christopher Hanson, growth strategy and turnaround management consultant, RedBaronUSA

“When you are starting off, the best step you can take is to be personal. Offering to take the journalist for a coffee to showcase what you are offering is a much better idea than hoping they will respond to a cold email. Start local and build a core of support with the journalists around you and build from here.”
—Zac Surprenant, marketing director, BPKC

Build a targeted media list on a limited budget

“Find out who does the reporting for the media outlets that cover your area. Find out who covers the sector your business is in. Harvest emails from websites. Find out when their deadline is. Then, make an appointment to speak with that person well before or sometime after deadline. Caution: If you start spamming me, I will block you. I’ll never see your stuff again. I have blocked all the major press release distribution agencies. This morning, I blocked two small PR agencies.”
—Ben Baker

“Building a targeted media list can feel overwhelming. Start with a Google or Excel sheet. Once you feel this is inefficient, try a platform such as Muck Rack, Cision or Meltwater. Include contact name, publication, areas of expertise/coverage, mailing address, links to their socials, etc. It is important to keep your media information up to date. Attention to detail is crucial. You don’t want to send your pitches to the wrong email or spell your contact’s name wrong. This could ruin a potential relationship.”
—Carson Kunnen

“The easiest way is to use a tool such as Muck Rack or BuzzSumo to get access to the journalists’ database. The cheapest way is to find relevant people on Twitter and LinkedIn and start building relationships with them.”
—Kas Szatylowicz

“Make a list of topics related to your company and put them into a search engine to find out who covers them. For example, if you are in the B2B cloud computing space you could search for cloud storage, cloud migration and cloud management. When going through your search results, identify not just publications but journalists who cover these topics. Now you can build a media list of journalists and the publications they write for.”
—Brad Touesnard, founder and CEO of SpinupWP

“Start with local and statewide news organizations that publish in your niche or have a news section. Some of these will be smaller but will also be looking to champion people from their community or state. Then you can add authoritative online media outlets or blogs that cover stories or launches like yours—they could either fit into your niche or have a news feed. From there, you can look at where your competitors have gotten backlinks or press coverage and target those same outlets, knowing that they have covered a relevant company in your niche. You will still have to contact, pitch and make relationships with the people on your target list, but the list will act like a game plan for your outreach efforts.”
—Dr. Emily Perry

“Get your C-suite together, along with your marketing and sales folks, and become voracious readers of industry-related news. As you and your team begin to follow certain journalists and publications, you can organically build contact spreadsheets, and then craft bespoke press release pitches. The secret is to mail select journalists and editors or newsrooms a handwritten note, a recent clipping of other news you’ve earned, and a few questions about a potential follow-up article.”
—Baron Christopher Hanson

“Work on establishing a relationship with a boutique PR agency that aligns with your company values. Bigger isn’t always the best choice for startups. The media landscape changes all the time, making it difficult for many media list providers to keep accurate databases. Most boutique agencies secure access to a regularly updated media database and invest more time into building media relationships. Many will sell you a list for a flat rate and have more flexibility to work with various budgets.”
—Lakesha Cole

“Pre-built media contact databases can be costly, but they do offer an all-in-one spot for your PR and marketing team to pull from. If you cannot afford one, you can build your own database from scratch. It’s time-consuming but does have benefits, including that you will have to visit each outlet you’re targeting, which means you’ll get an idea of what content they publish, helping you tailor your pitch to meet their style. While most outlets offer contact details and an overview of what they look for in a pitch, not every editor makes their contact details public. You may come across their email address or phone number elsewhere, but if it is not prominently featured on the website it is likely that they do not appreciate receiving cold pitches and will therefore ignore yours if you try.”
—Ryan Hathaway

Wondering how often (or even whether) you should follow up with a journalist? Our experts weigh in.

“My first follow-up is about 14 days after my initial pitch. Then, if I’m really determined to reach this specific writer, I’ll follow up again after another seven days. Unless something changes, I follow up a maximum of two times per journalist. You don’t want to burn any bridge and upset them.”

Brandon Hopkins, founder, DiamondLinks

“Follow-up times to journalists vary. If you’re trying to newsjack a trending headline, you should follow up within 48 hours. If you’re pitching an evergreen story, expect some quiet time after you send the first pitch and follow up in a week. After the second follow-up with no response, the best follow-up is a new pitch.”
—Lakesha Cole

“Following up with a journalist can be tricky. You don’t want to be annoying, but you also want to know if and when your story will get covered. Research shows that 90% of journalists say that one follow-up email is acceptable. Sometimes journalists want you to follow up because, as all of us do, they get busy.”
—Carson Kunnen

“One follow-up with a phone call is enough. Keep pestering me and when I see your number on caller ID, it will just ring and eventually go to voicemail, which I ignore, or the answering machine.”
—Ben Baker

“For a launch with a specific date, you can specify in your pitch that you need a response by a certain date. Depending on the timeline, I will follow up no more than twice before the stated ‘response needed’ date: once the week before, and one last time up to a few days before. I wouldn’t follow up twice in one week, though. If they want to cover your launch and you’ve given them a great pitch to work from, they will let you know if they can make it work. It is their job to find and write about newsworthy things, after all.”
—Dr. Emily Perry

“Send them a handwritten note or thank-you once, with your business card, and that’s it. Do not ping them via email or social media constantly. This will annoy busy journalists who are not only on multiple deadlines each day, but also get hundreds of emails begging them for free press. Be different by starting a conversation with them that’s relevant to their upcoming or distant editorial calendar.”
—Baron Christopher Hanson

“It depends on the journalist. With job cuts and shrinking newsrooms, most editors and journalists have an inbox overflowing with messages, many of which will never be opened, which means follow-up emails are needed. We suggest following up four to five days after an initial pitch, and again the week following if you have heard nothing back. Daily follow-up emails are a great way to find yourself blacklisted.”
—Ryan Hathaway

Another great way to get ink…

“You can hire a writer. You can even dictate what that writer puts down. I have plenty of clients who do this. They get irritated when their press release, blog, etc. does not take off or go viral. Not my fault. I wrote exactly what I was told. I have a few clients who give me a topic and let me do my thing. Their articles, releases and blogs get serious traction. I know what the media wants and I will deliver, if allowed.”
—Ben Baker

Organic search sends valuable, targeted traffic to your website. But SEO is a long game, and it can be difficult to know which tactics to prioritize given that Google updates its algorithm hundreds of times each year. One effort that will continue to be worth your while: building backlinks. Aaron Uscilla, a managing partner and owner of Milford-based Mad Mango Marketing, tells us why, and then tells us how to go about it.

