Thursday, May 29, 2008

Valuing a Startup Culture

Fuzzwich Co-Founder Rob Fitzpatrick

What does it take to get a promising social media startup or any startup for that matter off the ground? In the absence of capital, you need technical expertise along with knowledge of how to make a product scalable, how to market it and how to pitch your idea to investors. And you need a supportive environment that values a startup culture.

Startups have been on my mind after recently attending Startup Riot and Startup Lounge here in Atlanta. I had gone to both events in an effort to identify companies that were using social media in their business models or as their principal marketing strategy.

As of late, I am on a mission to profile companies that have embraced social media. My goal is to help build awareness and ultimately foster widespread adoption of social media here in Atlanta. Our jobs as PR professionals are so much easier when we can point to local companies that are using it effectively.

At Startup Lounge, one of the interesting companies I came across was Fuzzwich (blog). Fuzzwich lets users create and publish animated shorts. More than a tool for those with a casual interest in animation, the real potential is how Fuzzwich helps companies extend the user experience. From a social media perspective, customers can use animation to creatively interact with their favorite brands and virally spread their creations online.

Fuzzwich is based in San Francisco. It was until recently an Atlanta based company. Now, this is not going to be posting about a company that got away, though it could be. Its co-founder Rob Fitzpatrick is a 2006 Georgia Tech graduate who realized that there was more opportunity in San Francisco.

Rather Fuzzwich is a story about a company that discovered the power of social media to make a business model scalable. It’s also a story of how they made their discovery and what startups need to do to get the ball rolling.

Fuzzwich is succeeding in part because of a program known as Y Combinator.

Y Cominbator is a venture fund, which focuses on seed investments to 2-4 person startup companies. It offers financing as well as business advice and other opportunities.

Twice a year (once in Boston and once in Mountain View, CA) Y Combinator selects a group of companies to help finance and advise. In exchange for a small ownership stake, participating companies are given a modest stipend. Somewhat like a bootcamp for startups, the three-month program is intense. As participants work developing their business models, they receive technical and legal advice and learn how to pitch ideas and make products marketable.

Beyond providing important skills, the program builds an esprit de corps and the confidence needed to excel in the world of entrepreneurs.

It is at Y Combinator that Rob and his 3 co-founders chucked their original business model and came up with the idea of a social application that lets others make their own animation. Initially, their idea was to create games as a way to promote music, “but the idea was not scalable.” As Rob confided, they “never could have done it without Y Combinator.”

After Boston, Rob and his partners returned to Atlanta. Besides the Georgia Tech connection, Rob and Devin Hunt (one of the co-founders) shared a Turner connection. Rob had worked at GameTap and Devon at Cartoon network. But their momentum stalled, and they made a decision to move. Rob went first and “grabbed a one-way ticket to San Francisco.” The others soon followed. In a very short time, they had “financial stability” in a supportive culture.

As Rob said, “Walking down University Avenue in Palo Alto, there is no getting away from the startup culture…In Atlanta, everything is distracting you away from doing a startup. In Silicon Valley, everything is distracting you toward one.”

Today they are building a client base and trying to achieve the startup dream.

I am not sure if a Y Combinator in Atlanta would have kept Rob and Devin from moving. But it would certainly provide skills and mentoring to help give startups the confidence they need to launch new ideas. Equally important, it would help create a stronger sense of community.

I suspect most advocates of social media would benefit from a similar supportive environment in learning how to pitch initiatives to a reluctant management.

There is, however, a broader lesson from Fuzzwich and Y Combinator. Ideas don’t exist in a vacuum. In pitching social media to companies, I am realizing more and more that what exists outside the corporate walls influences what happens within. A strong community supportive of new ideas and entrepreneurialism will go a long way in helping larger companies embrace new ideas and entrepreneurialism.

Let me get back to you.

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Thursday, May 22, 2008

Kaneva: Turning a Virtual Community into Reality

Kaneva CEO Christopher Klaus

Last week Georgia Governor Sonny Perdue signed legislation that will give entertainment industry production studios up to 30 percent tax breaks for business conducted in the state of Georgia. Georgia is the first state to pass this type of incentive for the gaming industry.

