Today's roundtable brought some core issues up for debate regarding media startups that are focusing largely on Content and Community features and expecting to get funded. So, I would like to take some time to offer a broad overview on the topic and some pointers to entrepreneurs who are making the assumption that you can raise $500,000 for such a venture. Be careful!
Misty Gibbs from Austin, Texas, presented Empower Lounge, a concept for a website that focuses on offering inspirational content along four major vectors: work, health, play and giving. In addition, the site will offer some level of professional networking. Misty is folding in a national site, Inspiration Lounge, and a local site, AustinWomen, to bring together her current 10,000-strong subscriber base under the Empower Lounge umbrella.
I probed quite hard about the specific positioning for the site and brainstormed with her on examples of other sites/organizations with related agendas: Women 2.0, ASTIA, Ladies Who Launch, etc. The first two are non-profits, and Ladies Who Launch is still a fairly small-traffic destination, far from a venture-style, high-growth business. The company that has successfully monetized in the women vertical is Glam Media, but their model is of a Vertical Ad Network.
I also pointed out that there is way too much unmonetized ad inventory online, a challenge that is putting digital publishers through serious heartburns. I have shared my thoughts on this topic over and again on my blog, as well as elsewhere on the Web. We've had substantive discussions on the topic with entrepreneurs such as John Ramey, CEO of iSocket, Kenny Rosenblatt, CEO of Arkadium, and Jay Samit, CEO of SocialVibe, who all attest to the downward pressure on CPM rates and the challenges of low fill-through.
In addition, ad networks taking large cuts of ad revenues put further pressure on the publishers. Vikrant Mathur, CEO of iFood.tv discusses that at length in the blog post here. Vikrant is running a bootstrapped publishing company, and is a 1M/1M premium member. In 1M/1M, we happen to have a great deal of experience dealing with such companies and their challenges.
I don't think I got through to Misty, though. She is 'confident' that she can raise $500,000 for this website right away. Well, good luck, Misty! I hope you are right.
However, for other entrepreneurs who may be listening a bit more seriously to the challenges facing the industry, I would also like you to invest some time and energy in assessing the 'fundability' of your project before making assumptions like this. You can use the 1M/1M Self-Assessment for that purpose. Also, here is a short video on the issue of fundability, addressing some questions that we hear often from entrepreneurs.
In conclusion, I would like to highlight the fact that entrepreneurs really should STOP focusing so much on funding and start worrying more about how to build a sustainable business. Less than 1% of entrepreneurs actually ever get funded. The other 99% who go out to look for financing get rejected. But there is no reason to believe that you cannot succeed even without funding. So, my advice to Misty is to focus on the business fundamentals of how to get to revenues and profits within a realistic time frame. Here is my video message to all entrepreneurs who are focused on raising money and are facing difficulty: The Other 99% (Entrepreneurs).
Also, Titash Neogi from Pune, India, pitched Themeefy, a publishing platform for self-publishers that helps users create, curate and publish books, magazines, etc. I happen to know a great deal about this business because of my own long involvement in publishing. So, we dialoged about the product marketing issues of what constitutes a complete product in this space. For instance, HTML books are simply not enough and all the traditional formats of e-books need to be supported. Similarly, self-publishing platforms like Amazon's CreateSpace need to be supported; iPad apps need to be supported.
In general, when you come to the market with a solution, it needs to meet the needs of the contemporary customers. The proposed solution is an inadequate one for serious book authors to want to use. It is, however, being used for free by about 5,000 educators, travel book authors, etc., which is a good start. But people using your product for free is one thing, getting them to actually pay is quite another. And that's where Themeefy will need to develop a product roadmap and business strategy that takes this minimum viable product and builds a sustainable business out of it. I will be happy to help him accomplish that.
You can listen to the recording of today's roundtable here. As always, I would very much like to hear about your business, so let me invite you to come and pitch at one of our free 1M/1M public roundtables. We will be holding future roundtables on the following dates starting at 8:00 a.m. PST:
Thursday, January 26, Register Here.
Thursday, February 2, Register Here.
Thursday, February 9, Register Here.
Thursday, February 16, Register Here.
Thursday, February 23, Register Here.
Please note, next week's roundtable will be co-hosted with Jacksonville Startup Weekend and a couple of hundred entrepreneurs are participating in this weekend's event in Florida. On January 26, the top five will be presenting at the 1M/1M roundtable.
If you want a deeper relationship with me, you are very welcome to join the 1M/1M premium program. If you have any questions about the program, please, first study the website, especially What to expect from the 1M/1M premium program and the FAQs. If you have additional questions, please email me, and I would be very happy to respond. Please note that I work exclusively with 1M/1M entrepreneurs.
I also invite you to join the 1M/1M mailing list for the ease and convenience of getting updates. This way we can stay in touch, and it will help you to decide if 1M/1M is a program for you.