Connecticut Innovations: Hi, Aaron. Great to talk with you. Tell us: How do backlinks drive traffic?

Aaron Uscilla: Think of a backlink as a signal of trust from one site to another. Search engines strive to present useful information to people. One of the quickest ways to determine whether a site is relevant is by looking at its backlink profile. If the site has a well-rounded profile from other independent and authoritative sites, search engines like Google will be more likely to recommend the page compared to pages with weaker profiles.

CI: And yet a recent Forbes article said backlinks are out. Your take?

AU: This article, which preaches long, well-thought-out content in a contradictory 750 words, accurately touches on one area where backlinks are no longer as powerful: to and from news outlets. This measure was primarily a reaction on Google’s part to “fake news.” I want to give this article more credit but am hesitant because of lines like “Don’t even think about reposting someone else’s content. Google will find you and slap you on the wrist.” This has been proven here, here and here to be inaccurate. To understand SEO we need to think like we own Google, which spends millions of dollars every year to figure out how to answer questions with the best resources possible. What is the quickest and most foolproof way to decide that a website is worth showing a user? Assessing how many other authoritative and independent websites refer to its content. Why would another authoritative site link to something that would diminish its brand? Why would 100 sites do this? Backlinks are a signal of trust, and they will always have a place in SEO.

CI: Makes sense. Will the rules change anytime soon?

AU: No, because the rules have never changed; there have only been holes exploited by “black hats” that are covered up with an algorithm update.

CI: How does link building compare to other SEO strategies?

AU: Once you have exhausted your real-world connections for backlinks, you need to create content that other sites will find useful for their readers. So link building and content creation go hand in hand, but content reigns supreme. Link building alone is not an SEO strategy. You need to focus on hard metrics like page speed and bounce rates, then content, and finally link building.

CI: How do you earn a backlink?

AU: You earn backlinks that are worth having in one of two ways. The first and easiest way is by simply talking to the web team at the companies you do business with. Offer to review a supplier’s product, for example, because the company will probably be happy to post the content on their site. The second option is to create useful web content that adds value to other posts around the web. Don’t get sucked into only writing blog posts, either: tools, charts, videos and infographics are also content.

CI: How do you identify a relevant niche?

AU: If a business operates in your space, it’s relevant. As a link builder for multiple companies, I determine whether a site fits my clients’ niche by looking at what keywords it ranks for and what backlinks it has and from where. Then I give it the eyeball test. If you think you have tapped every niche—though I guarantee you haven’t—and you’re looking for new ideas, here’s a tip: Start by auditing the backlinks of the competitors that rank ahead of you.

CI: What if the site already links to a lot of other sites? 

AU: It depends on the size of the site. Large sites should have more links. If you are offered a link on a blog that has more than three or four outbound links per thousand words, you may have stumbled across a private blog network (PBN) or guest-post site that will shop out the post in the future. You should be more concerned with the page than the site, but again, everything comes down to relevancy.

CI: What metrics may tip off a site as a PBN?

AU: Moz’s Spam Score does a pretty good job identifying PBNs. Scrutinize anything with a score of 10 or higher. After that there’s site traffic, which is usually very low or even zero for PBNs. The best way to spot a PBN is to check the backlinks, visit those links, check their backlinks and see if you notice any common junk-looking sites. PBNs have adapted, and analyzing the backlinks takes a trained eye. A good litmus test: Before you start, ask the site owner if they have other sites you can post on or sites they can connect you to. If they send a spreadsheet full of sites, that’s a red flag.

CI: Do page metrics matter more than site metrics?

AU: Page metrics matter more for the average business that is trying to do SEO on its own. Keep in mind that my recommendations are for small- to medium-size sites. Massive e-commerce and news sites may have other link priorities. But SEO is about relevancy. If you have a link placed on a site with 10,000 pages, you are going to get most of your SEO authority from the individual page you’re on. The most important page metrics are traffic to the page and word count. If there are other backlinks, look at the sitewide metrics for each link to make sure the site is healthy and independent of a PBN.

CI: Do site layout and ad placement/quality matter?

AU: Site layout is becoming more and more relevant. Tread lightly with sites that look like they were created at the start of the internet. The same goes for sites that contain spammy ads. That said, if you are hyper niche, like one of our clients who manufactures laminates, a lot of good backlink opportunities may be on outdated websites. I would focus more on page relevancy than the overall layout, but if you are choosing between one or the other and one clearly has a better UX, that’s the one to go with.

CI: What about authors?

AU: For your average backlink, the author doesn’t hold much weight. But if you get an opportunity to get a link from a well-known writer, the article could get more eyes, which may lead to more traffic.

CI: Why is anchor text important?

AU: Anchor text refers to the words the user clicks to visit your site, so you can imagine how important it is. Just like page placement, anchor text requires serious thought and attention. There are several different SEO terms for the different types of anchor text you can use. I wrote a post on the topic here. If your business serves a community, your best bet for anchor text is the business’s name. If your business is not local, having a well spread-out anchor text profile based on the categories in my blog post is a good idea. Ultimately, you want to provide an accurate description of where the user will be going.

CI: Where should the link point to, and do you have control over that? 

AU: You should have full control over the link placement. The link needs to point to the most relevant piece of content on your site for the link. Let’s say you are a 3PL company and you have a drop-shipping page. You find a site willing to add you to their blog about drop-shipping tactics for next year, and you are going to place your link on the anchor text “drop-shipping providers.” You would be best served to have this link point to your drop-shipping page because ideally this page has great content about drop shipping. Linking to the specific page will allow Google to determine relevancy and boost that piece of content more easily. Some people may be tempted to link to the home page, but if we’re looking to provide contextual info to a reader who clicks on this backlink, odds are they would prefer to land on a page dedicated to the topic.

CI: How many backlinks should you try to get? Is there a number that will make the search engines think your site is spam?

AU: There is no magic number that will put you into a spam situation. What you are going for is consistency. In other words, whatever your pace, stay steady. Keep in mind, assuming you aren’t a site with 100k+ daily users, that you should be assessing SEO quarter over quarter, not month over month. Some links take months to iron out.

CI: Should you provide backlinks to other sites? 