This new law (the 2008 Entertainment Industry Investment Act) is a big win for those wishing to make Georgia a video gaming and entertainment capital. It is also a personal victory for Christopher W. Klaus, founder and Chief Executive Officer of Kaneva, an online social entertainment world. A strong advocate of video gaming, he was instrumental in helping make this law a reality.

Klaus is one of Atlanta’s best-known success stories. His company Internet Security Systems was sold to IBM in 2006 for more than a billion dollars. He is also part of a contingent of Atlanta-based CEOs who are embracing social media as a promising business model.

Kaneva is Latin for “canvas.” Like the better-known Second Life, Kaneva combines elements of social networks and virtual worlds.

And like Second Life, Kaneva members create digital versions of themselves — avatars — and then meet up in a modern day 3D world. Every Kaneva member gets a Kaneva City Loft — their own 3D space – where they can decorate and furnish in their unique style. They can bring their favorite videos, photos, music, and games, and watch them on their 3D televisions. Friends interact in a loft or public and can chat in real-time.

But while Second Life shies away from the word “game,” Kaneva does not. Kaneva is very much about entertainment and is steeped in a gaming culture. In fact its co-founder Greg Frame is also its Chief Gaming Officer.

To be sure, virtual worlds are still in their infancy. Awareness is very limited, and adoption is not widespread.

But Klaus sees opportunity. Online gaming is a multi-billion dollar industry. The research firm Gartner predicted last year that 80 percent of active Internet users will engage in a virtual world by 2011. That translates to approximately 250 million people.

Second Life has enjoyed the lion’s share of media attention, but pardon the pun, it is not the only game in town. Kaneva also hopes to be a driving force in this space.

Kaneva Is Self-Funded

So how did get Klaus attract investment dollars for this venture? He didn’t. Kaneva is self-funded. Now very few investors have those kinds of resources at their disposal. Even fewer would invest their own money.

But Klaus has a vision of “embracing the new era of content creation and harnessing the power of the Internet – to democratize entertainment and provide opportunities for everyone from artists to consumers to share and interact with entertainment online in an entirely new way.”

Even at ISS, he never abandoned his interest in video games that began growing up in Sarasota, Florida. While ISS was formed to protect consumers from the Internet, Kaneva is intended to make the Internet fun and interactive.

At an MIT Enterprise Forum on virtual worlds in Atlanta earlier this year, Claus likened Kaneva to social networking sites like Facebook and MySpace. These networks are about communicating and connecting.

“I think virtual worlds have historically served the purpose of fantasy games. What we are seeing now is a new form of communication that is more emotional than anything we have seen on the Internet.”

Klaus makes a distinction between what he calls Video Game 1.0 and Video Game 2.0. The 1.0 world is a top down publisher model. It is not social. The 2.0 world is. Klaus sees Wikipedia and YouTube as models – ones that are more collaborative and emergent, where individuals have the power to create and post content.

Klaus recognizes that social media is not a core business for most companies, and blogs let alone virtual worlds are still outside the realm of possibility for most companies. But he strongly believes in its power to transform online interaction and change the way business is done.

Doing Business in Atlanta

As for doing business in Atlanta, Klaus is a staunch supporter of GA Tech. He feels that VentureLabs and the Advanced Technology Development Center are breeding grounds for growth. He also believes that the new legislation will attract investment and talent. He sees students at both GA Tech and Savannah College Art and Design as “hidden gems” to attract top notch engineering and design talent. They provide a valuable resource pool for a fledging industry to grow.

Especially in Atlanta, nothing breeds success like success. With ISS, Klaus was able to generate awareness and talent in the Internet security space. He is hopeful that with Kaneva, he will do the same for social media and virtual worlds.

Let me get back to you.

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Monday, May 19, 2008

Startup Riot: Building a Tech Community

This morning entrepreneur and innovator Sanjay Parekh (blog) is starting a riot in Atlanta. Dubbed Startup Riot, this first-ever, day-long event reflects Sanjay’s continued role as one of Atlanta’s biggest start-up cheerleaders and tech community advocates.

The event features more than 50 companies. Each is given three minutes and four Power Point slides to make its pitch to an audience of companies, investors and job seekers.

