Focus Groups: Making Money Off Youtube

I'm seeing this sort of pitch a lot lately:

"We are the next such-and-such company" or "we take such-and-such company concept to the next level" or "unlike [insert billion dollar website name here], we have added a killer feature and thing-a-ma-jig that changes the game."

Fill in the blanks with the buzz words of the moment and I'm sure you'll get the idea. Why the sudden urge to jump into certain markets rather than others? Well, call me crazy, but for many an amateur, I believe it might have to do something with dollar signs in the press. (Let's just say $50 billion for the sake of example.)

What disturbs me about this trend is the sheer number of people that are concentrating on web companies built for "investment dollars" or "ad revenue" rather than built for immediate income-generation. Sure, Web start-ups are inexpensive to launch, but I still contend that to stay in business they must earn money. Not every website is going to get an investor onboard or a strategic acquirer interested—not by a long shot—and you have to at least afford Ramen noodles to sustain yourself.

When I partnered with a fledging start-up to help build a Web 2.0 company back in the early 2000s, I quickly fell victim to a lot of this same hype nonsense. Except at that time, it wasn't "social networking", it was video sharing. YouTube had just started to come about and I wanted in the game. Like every other Web start-up in that space at the time, we too were "revolutionary" and a "game-changer."

Only problem: we had no immediate revenue model, based our financial forecasts totally on sponsor and ad revenue, and could not keep up with the site traffic. Investors wouldn't touch us because we were still too small, yet expenses kept piling up. In the end, the company folded and tons of money was lost (and probably is still being paid off the original founders' credit cards today.)

I certainly don't want to discourage the brilliant Web engineers out there whose business models are sound; however, I do want to discourage the other people out there (yes, you know who you are) from jumping on the "$900 million bandwagon" simply because you think your idea is better, cooler, or has more features than a site that already exists. In fact, if you have the word revolutionary in your pitch, just go ahead and wipe hard-drive clean right now.

Think before you code. Just because you can build something, doesn't mean you should. Time is your most valuable asset and you want to make sure that the enterprise you are committing yourself to has a real chance of providing you with sustainable revenue. You must truly understand how your business will make real money before you bank on some unrealistic expectations concerning traffic. If you are making money, the potential to raise investment dollars becomes all the more real.

Remember, it is never a smart bet to try to build an "acquisition" rather than build a business. After all, if your business cannot survive on it's own you'll need to exit the company way before any exit strategy can even occur—because you'll be bankrupt.

Silicon Prairie News gives its start-up community a voice

You’ve heard of Silicon Valley, and likely Silicon Alley, but have you heard of Silicon Prairie?

Silicon Prairie is geographically hard to define but it’s there– somewhere between Chicago and Colorado, Dallas and the Dakotas–and it’s getting noticed because of one local news source The Silicon Prairie News.

And the Prairie’s entrepreneurs can thank one man, a native Nebraskan named Jeff Slobotski, who decided he wanted to write about the tech sector. After a few days of writing about California’s burgeoning scene, he decided to refocus his efforts on his own community. Recalling the words of my college professor, if you’re going to be a writer, write about what you know.

Slobotski decided to give his community a voice and that voice goes by the name of Silicon Prairie News. He called on the skills of his then friend, now CTO and co-founder Dusty Davidson, who runs BrightMix, a small, local software company. In July 2008, Slobotski started blogging as a hobby, interviewing local entrepreneurs on his lunch breaks and publishing stories at night.

In June 2009, Slobotski took on Danny Schreiber full time as SPN’s Managing Editor. Schreiber’s favorite players in the SP scene? Dwolla, a mobile payments service that is giving PayPal a run for its money and RockDex, a start up that is capturing the social metrics of plays on YouTube, LastFM and MySpace for musicians.

The boys had a lot to write about, they just needed people to listen. Slobotski, Davidson and Schreiber decided to throw an event to grab the world’s attention; they called it Big Omaha.

Last year’s Big Omaha was a success with over 550 people from 20 states including Foursquare’s Dennis Crowley, Charity: Water‘s Scott Harrison and Zappo’s Tony Hsieh. SPN was suddenly profitable, making money off of sponsorships and ticket sales from the event. Soon they had local businesses and Omaha’s Chamber of Commerce knocking on their door, asking if they could advertise on SPN. The readers came.

SPN currently has 4 full-time employees, 12 freelance writers and 3600 RSS feed email subscribers. At the end of November, the site averaged 25,000 unique visitors, 45,000 page views, and was growing at 10% a month.

“If it weren’t for Silicon Prairie News, there wouldn’t be a start-up scene in the mid-west. They are our voice. Their existence reinforces our culture.” says Ben Milne, the CEO of Dwolla.

Monday through Friday, expect fresh, daily content focusing on Silicon Prairie entrepreneurs like Dwolla and Hudl, an online coaching application, recently named by Inc. magazine’s 30 under 30. On the weekends, to keep traffic flowing, they’ll repurpose TED Talks or big interviews from other more well-known tech blogs.

“Our first goal is to highlight the story, the angel investors and the entrepreneurs. Our second goal is to tighten, build and connect the community and ecosystem here,” says Slobotski. “There’s value in what we’re doing by reporting on it but our events build communities that get people talking and brainstorming ideas together.”

The overall scene in Silicon Prairie is comprised of a lot of consumer related tech starts up. With the large amount of capital potentially available (read: Berkshire Hathaway and everyone else who is connected to Warren Buffet by one string or another), the scene could be well funded with the right connections.

This coming week, they will launch Silicon Prairie News’ Kansas City bureau, of which Kansan Royce Haynes will be involved. Haynes, like many SPN readers found the site through hearing about Big Omaha on Twitter. “I didn’t expect something of this caliber to take place in Omaha, Nebraska,” he says, “It’s going to be great to now be a part of it and to able to highlight all of the entrepreneurial activity going on in Kansas City.”

Interested in getting in on the Silicon Prairie fun? Save the date for a sweet SPN party Sunday night at SXSWi in March and a Big Omaha style event in Des Moines, Iowa this fall.

benchcraft company scam

Focus Groups

Thursday, February 17, 2011

Making Money Off Youtube

Silicon Prairie News gives its start-up community a voice

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

Pilot <b>News</b>: Bello Takes on 'Prime Suspect,' A 'Lostie' Returns <b>...</b>

Obama to Friend Zuckerberg in San Fran - FoxNews.com

Lost: Internet Marketing <b>News</b>, If Found Please Let Us Know

No comments:

Post a Comment

Followers

Blog Archive

About Me