AU: If they add context for your readers, yes! But set the links to take the user to another window so you don’t lose them when they click.

CI: You’re a big believer in checklists. Why are they important?

AU: One of my favorite business books is The Checklist Manifesto by Atul Gawande. In it, Gawande, a surgeon, discusses how checklists save lives in the OR, since even the most brilliant surgeon can miss steps in complicated procedures. Backlink building and surgery are very different, of course, but creating a backlink checklist, especially if you are outsourcing the task, can save you from potential penalties.

CI: Can you share the checklist(s) you use? Or tell us what’s on them? 

AU: We use content creation checklists more than backlink checklists since you are more likely to get off topic with content than you are to build a bad link. But if we’re talking about a link-building campaign, you have to build your own tolerance level. The links that come naturally from your regular business operations should be straightforward because you know those sites are an authority. For backlink building as a tactic, focus on the following metrics and set the mark where you feel comfortable:

• Site traffic
• URL rating
• Pages quantity and relevancy of keywords
• Pages quantity and relevancy of outbound links
• Domain rating
• Spam score

CI: When should a company look to hire out its backlink building? Is that considered black hat? 

AU: Backlink building requires time and perseverance. Simply adding it to your marketing team’s to-do list could waste serious time and frustrate them if they don’t have link outreach or negotiation experience. They can learn how to do it, but outsourcing it makes sense for many businesses since you can avoid the expenses that come with hiring or training an employee or setting up these systems in-house. Hiring an honest link builder is no more black hat than hiring an incredible UX designer.

CI: What’s one thing you wish you’d known about SEO sooner?

AU: WordPress is not the end-all and be-all and can even add more stress to your life than opting for a cleaner builder like WebFlow. Google, and as a result SEO, is more and more content oriented. Even out-of-the-box web builders like Wix work directly with Google to make sure their sites meet the standards to rank. WordPress leaves you far more open to malware through things like outdated plugins, plus there’s no support. If you have a team to manage your site, WordPress is a great choice. Otherwise, look elsewhere.

CI: What is the biggest SEO mistake you see companies making?

AU: Writing thin content and giving up on content after a couple of months. If you are a new site, or even one that doesn’t have much authority, you need to think about content creation in a six- to 12-month timeframe. Google is not going to recommend you without vetted proof, meaning content and links. Once you have settled on a keyword goal, build a service or product page and then look to create four to six pieces of supporting content for the page. The main page you’re trying to rank can be brief—750 to 1,500 words—but each blog post should take a deep dive—2,000 to 3,000 words—into a niche for that service or product.

CI: Thanks for the great advice, Aaron. Great talking with you.

AU: My pleasure.

(One who has had kinesics training, that is.)

Unless you’re an actor or a news anchor, you probably never thought you’d spend large chunks of your workday in front of a camera. Thanks to the COVID pandemic, of course, video calls are now so common that “Zoom fatigue” has made its way into the vernacular. There’s no denying that videoconferencing is beneficial: It’s cost effective, efficient, and keeps us physically distanced and safe from viruses. It also may be hurting your business. That’s because our ability to accomplish critical tasks like closing sales, recruiting talent and securing funding is heavily influenced by nonverbal communication. In this regard, video calls aren’t doing us any favors.

Until a few weeks ago, I had no idea video was even a problem (except that I was suddenly self-conscious about a double chin I never knew I had). That changed when I talked to Christianne Klein, an Emmy® and Edward R. Murrow Award–winning network news anchor and the founder and CEO of Truth Fairy. While serving as an expert for a piece I was writing on managing hybrid teams, the former correspondent for ABC News and Good Morning America told me about kinesics, the study of body language as a form of nonverbal communication. I was so intrigued by the possibility that a few simple adjustments could improve business outcomes that we set up a separate interview to discuss the topic.

What, exactly, does kinesics have to do with business outcomes?

Plenty, as it turns out. Research has shown that nonverbal communication is responsible for conveying much of our meaning. In other words, your audience may interpret your message differently than you intended them to for a number of reasons. “Every time you appear onscreen, your audience tunes in to your body language and forms judgments before you even open your mouth,” said Klein. “Your actions are amplified and often misinterpreted, while other ‘in-person’ signals are lost or diminished.”

Klein discovered kinesics by accident while working as a TV journalist. “Network anchors and major market anchors used to spend a significant amount of time with consultants who would explain the psychological impact of on-camera actions, but that hasn’t happened in years,” she said. Early in her career, she found herself asking for the teleprompter to be adjusted so she could read it more easily. “I was stopped by a colleague who told me that I couldn’t angle it the way I wanted. ‘It makes you look arrogant,’ he said. ‘This is the angle you need as a news anchor. It shows you’re in control and have authority on the subject you’re talking about.’”

From that point on, Klein set out to learn as much as she could about how our actions are perceived ‘inside the box.’ She pointed out that on business calls, our audience typically sees us from the chest up, which means we lose two-thirds of our body language. That can have serious consequences: Klein told me about a top recruit who declined a job offer because she felt the hiring manager on the call was ‘arrogant.’

It’s easy to see how video calls are becoming an increasing problem for communicators. “When the pandemic lockdown started, experts in their field were suddenly thrust into this new world of virtual interactions and were struggling to connect in the same way they do in person,” Klein said. “We call it kinesics ‘inside the box,’ because the body language that we normally read in person is limited to a headshot, which magnifies and distorts your actions. Every shoulder raise, uncomfortable movement or break in eye contact becomes heightened and harms your ability to communicate effectively.”

Aside from helping business leaders understand the psychological impact of their actions on camera, Klein’s company teaches them how to communicate authentically and to project confidence. The goal: to make sure you’re as effective in virtual interactions as you are in person. “The camera angles alone that we discuss—authority angle, arrogance angle, weakness angle and others—immediately change people’s perceptions of the speaker. It’s very powerful.”

When I mentioned that I have a hard time concentrating on my audience sometimes because I’m stressed about my own image—and that I had a big industry podcast coming up—Klein offered me an on-camera coaching session that was every bit as powerful as she’d promised. Here are my takeaways.

The Right Tools Make a Difference

Before our session, Klein asked me to order an 18-inch ring light and a video camera. (Once she told me about the difference proper lighting and camera angles make, I was happy to fork over the cash.) The camera attaches inside the ring light, which sits on a tripod. Klein told me to set up the contraption directly in front of where I sit for video calls—she uses a standing desk herself—so that my eyes were two-and-a-half feet away from the camera lens. I then needed to make sure I would be eye level with the camera when sitting upright so that I could look directly at the lens. “This will put your head in good alignment with the ring light for the halo effect,” she said. “You’re looking for an image of yourself from your chest up with about an inch of head room at the top. If you can see the floor or ceiling, you’ve framed your shot wrong.”