Beyond creating connections, the goal is to generate awareness for Atlanta’s tech community. He doesn’t expect to make money on this venture. For him “success means at least one company gets something out of this – either money, employees, or customers.”

Highly successful in his own right, Sanjay considers himself “very fortunate.” As founder of Digital Envoy, he wants to “save workers from cubicle farms” and believes it is “my responsibility to give back to the community.”

Atlanta’s Tech Community: Challenges and Opportunities

Atlanta is not alone in its aspirations to build a tech community. A lot of really smart, successful people like Sanjay in other cities have spent a lot of time trying to figuring out how to build and sustain a Silicon Valley South.

As Michael Arrington wrote about Silicon Valley in Techcrunch: “Students with a good idea are surrounded by people who want them to succeed, who are willing to give them money to support their ideas, and then to help them grow it. There is no where else in the world quite like this place.”

We in the tech community long for the Valley’s concentration of technology companies, its commitment to innovation, and its tolerance for risk and experimentation. But we are not there yet.

And it’s not for the lack of trying. In Atlanta, there are numerous efforts to spawn and sustain a technology community. Technology Association of Georgia (TAG) acts as a catalyst to foster an environment for technology development. The Atlanta Metro Chamber of Commerce appointed David Harnett as its vice president of technology industry expansion to focus on increasing the presence of the technology industry clusters in Atlanta. The Advanced Technology Development Center (ATDC) (blog) was named by BusinessWeek Magazine as one of the top incubators in the country. Georgia Tech is one of the nation’s premier engineering schools.

Or just ask Scott Burkett. An entrepreneur and Atlanta technology advocate, Burkett is a co-founder of the Startup Lounge. Its mission is to support the investment process in the development of emerging high-growth companies in Georgia and the southeastern United States.

“One of the things Atlanta really ‘gets’ is technology. We have a very robust technology community here already. However, what we’ve always lacked is a robust early-stage capital market, and that has kept us from turning the Atlanta scene into a ‘thing’ for any extended period of time.”

Through efforts like Scott’s Startup Lounge and Sanjay’s Startup Riot, and other concerned citizens, Atlanta is making headway.

Burkett told me: “There is a new emerging wave of angel investors and entrepreneurs here now. A vibrant community of early-stage risk-takers is beginning to flourish here and to spread out all around the city (and the state for that matter).”

Beyond the efforts of these advocates, this movement is being made possible by the nature of the technology itself — social media, lower barriers to entry, and open source software.

I personally share this sense of optimism. I came to Atlanta seven years ago to work at EarthLink right after the Dot Com bust. As an advocate of social media, I see a broader vision beginning to emerge. It will take time to break old habits and make ideas matter as much as relationships. We can’t compete with Silicon Valley on its number of entrepreneurs, but the robust attendance at Mike Schinkel’s monthly Atlanta Web Entrepreneurs Meetup shows there is a desire for change.

Like Atlanta’s ever changing skyline, the business environment is evolving. As Scott Burkett predicts, “In a year or two, you won’t recognize the Atlanta technology community.”

Let me get back to you.

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Wednesday, May 14, 2008

Blogger of the Week

I am honored to be named Blogger of the Week by Social Media Today.

Let me get back to you.

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Tuesday, May 13, 2008

Enterprise 2.0 – Building Consensus

Yesterday I wrote about the limits of vision and its role in the enterprise.

Now there are some that say that vision is exactly what is needed to transform corporate cultures resistant to web 2.0. But framing new media around visionary buzz words such as transparency and decentralization can sometimes distract and alienate those in management more accustomed to control.

At the Web 2.0 Expo last month, I had a chance to hear David Carter address his vision of Web 2.0 and its impact on the future direction of the enterprise. David Carter is CEO of Awareness, which helps companies build and operate branded Web 2.0 communities.

As he wrote to me in a follow up email,

“Enterprise 2.0 is about using Web 2.0 tools and practices, but in a way that decreases the tension between the users and the corporate IT Department.”

And right now there is plenty of tension out there across the enterprise.

With concerns about security and Sarbanes-Oxley compliance, IT is understandably resistant to loss of control and decentralization. Its role is to protect the kingdom by keeping intruders out and data in. IT is all about accountability, ROI, department buy-in and structure.