Building a Better Backdrop Is a Must

With my new light and camera in place, I was ready for my coaching session. I was feeling pleased with the vast improvement in my appearance, but I soon learned my backdrop needed attention, too. I had been sitting in front of a bank of windows surrounded by my kids’ drawings and a huge clock in the shape of a manatee—distracting, to say the least. Klein recommends that her clients create a dedicated videoconference space that is personalized for their profession. Her own backdrop includes handsome shelves displaying books she’s authored, a copy of the Associated Press Stylebook, small plants and other tasteful knickknacks. Worried about space? Don’t be. “You need just 2.5 feet from you to the camera and then from you to the wall,” Klein said. “A laundry room can work, as long as your background is professional—no clutter, no sensitive documents lying around, and no Kama Sutra unless you’re a sex therapist.” You don’t need much of a budget, either. Klein purchased her shelves, and the adhesive lights she uses to illuminate each one, inexpensively on Amazon.

Klein also said it’s important to make sure no pets or kids walk through the space while you’re presenting, as it is distracting. (I’d always been lax about this since my colleagues and I get a kick out of glimpsing each other’s personal lives.) This is also why windows aren’t a good idea: Imagine trying to close a deal while your neighbor is in your frame riding back and forth on his lawnmower?

Lighting Yourself Properly Takes Practice

“When you’re communicating on camera, eye contact is critical. In this regard and others, lighting is transformative,” said Klein. “Halo lights create a sparkle in the eyes that give you an instant lift.”

Klein uses a Neewer 18-inch ring light that has four white and four orange interchangeable filters that she adjusts to create the effect she’s after. “With fall here, and my complexion, I use all four of the orange-colored filters on my ring light. I find it adds a nice glow.”

If you’re darker complected, start with a pure white filter, but check that it doesn’t look too harsh given your surroundings. Klein suggests playing with the settings to find the filters you like best. (If you want to get fancy, you can also play with background color and put canned lights on the floor to create a mood—blue creates a calming effect, for example, but it’s not necessary for most business calls.)

Whatever you do, Klein says to avoid putting a light source behind you (another reason sitting in front of a window is a bad idea). Backlighting will make you appear as if you have no eyes, which are “extremely important in communication,” she said. You should also turn off any harsh overhead lights, which will make you look hollowed out, like a skull.

The Wrong Angle Can Cost You

Camera angles are critical to getting your viewpoint across and have a massive psychological impact on you as the presenter, and on your audience, Klein told me. Not surprisingly, they are a critical focus of her company’s training—one she explores in detail with her clients. “The engineers who designed our built-in laptop and cell phone cameras were well-intentioned, I’m sure, but the lenses are in a terrible position to help us come across confidently as experts: they can make us look arrogant, like we’re talking down to our audience, or insecure, or even inauthentic,” she said. That’s important to avoid with anyone, but especially when you’re talking with a job candidate or potential investor, or trying to motivate your team.

“It’s amazing to hear focus groups talk about perceptions that can be easily shifted with a few adjustments. We hear ‘this person feels like they’re putting up a wall’ simply because they’re wearing glasses or have facial hair, but anything that blocks your audience from seeing your eyes, like the glare of the lenses on your glasses, will do that,” Klein said. “Ineffective or poor lighting, when it prevents your audience from seeing your facial expressions, can have the same effect.”

Klein also taught me the importance of looking at the camera when presenting so that you can make direct eye contact with your audience. To help, she recommended that I cover my picture. “Coming across confidently as an expert requires eye contact with the camera, not the little screen where you see yourself,” she said. “Your audience is the camera.” Her tip: Put a sticky note with a smiley face right underneath your camera and look at that instead of your own image.

Body Language Counts

Every gesture you make in a video call is magnified in the little screen your audience sees, Klein told me. That’s why it’s so important to keep from fidgeting or checking your cell phone. It will distract your audience or, worse, make you look like you don’t care about the conversation. “Learn to recognize your ‘tells,’” said Klein. Nervous habits like cracking your knuckles or crossing your arms can make you appear less than confident. (My “tell” is a vibrato that appears when I’m nervous. I think I sound like a goat, which ratchets up my anxiety and makes me “maaaaa” even more; Klein’s is a gradual creeping up of the shoulders.) She has easy fixes for both.

Body language can also ensure that your audience will see you in a positive light. “Lean forward when you’re making an important point—like when you’re trying to close a deal—to demonstrate authenticity and expertise,” Klein said.

If You’re on Camera for Work, Hiring a Pro Is Worth the Investment

When you consider that poor communication can be devastating to your business, hiring a pro makes sense. Aside from coaching me about kinesics, Klein gave me recommendations for wardrobe (no busy patterns like herringbone, which causes a crazy rainbow halo on camera), color (wearing red doesn’t project the vibe I was led to believe it does) and makeup. (She offers tips for both men and women, and suggests recording different looks on your phone and seeing how they come across before testing them live.)

I’m still tweaking things here and there, but the lessons I learned from Klein have made a huge difference in my on-camera communication. I’m no longer distracted by my own image, and I’m making more direct eye contact with my audience by looking into the tripod camera instead of looking down at them from my laptop camera like some kind of haughty, double-chinned jerk. I’ll keep you posted on how the podcast goes.

To book a free 30-minute consultation with Klein or learn more about her training, visit truthfairyinc.com.

Amy Hourigan is a freelance writer based in Cheshire, Connecticut.

After working remotely during the pandemic, many teams—and their leaders—noted a boost in productivity and greater employee satisfaction. Still, some of the natural collaborations that happen in person have been lost, and some workers miss the camaraderie of the office. Is a hybrid workplace the answer? Here’s what business leaders are saying.

How do you feel about hybrid teams?

“Modern employees expect an element of flexibility in their role. Hybrid working models serve as a great middle ground that provides the ease and flexibility of remote work combined with the innate benefits of in-office collaboration. Adopting a hybrid model also allows a business to retain space to meet clients, conduct training sessions, socialize outside of working hours and collaborate on important projects. However, hybrid teams can struggle to retain the culture and cohesion of fully in-office teams, especially as businesses are still coming to grips with the concept. Additionally, hybrid environments have the potential of creating a divide between those who choose to remain in-office and those who work remotely, resulting in reduced collaboration and feelings of bitterness.”
—Teresha Aird, co-founder and chief marketing officer, Offices.net

“The biggest downside of your team being fully remote or fully in-office is that your business might not have the same adaptability [as others] to the needs of a market or industry. Hybrid workplaces are, by far, the most flexible approach.”
—Joe Coletta, founder and CEO, 180 Engineering

“Employers are finding themselves in need of less office space as the number of people in the office decreases. Not only can a hybrid model save you money on rent, but it can also save you money on office supplies. Refilling the water dispenser, for example, is no longer a ‘typical’ need. Also, employees spend less time and money commuting thanks to the hybrid model, which is wonderful news for people who can’t find inexpensive housing near the office. But the relationship and camaraderie formed at the office may be damaged if employees spend long periods of time apart focusing on their respective jobs. It is even more difficult for marginalized groups in the workplace, such as women and people of color, to have their voices heard. This may result in poor decision-making and the need to alter work methods.”
—Tanner Arnold, president and CEO, Revelation Machinery

“Post-pandemic, hybrid work will be the predominant workplace model. Because there isn’t a standard operating method for businesses to follow, trial and error are unavoidable. Companies will need to understand the benefits and drawbacks of hybrid work arrangements to achieve a successful back-to-work transition. Some of the pros of hybrid working include no commute, fewer distractions, flexibility in terms of when and where you work, better work/life balance, reduced employee apprehension about returning to a public setting, and a fairer workplace for employees who care for family members or individuals with immune weaknesses. However, because they are concerned that their colleagues would see them as deficient since they’re not visible, employees who work from home put in longer hours. This resulted in increased production, but an overburdened culture may pervade the hybrid workplace paradigm if left unchecked.”
—Marques Thomas, owner, QuerySprout.com

“Eliminate the idea that successful enterprises require a brick-and-mortar storefront. Many modern-day companies thrive by working with a mix of hybrid and in-office employees. Several factors contribute to a successful hybrid team, but from what I’ve seen, your team’s purpose has to align with your business goals. Do not strive for survival. Instead, train your hybrid workers to help you reach new heights.”
—Nick Drewe, founder and CEO, Wethrift

“It makes a world of difference to work in an environment where everyone is comfortable enough to achieve optimum productivity. Our culture banks on this. We understood that some of us are comfortable in the discipline and culture of an office environment and others aren’t; thus, we decided to make work simpler by going for the split.”
—Kathy Bennett, CEO and founder, Bennett Packaging

“There are more pros than cons. We have noticed an increase in productivity because flexible workers can use their time better. They can choose to avoid commuting during busy times or focus entirely on tasks without the noise and interruptions of the traditional office environment. Best of all, they can choose to work during the time when they feel most productive, whether it’s in the middle of the night or first thing in the morning. When employees are happier, better rested and less stressed, they work better.”
—Tomek Mlodzki, CEO and co-founder, PhotoAiD

“A hybrid work environment lowers your overall business costs, puts emphasis on autonomy and overall well-being, and fosters collaboration. On the negative side, it is much more difficult to foster strong workplace culture, because there is inherently going to be a divide between in-person workers and remote workers. There is also the greater possibility of cyberattacks or data breaches. Insecure Wi-Fi networks can put your employees at risk of all kinds of cybercrimes, and it’s much harder to regulate cybersecurity practices with remote work.”
—Kristen Bolig, founder, SecurityNerd

“A hybrid workplace allows employees to have more flexibility. It allows people to stay home if they feel sick without stopping their work—or their team. It also allows for in-person meetings or projects, helping workers feel less isolated than when fully remote.”
—Kyle MacDonald, VP of marketing and business development, Force by Mojio

“Hybrid allows workers to plan their schedule around what works best for them and generally leads to more satisfied employees. They don’t feel that they’re being micromanaged, and it automatically instills a sense of trust. On the other hand, there are elements of community and collaboration that will always work best in person. Developing a hybrid working model requires creative solutions and an understanding that no situation is perfect.”
—Sara Bandurian, operations coordinator, Online Optimism

Should you let some job roles work remotely and not others?

“All roles should have the option to work remotely for at least a portion of the job. There are some days where deep work needs to be done . . . in a quiet space like your home, where interruptions are less likely.”
—Zachary O’Dell, founder and CEO, Cooldown

“It’s important to offer all employees the same options regarding remote work. However, the realities of business mean that some roles might require special equipment that can’t be taken home (e.g., manufacturing devices and machinery). Discounting these special circumstances, businesses would be wise to adopt a blanket policy regarding remote working, one that provides each employee with a choice based on personal preference. In the instances where remote working isn’t feasible, offering sweeteners such as flexible working hours and in-office perks can mitigate any bad feelings.”
—Teresha Aird

“Outright banning remote work for some roles could feel punitive. If you’re offering remote work opportunities to some, it makes sense to allow a degree of flexibility for all. Our hybrid work model outlines a schedule that is specific to the work we do.”
—Sara Bandurian

“The pandemic respects no one. Thus, everyone suffers from the consequences of the health crisis in a way or another. It is only just that you allow employees in any role to work in a remote setup.”
—Marques Thomas

“On-site work is only required for roles that require physical presence, such as operating machines or moving items. All other professions can work remotely. Since the most significant obstacle—team communication—can be solved by web tools such as Slack and Zoom, nothing is impossible.”
—Rafal Mlodzki, CEO and co-founder, Passport-Photo Online

What skills do you need to manage a hybrid team?