At the same time, as David Carter points out, other departments have issues as well. HR has concerns about compromising privacy and creating the potential for a hostile work environment. Legal is concerned with limiting liability and avoiding lawsuits that may result from a misuse of data.

On the other hand, business units are under extreme pressure to conquer new markets by any means and anywhere possible –- whether it’s inside the firewall or data sources and applications outside of it. They are about frictionless participation and customer engagement. Similarly, employees want easy to use tools to share information and manage connections with their colleagues.

With all this tension and competing interests, where do vision, values and the big picture fit in?

Well clearly they can’t be ignored, but in challenging times, companies may need to be “more tactical” when it comes to social media as Stan Anderson, managing partner at TechDiscovery said to me.

TechDiscovery develops custom applications for software and technology-based services companies. In a tactical world, it is not about storming the Bastille or tearing down the company firewall. It’s about finding solutions that address quarter by quarter goals. In this environment, Anderson believes the business units will win out. IT may not be 100 percent happy, but at the end of the day, the compromise may come down to five words: “I can live with that.”

The Take Away for Corporate Communications

So what does this mean for corporate communications professionals?

The adoption of enterprise Web 2.0 tools helps pave the way for the adoption of web based communications tools. It raises the comfort level for decentralization and collaboration — the buidling blocks of social media.

I truly believe that corporate communications can play a pivotal role in managing the benefits of Web 2.0 technology. At the most basic level, we can create and implement the tools needed to communicate externally and internally to the various stakeholders. Equally important we can help the enterprise put Web 2.0 into the context of an overall business strategy and company culture.

But this responsibility requires us to be sensitive to the competing needs across the enterprise. After all, our job is to help reduce tension not heighten it. That is something we can all live with.

Let me get back to you.

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Monday, May 12, 2008

Enterprise 2.0 — Putting Vision in Perspective

When it comes to new media, I often see practitioners fall into two camps – techies and non-techies.

I was reminded of this dichotomy last week at our Technology Association of Georgia Enterprise 2.0 Society Speakers Series here in Atlanta. The presenters were from Brighthouse and their discussion centered less on technology and more on the power of new media to unleash new ways of thinking, communicating and marketing.

Geoff Livingston in a recent article exploring the value of a Chief Blogging Officer position mirrors that point of view. “The problem is that too many people focus on the actual tool: the blog.”

So in the world of techies and non-techies, where do you stand?

For the most part, techies focus on the features and tools. Non-techies talk about community, conversations and strategy.

At their best, techies guide us through the maze of new applications, while non-techies give us context. At their worst, techies get bogged down in the minutiae, and non-techies soar into generalities.

In their passion, both sides are self-proclaimed evangelists offering competing visions for a communications practitioner. One talks about the primacy of the message, and the other talks about the tools to deliver it.

Professionally I prefer the term advocate. Evangelism sounds too extreme. Trying to keep a foot in both camps, I am either a really smart consensus builder or a just plain wishy-washy generalist.

Especially in the context of Enterprise 2.0, I say enough with the Age of Aquarius (primacy of community) and — to borrow a title of a book from Ray Kurzweil — the Age of Spiritual Machines (primacy of technology).

In the rough and tumble world of today’s enterprise, perhaps it’s time to take the “new age” out of new media and give vision form and function. Vision by itself can only take you so far especially when management needs a business case for adopting social media.

Sometimes as Brighthouse CEO Joey Reiman suggested to me, it does take one voice with passion and vision to get the ball rolling. But at the same time, I don’t believe blogs, social networks and community building will be widely embraced in the business world until we start grounding web 2.0 in practical terms that address real business objectives.

So in the context of today’s enterprise, non-techies and techies alike can benefit from a little perspective. Perhaps we should focus on how we are going to reach the millennials  (the generation Y who are tomorrow’s consumers) and not millenarianism (how we are going change the world).

Let me get back to you.

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Friday, May 9, 2008

When the CEO Comes Knocking: 10 Steps for Achieving Social Media Success

2008 Georgia PRSA Chapter Annual Conference

Scenario: Your client or CEO has just called you into his or her office and told you that he or she wants to understand social media and determine its value to your company. He or she has given you 45 days to come back with your recommendations.

What do you do? Where do you start? On what basis will you make your recommendations?

That’s the question that PR Newswire’s Director of Emerging Media Michael Pranikoff, Toby Bloomberg, and I posed to a roomful of public relations professionals at the Georgia Chapter of the Public Relations Society of America’s Annual Conference.

It’s the same question that many of us now face. Over the course of the discussion, we addressed a 10-step process to achieving social media success. Click here for the deck we created.

Toby, Michael and I broke the discussion down into four stages: Learn, Listen, Plan, Participate

Step 1: Define social media
Step 2: Evaluate Tools

Step 3: Conduct an internal employee audit
Step 4: Conduct an external audit to evaluate discussion about company and your competitors on the web

Step 5: Determine initiatives and tools that suit your corporate culture and customer base
Step 6: Establish metrics to evaluate success
Step 7: Determine cost and resources to implement program
Step 8: Determine implementation timetable
Step 9: Secure consensus from a wide employee cross section

Step 10: Set expectations

The audience was composed of professional with various levels of expertise.

The focus tended to remain on tools. As has often been the case, we social media advocates take for granted the level of knowledge that PR professionals possess. The audience had questions about twitter, RSS, wikis and, and few hands went up when we asked them whether their company had a blogging policy.

Few were using RSS in their company’s newsroom site. Another claimed he was podcasting. Toby had to gently inform him that his audio recordings were not podcasts as there was no ability for listeners to subscribe or download them.

Michael does a lot of these types of briefings. He is on the road nearly 70 percent of the time visiting schools, companies, clients and members of the media. The audience was asking what everyone is asking. He sees this lack of awareness as a huge room for growth.

Moving from tools to broader recommendations, we offered up the following questions for PR professionals to consider:

Internal Audit Questions

Do you have management support? CEO? Legal? HR?
Do you have employee commitment to remain engaged?
Do you have support from IT?
Who owns the content?
Do you have the authority to direct employees and mandate changes?
Have you instituted a blogging policy?
How will you measure ROI?
Do your recommendations reflect the company’s brand and culture?

External Audit Questions

Who is your target audience?
Do your recommendations reflect your customer demographic?
How will you publicize and build participation?
Will it be moderated?
How will you handle negative, inappropriate, or off topic comments?
How will you direct questions to the appropriate company representative?
Do you have safeguards to minimize spam?
Do you have a SEO strategy to maximize web hits?

My advice: When responding to a CEO, the focus shouldn’t be the tools. Make simple recommendations. Focus on ROI and how social media can achieve specific business objectives. And better yet, don’t wait for the CEO to come knocking. Take a leadership role and offer to provide a set of recommendations even before you are asked. It is a real opportunity to position PR strategically.

Let me get back to you.

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Monday, May 5, 2008

Vitrue – Branding the Social Media Experience

Vitrue CEO Reggie Bradford is bringing social media to the brand experience

It seems only appropriate that a social media company with a mission to “empower brands to engage with consumers —effectively and safely” would be headquartered here in Atlanta.

After all, Atlanta is home to the biggest and best-known brand in the world — Coca-Cola. But where Coca-Cola has roots more than a century deep in the traditional marketing and advertising worlds, Vitrue (Vitrue blog) was founded in 2006 to help companies address the major shift in the way consumers now interact with brands.

As they state in their Company overview:

“Consumers are now willing to engage in a dialogue with companies that vigorously pursue them. The reason for this shift? Social media. In order to thrive in today’s rapidly changing marketplace, savvy businesses know they must unlock the full potential of social media.”

And for this reason, I selected Vitrue as my first profile on Atlanta-based companies who are choosing to embrace social media as a business model or principal marketing strategy.

I am interested in the challenges and opportunities that social media companies outside Silicon Valley face. In many parts of the country, the reality has not caught up with the hype. There is still a lot of concern and unfamiliarity out there.

“Blank Stares”

Founder and CEO Reggie Bradford admitted that starting a social media company in Atlanta wasn’t easy. At first when he tried to explain what Vitrue did, he got some “blank stares.”