“The ability to adapt quickly. When dealing with the needs of remote and in-person employees, you need to navigate a world of different and often unpredictable circumstances that can quickly derail even the best strategies. To succeed, you need to be able to pivot your strategy quickly in response to feedback, changes in circumstance, and signs that things simply aren’t working.”
—Joe Coletta

“Effective hybrid managers must possess the ability to trust and develop people, both virtually and in person. While it may be difficult, at least initially, to adopt a hands-off approach to managing remote employees, it’s important to not fall into the trap of micromanaging once systems have been put in place. Instead, make time for one-on-ones to answer questions or to address concerns regarding productivity. Making employees feel seen, valued and heard is particularly important. The best hybrid managers do a great job of outlining the importance of all employees, regardless of whether they’re remote or in-office. Hybrid managers should also strive to be great identifiers of burnout or stress. If an employee’s productivity drops significantly with little explanation, it’s worth checking in with them. Hybrid managers should account for these struggles and offer relevant support, whether additional days off or counseling services.”
—Teresha Aird

“The most important thing is the priority and its deadline, otherwise your folks will get lost in tasks that are unimportant. And if you have someone who is consistently unable to deliver tasks on time, you have enough hard information to counsel or eliminate them if necessary. And you will know who can and can’t handle working remotely quickly.”
—Nancy Jo Seaton, president, Seaton Food Consultants

“Managing a hybrid team requires organization, communication and understanding. You don’t need to know exactly where every employee is every second of the day, but you need to have an idea so you can coordinate meetings and events. A quick daily check-in or even a weekly meeting helps you stay on top of things without micromanaging. It’s also important to understand that no one works perfectly wherever they are. Knowing that your employees are working hard and doing their best, even at home, is key to managing a hybrid team.”
—Sara Bandurian

“While some may believe that emotion has no place in the workplace and that logic should rule, the finest leaders pay attention to how their employees are feeling and engage with them on an emotional level. It’s easy to overlook your team members’ emotions in the hybrid work paradigm, with associates out of the office for up to half the week. Remind your associates that you care about their feelings in one-on-one meetings and at team meetings, and invite them to share their thoughts as a group or privately with you. Emotional intelligence can be difficult to develop because it isn’t a hard talent like generating an Excel spreadsheet, but if you can cultivate your emotional IQ, you’ll be far better prepared to help your team navigate the speed bumps on the hybrid road ahead.”
—Lee Grant, CEO, Wrangu

“There is an element of creativity that needs to be present in all hybrid work managers. This is unprecedented territory, so managers need to be able to come up with new, exciting ways to keep their workforce engaged and on task. It is also critical that you provide comprehensive cybersecurity training for all members of staff, especially for those who are working remotely. The digital threat landscape from cybercrimes and cyberattacks has become much larger over the past couple years, due in huge part to the amount of remote work that’s happening. Managers need to start by understanding the threat, and then investing the time to train staff on how to spot vulnerabilities and suspicious behavior.”
—Kristen Bolig

“In a hybrid team, a manager should set productivity goals—feature X must be completed by the end of the month—and trust their team to accomplish them. Don’t worry about the hours or constantly having employees available for set hours. Harness the flexibility of remote work to allow employees to work the hours that suit them to increase productivity.”
—Scott Hirsch, CTO and Co-founder of TalentMarketplace

“Strong in-person communication skills and organization are must-haves for hybrid teams. You need the ability to effectively communicate with your in-person teams and relay that information to your remote workforce without losing any of the information along the way.”
—Zachary O’Dell

“Managing a hybrid team requires good communication and delegation skills. There is a fine line between under-communicating and micromanaging, and managers need to find that balance. They also need to be able to delegate tasks and projects to people while not favoring/giving opportunities to certain workers over others.”
—Kyle MacDonald

How do you keep culture and collaboration strong when you’re in a hybrid environment?

“We put extra effort into building solid relationships. Our favorite tool is Donut, the app that matches people randomly for off-topic chats. I believe it fulfills our fundamental desire as human beings to meet and socialize.”
—Rafal Mlodzki

“The best ways to keep culture and collaboration strong in a hybrid environment are to promote team building through virtual events, to be consistent when it comes to the communication channels, to continue promoting the company’s values and mission statement, and to make sure remote workers are not treated with any kind of negative bias that could lead to resentment.”
—Joe Coletta

“As leaders, we must be more inspiring and less hierarchical. Companies thrive and grow through a sense of belonging and shared purpose that can fade when employees don’t feel treated equally. For them, it is important that every member feel represented. One of the research studies we conducted showed that 80 percent of millennials and centennials feel less connected to their peers and leaders since working from home, which means remote teams could struggle to connect and engage in the same way as face-to-face teams. To avoid this, leaders must turn to more inspirational forms of leadership that compensate for the lack of social encounters and face-to-face interactions.”
—Tomek Mlodzki

“Have a weekly knowledge-sharing discussion. I have seen wonderful results from creating a set weekly time when my team and employees from other departments are encouraged to come together in a physical or virtual space to discuss challenges/wins that occurred during the week. It’s a popcorn-style informal chat, but it leads to great results including sharing of techniques, lifted spirits and strengthening of interdepartmental relationships.”
—Jessica Zhao, chief marketing director, Spacewhite

“Implement a tool such as Cooldown to recreate those informal conversations that provide such great value no matter where you are. These programs make colleagues feel connected, help them find new ideas and help them solve roadblocks in creative ways.”
—Zachary O’Dell

“One of our key goals when switching to a hybrid working model was to ensure that remote employees never felt isolated and disconnected from the company. In addition to meetings, we hold frequent virtual activities such as online painting classes, movie watch-alongs, murder mystery nights and training sessions. These activities help to maintain a sense of collaboration by providing an informal setting for our employees to work together in a fun and stress-free way. I believe that these activities, coupled with our daily meetings and frequent interactions over chat, have immensely helped with this goal.”
—Teresha Aird

“It’s not impossible if you get creative. Virtual happy hours are a simple way to have people gather. Dividing employees into cross-departmental groups of five to seven people to gather and chat and play virtual games boosts morale and provides an opportunity to de-stress at the end of the week.”
—Sara Bandurian

“Communication is key to a positive culture. Letting your workers know you can’t do it without them is critical. Whether you tell them a client was pleased with their work or that they solved a problem—whatever it is, make sure they understand that the work they perform is critical to the business.”
—Nancy Jo Seaton

“Fostering a good work/life balance for hybrid and remote employees across time zones comes down to managers and each team member being mindful of their designated hours. As projects require a significant amount of interaction, workers must be conscientious of when and how they contact their teammates to avoid a constant sense of urgency. Being considerate of time zones will help keep stress levels low and reduce the chances of human error. For this reason, outlining project tasks with realistic timelines from the outset is essential to a healthy work/life balance in remote work. Setting a clear direction and an even-keeled communication process will help keep your remote workers rowing in the same direction, increase their productivity and give them time to enjoy their personal lives, too.”
—Shaunak Amin, co-founder and CEO, SnackMagic