Still, Atlanta is home to numerous companies who are building businesses that are taking advantage of new ways of communicating and interacting with their customers.

“From the start I didn’t say I wanted to get into social media. Vitrue was a story about brands not technology.” To help clarify, Bradford described his Company as a “YouTube for brands.”

As much a technology company as a branding company, Vitrue is working with clients around the country to leverage the power of social media.

But nothing breeds success like success

Bradford has an impressive track record. With a grounding at the Miller Brewer Company, he served as Chief Marketing Officer at WebMD, which later became one of the world’s leading Internet destinations with over 38 million unique visitors a month. Bradford also served as President and CEO of N2 Broadband, the leading provider of open-platform, on-demand entertainment solutions.

Bradford’s success has led to funding for Vitrue from General Catalyst Partners and later from Comcast Interactive Capital and Turner Broadcasting.

With plenty of experience with technology and launching brands, Bradford sees “the future of the web is video and short length pieces.”

Not only is the format and forms of distribution changing, so is the relationship with consumers.

“More and more brands are co-creating content. Winners understand this; the losers don’t. Basically you have to give up control to get control. Let brands take advantage of the passion. Every brand needs a place or a community.”

In their book Groundswell, authors Charlene Li and Josh Bernoff write that companies don’t control the brand. This new relationship creates a dynamic that fosters deeper engagement. But with this new ownership arrangement comes unpredictability and uncertainty.

Through platforms like YouTube and Myspace, consumers are recontextualizing the brand experience in ways that advertisers can’t possibly anticipate. (Yes, advertisers welcome when consumers post videos that profess their love for a product, but not when that same video is placed among other videos that advertisers find offensive.)

Brands are expensive investments. Many still think that they should not be left in the hands of the consumer. So how do you permit authenticity and deeper engagement without losing total control?

Creating Brand Safety

Bradford thinks he has come up with a solution. It’s about brand safety.

Vitrue has engineered a technology platform built with their customers’ diverse social networking needs in mind. Its modular design provides the flexibility to keep ahead of a rapidly changing social media market. Vitrue can add features and functionality without disrupting service.

Their platform has enabled brands like Chic-fil-A for example to help consumers connect with each other through online social networking and user-generated video. Vitrue can create and host a mircosite for their clients. Unlike on YouTube, the brand experience stays on their clients’ sites and remains more contained. Customers can post video to a company site and also syndicate it to their personal site. Conversely, visitors to a personal site can be redirected to a company site.

There is still community, still authenticity, but the client has a higher comfort level with a company sponsored social media application.

For its efforts, Vitrue was named to Business 2.0′s “Next Net” Top 25 in 2007.

And so across the country away from the “clubbiness” of the Silicon Valley and the competition for mindshare, talent and capital, Bradford is confident he can carve out a social media niche here in Atlanta. While they may lack ready access to a large talent pool, Vitrue serves a market with one of the largest concentration of Fortune 500 brands in the country.

His Atlanta connection may serve him well as more companies begin to experiment with social media.

Let me get back to you.

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Thursday, May 1, 2008

On Wikipedia’s Conflict of Interest Policy

I wanted to share a Wikipedia moment from last week. I was at a small reception hosted by LookSmart for Jimmy Wales at a local restaurant in San Francisco. He was on hand to talk about his new search strategy and field questions from the audience.

Afterwards, I approached Jimmy about a frustration I have with the Wikipedia Conflict of Interest (COI) policy. And he was amenable to listen.

As most PR professionals know, the COI prohibits corporate representatives from making additions and edits to company pages on Wikipedia. My point is where you work shouldn’t necessarily disqualify you from being a contributor.

Now I know that companies can spin the truth or just plain misrepresent it, but individuals unassociated with a company don’t have a monopoly on truth or accuracy either.

There are times when companies should be able to insert changes without going through a complex process. And those changes should not be relegated to a side bar that most users will not see or look for.

So halfway through my plea Jimmy’s cigar goes out. By the time he successfully relights his cigar, he agrees that I have a point, admitting that he himself has experienced similar challenges. I don’t expect any immediate change to the COI policy, but at least that evening I had won a moral victory for corporate communications professionals everywhere.

Let me get back to you.

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