“One of the best ways to make sure that collaboration continues to be prioritized in a hybrid workplace is to introduce a buddy system. This helps ensure a solid social connection. For a hybrid workplace, a buddy system between a remote and in-office employee would be especially beneficial to help bridge the gap between these two working modes. Make sure also to prioritize one-on-one mentorship between department managers and their direct employees and create a virtual learning community—Slack is a great option—for employees to connect, collaborate and share ideas.”
—Jessica Zhao

“To maintain a happy, productive team, leaders should do the following: Listen like they never have before, and hear not only the words their employees are saying, but also their tone of voice, their energy and what they’re not saying. Show up with empathy: The world is changing at a fast pace, and each person is going through different events. So having personalized communication is important as well. Offer psychological safety—Google’s research on the highest-performing teams showed that when teams have psychological safety and when people feel like they can show up as their true selves and say what they’re really thinking, the team is able to pivot, innovate and grow in today’s dynamic environment. Be optimistic. Leaders need to bring that energy because energy and emotions are contagious. It’s not about negating or ignoring what is happening, but about telling the teams and employees the positive things that are occurring in the company, in the world, in the community.”
—Tia Graham, chief happiness officer and founder, Arrive at Happy

Should you adjust pay for remote workers?

“No. It’s important to maintain parity between in-office and remote workers. Any form of preferential treatment given to in-office employees has the potential to cause major cultural divides within a team, resulting in increased turnover and limited collaboration. Instead, clearly outline to employees that pay will remain linked to productivity and results.”
—Teresha Aird

“Some people may see remote work as a perk, but salary should be standard across roles. The only exception would be if the person was fully remote and living in an area with a radically different cost of living. Mark Zuckerberg used this method when allowing people to remain fully remote. He did so by adjust their salary if their cost of living was lower compared to a competitive city like San Francisco.”
—Zachary O’Dell

“Most workers have made the same salary over the past year while working remotely. Changing that now will cause major problems. Remote workers may feel like they are being discriminated against.”
—Kyle MacDonald

“Adjusting the salary can be cost-effective and sensible, but it can also make employers look selfish, unfair and prejudiced. As a result, employers may experience poor staff morale, poor performance and poor honesty.”
—Katherine Brown, founder and marketing director, Spyic

“No. Remote work only implies a change of the place of work, and not a difference in the scope of the employee’s duties, for the performance of which the employee is entitled to remuneration resulting from the content of the employment contract. Reducing the wages of employees could have a demotivating effect, and dissatisfied employees may start looking for a new job.”
—Tomek Mlodzki

“Paying employees less for working from home is a punishment. If you trust your employees to work from home in the first place, you should trust that they are performing their job to the same standards of someone working in the office.”
—Sara Bandurian

“Continue to pay remote workers the same salary you would pay them if they lived in the city where you are hiring. Companies are saving costs with real estate and can pass those savings on to employees.”
—Graham Ralston, operations, Spot

Notes from a health advisor and employee-manager liaison

I was hired during the pandemic as a holistic alternative to an organizational psychologist. Given that Covid was a particularly stressful time for our staffers, I “saw” (Zoomed with) many of them multiple times over this past year. In so doing, I’ve come to understand staff struggles regarding transitioning to remote work, work/life balance, pandemic fears, and intra-office stressors. I feel fortunate to have had that experience, as it’s helping me to retransition them back into the office or into hybrid work. There has been quite a bit of fallout over this—between both staff and management.

The major concerns I’m hearing are that some enjoyed the flexibility of working from home and are worried about the office being a super-spreader environment should there be another pandemic flare-up. We also have some vocal staffers who feel we should have mandated vaccines. Managers seem to lean toward wanting most if not all employees back in the office for at least half the week. In general, most staffers prefer to stay at home and don’t really see the reasoning in returning to work.

I’ve been the buffer between management and staff in terms of easing these concerns, making sure they are heard and then compromising between parties. We’ve decided to go with a hybrid work structure and have not mandated vaccinations. However, we have asked everyone to file whether they have been vaccinated, when, and with which vaccine (in case there is a variant flare-up). As you can probably read between the lines, Covid is the backdrop for “flexibility” rhetoric. Staff want agility regardless of the pandemic. Management is continuing to struggle to push the envelope of their understanding of a flex schedule.
—Nadia Charif, Coffeeble

Key performance indicators, or KPIs, are metrics that tell us how well we’re progressing toward a goal. By setting, reviewing, reporting and periodically updating them, businesses can make smarter decisions. But which KPIs should you track? And how should you communicate them to your team? To investors? We asked our network for tips.

What KPIs should startups track?  

“Every business and every team are different, so you’ll have to decide which KPIs are the most relevant to you. As a tech officer, I put a great deal of importance on process KPIs like on-time delivery, ticket resolution time and margins. I track, analyze and plan around these to build the best platform for our users and customers. Focus on important areas where you can make the biggest impact through decision-making.”
—Akram Assaf, co-founder and chief technology officer, Bayt.com

“KPIs are hard. Like any skill, [setting and using them] takes practice. There are two reasons: (1) KPIs force you to think precisely about the outcomes you want to create. (2) Measurement in general is intellectually difficult (though slightly easier with the right framework). KPIs are also a muscle that organizations develop over time. If the organization is new to the practice, or just not yet as disciplined as it could be, it should start with first principles and make sure everyone’s aligned on what good KPIs look like. I use these guidelines as a starting point.”
—Eli Holder, founder, principal, 3iap

“The best KPIs for tech entrepreneurs are activation rate, burn rate, cash runway and customer acquisition cost. Activation rate helps track the percentage of users who finish a definite milestone; it’s my best KPI-setting tip. Burn rate showcases how fast a startup is spending money and allows [you] to calculate cash runway and ascertain whether to cut budget or invest more in the business. Lastly, the CAC is the total amount you will spend to achieve one new customer.”
—Eden Cheng, founder, WeInvoice

“Gross margin, specifically for tech entrepreneurs, is a vital KPI. It examines the total cost you incur creating your product and the total revenue generated by its sale. Higher gross margins mean the production costs are relatively lower than the revenue generated.”
—William Cannon, CEO, Signaturely

“As a SaaS startup, we focus a lot on KPIs but we try to narrow them down to a few important ones rather than tracking everything. These are three we track:

• PQLs (product-qualified leads)—potential clients who have been close to purchasing and have a strong urge to try our product
• Organic traffic—this is one we work hard to increase each month
• Conversion rate on marketing materials—this tells us if our marketing strategy is working and whether people are converting from our calls-to-action. If our organic traffic is high (and increasing), are we getting more customers? If not, why?

“[These KPIs don’t] seem like much, but they tell me a lot about my company’s growth month over month and year over year.”
—Lindsey Allard, CEO and co-founder, PlaybookUX 

“The list of KPIs a business should track depends on the operation and the end goals. Some of the more important indicators include conversion rate, gross margin ratio, customer acquisition costs, net profit, days sales outstanding and various levels of traffic, especially website traffic.”
—Karl Hughes, founder, Draft.dev

“The majority of KPI conversations begin with someone asking, ‘So, what might we measure?’ This is the wrong question. Hurrying to implement quick-fix KPIs leads us down a rabbit hole. We end up developing incorrect KPIs or we wind up with minor measurements that don’t help us make better judgments. Meaningful performance measurements begin with quantifiable objectives. Your objective must be stated clearly and precisely enough that you can see how you would recognize it when it becomes a reality. Determine if your present objectives are quantifiable, and then apply this formula to create measurable objectives.”
—Mike Chappell, founder, FormsPal

“The best marketing KPIs are based around demand generation instead of lead generation, because they allow you to better assess how well your marketing, content, website and social media are generating click-throughs and customers. The number of sales-qualified opportunities and their cost allow you to easily report (1) which prospective buyers have the highest chance of becoming new customers, (2) how much it costs to generate them. Those are two numbers any investor should be interested in.”
—Bryan Philips, head of marketing, In Motion Marketing

“We focus extensively on customer satisfaction, and hence we track KPIs regarding the same. Some we track are:

• Customer response times—the average time spent responding to a customer. This is particularly useful if you are segmenting customers according to value.
• New conversations—checking spikes in customer inquiries during specific times of day (especially over longer periods of time) helps you anticipate crunch times. This not only is helpful during the holiday rush, but also helps massively in planning vacations or working disruptions.
• Changes in ticket quantity. Just like for new conversations, the trends in ticket quantity can help anticipate and plan operations.
• Most-used workflow. Review workflows such as saved replies, SLA or automations to help eliminate trouble areas. When a certain command or task is used much more than others, it may be a bottleneck, an overused function or just a useful function that might open further opportunities.”

—Saurabh Jindal, CEO, Talk Travel

“Track your customer acquisition cost; it’s one of the most important metrics you should worry about. Make sure you also track the lifetime value of a customer, because it can help you decide how much you can spend on your sales and marketing efforts. Another great KPI to track is your net profit. It helps you figure out if your company is getting more or less profitable over the years.”
—Matt Barnett, founder and CEO, Bonjoro

“Business leaders should pay close attention to efficiency ratios, also known as cost-to-revenue ratios. There are a few different ratios out there; sales-to-inventory is perhaps the most basic. That’s a good place to start if you want a quick look into how your business is doing. Where you should look to forecast future growth is your sales-to-net-working-capital ratio. If you’re not increasing your sales while your cash and accounts increase or stay the same, you’re leaving money on the table and need to reallocate.”
—Nate Tsang, founder and CEO, Wall Street Zen

What are some KPI best practices?

“Pick one or two measurements that relate directly to each of your goals. While your company has numerous moving elements that are critical to its operations and profitability, keeping track of everything is impossible and inefficient. For one thing, not all metrics are worth keeping track of. Furthermore, measuring too many metrics produces extra effort that is ultimately ineffective.”
—Olivia Tan, co-founder, CocoFax

“Follow the SMART philosophy—KPIs should be specific, measurable, achievable, relevant and time-bound. Define trackable KPIs and focus only on them to avoid data overload.”
—Cannon

“Select KPIs carefully and avoid having an excessive number. What appears to work is the fewer the items, the better. I know people who operate businesses solely on the basis of two or three critical pieces of information.”
—Clark

“Some best practices include making sure KPI goals are realistic; sharing KPIs with colleagues, peers and subordinates; incentivizing your team for hitting KPI milestones and achievements, and continually assessing KPIs and looking for improvements. Don’t forget to update and evolve KPIs with your business.”
—Hughes

“Assign accountability for each KPI. KPIs are a crucial tool for tracking success, but if someone is accountable for tracking and reporting on them, they are more likely to be implemented. An extra benefit is that the responsible party is more likely to want the action to succeed rather than tolerate poor results.”
—Tan

“The best time to communicate your KPIs to your investors and your board is before you start tracking them. By doing it from the start, you ensure that everything is transparent, and you make it easier to see how you are progressing toward each of your goals.”
—Barnett

“Three tips: (1) Set up KPIs the team implementing and measuring them can easily understand. Difficult-to-measure KPIs or consistent modification of KPIs can cause frustration and lead to a lack of end results. (2) Set up a timeframe that is neither too small nor too large. If measured in smaller intervals, KPIs can lead to incomplete pictures, whereas too-long measurement intervals can lead to your missing out on trend changes. (3) Make it easy to understand the results through single dashboards, instead of moving between different screens. This makes it easy to consume and correlate the KPIs.”
—Jindal

“Involve your team, board and investors as early in the process as possible. KPIs are more effective when they’re co-created, [with] both top-down and bottom up [involvement]. Co-creation has two benefits: (a) more input leads to more robust, effective metrics, and (b) it’s much easier for your team, board and investors to buy in to KPIs when they helped define them.”
—Holder

Which KPIs should you include in an investor pitch?

“Customer acquisition cost, customer lifetime value and profit.”
—Barnett

“Customer lifetime value is important to include. Highlighting how you’ll build loyalty to earn repeat business on the individual customer level helps show your business’s unique selling points. It can be difficult to establish this KPI early on, but the challenge is why it’s so essential. The more you strive to create a detailed CLV picture across buyer personas and the lifetime of your business, the more prepared you are to succeed.”
—Reuben Yonatan, founder and CEO, GetVoIP

“Customer acquisition cost, lifetime value, churn, annual recurring revenue, cost of goods sold, gross margin.”
—Tan

“In an investor pitch you want to include KPIs that show the growth and potential of your company, and leave out any that are trailing, within reason. If you leave out something like your net profit, investors’ alarm bells will be going off. Customer acquisition costs, however, especially for an early-stage startup, might be inordinately high and worth leaving out of a pitch. You will get investors who want to dig deep and ask lots of questions, so if you omit something, you’d better be prepared with a response.”
—Hughes