Nicely put. On Wed, Jun 8, 2011 at 3:10 PM, Geoff McQueen - Hiive Systems < geoff.mcqu...@hiivesystems.com> wrote:
> <rant> > > > > To get to 1 million users for an internet product in the US, you need to > convince one in 260 people to come on board (and keep them coming back), as > there are 260M internet users in the US. > > > > In China, you’re looking at a 400:1 ratio. > > > > But in the UK, you need to convince almost one in 60. > > > > France is the same. > > > > Germany is slightly better. > > > > In Australia, you need to one in 13 people. > > So, catch the bus to work this morning, and look around. If you can’t see > how you can profitably get 6 of those passengers – and of course extrapolate > that over every bus, in every city, and then throw in the cars and the rest > of it – to use your platform, you’re not going to make it to a million > users. > > > > While there are exceptions – and they deserve tremendous respect for > overcoming the odds – I think you can only make a true B2C web play work > (and I’m not talking about marketplaces/exchanges, I’m talking advertising > based revenue models) in one of four cities in the world: San Fran, > Shanghai, Mumbai (or perhaps Bangalore, I’m not super familiar with the > entrepreneurial and capital scene in India) and perhaps New York. Everyone > else is at a massive disadvantage. > > > > Platforms for distribution like app stores (and the monetisation > opportunities they provide through up front purchase, in app purchase, etc) > are changing the economics of doing things in tech for consumers (they can > of course also be ad supported, but the global homogenous marketplace means > it doesn’t matter as much where you are; just ask > Tapulous<http://www.theage.com.au/technology/technology-news/aussie-in-silicon-valley-strikes-gold-after-disney-buyout-20100702-zs1g.html>and > Firemint<http://www.startupsmart.com.au/growth/2011-05-04/ea-snaps-up-melbourne-tech-start-up-firemint.html>), > but if you’re looking at a B2C or a P2P product, and you’re doing it from > Down Under, you’re going to need luck, and a *lot* of it. > > > > </rant> > > > > *From:* silicon-beach-australia@googlegroups.com [mailto: > silicon-beach-australia@googlegroups.com] *On Behalf Of *Nick Gonios > *Sent:* Thursday, 9 June 2011 6:21 AM > *To:* silicon-beach-australia@googlegroups.com > *Subject:* Re: [SiliconBeach] Re: Is social networking commercially viable > in Australia? > > > > Agree Mick. > > At 3eep/SportsPassion, we understood the challenges of a deminishing ad CPM > model and positioned our efforts towards a sponsorship based approach. This > is well understood in the sports market. Yet, this approach ultimately > limited our ability to scale revenues against usage because the deals were > usually fixed in terms of $. > > Anyway, key point is that it's very difficult to commercialise these > communities and do not underestimate the efforts required to do so. > > Only way to go is to have a community pay you a subscription fee for the > functional service you provide them. Prove you are adding value and then > you're ready to scale. > > Nick Gonios > > > > On Wed, Jun 8, 2011 at 11:42 PM, Mick Liubinskas (Pollenizer) < > bigm...@gmail.com> wrote: > > Nick knows my thoughts on Freemium. :-) > http://www.pollenizer.com/premiree-more-premium-less-free/ > > My main point is that it's a hell of a risk aiming for an advertising > model, unless you're just nailing great content like Problogger and > Neerav. You have to build it, grow it, be very patient (typically or > you do a big distribution deal that costs bucks) and then you find out > if you have a business. > > Also, most ad businesses typicaly completely underestimate what they > will make. They assume that it's targetted and that it's contextual so > they'll get really high CPM's. But it never works out as good as you > thought and as you scale it always gets worse. > > 1 million impressions at 50c CPM (which is not bad at scale) is $500. > Which covers hosting, and vegemite sandwiches for a month. At that CPM > you need 2 billion impressions to make a million dollars (can someone > check my maths, I was betterer at other things at skool). > > Of course, it depends on about 10,000 things and we're probably all > wrong so go for it and prove us to be shmucks. > > Mick "Banner Ad" Liubinskas > > > > On Jun 8, 8:31 am, Nick Gonios <nickgon...@gmail.com> wrote: > > +2 from me. > > > > I have enough experience in this locally as we went about building a > local sports social network as early as 2006! > > > > We would say to people 'we are myspace for team sports!' that's how early > on we were onto the next wave of building a social layer over the web. Some > of our main challenges was trying to find the person ready to use our > service and continue to use it. The Sports market is very sports code > oriented and a lot of people do not appreciate this when they first enter > this market. I still see it today when I speak with people who have entered > this market locally. The fundamentals have not changed. > > > > Building for platform scale just for Australia is extremely difficult in > this part of the world and therefore an ad supported model is too hard to > even consider. > > > > A freemium model makes more sense in Phase 1 and then consider ad/sponsor > revenues in Phase 2. In order to build a freemium model you need to make > sure you're providing a functionality simple yet valuable service that a > community actually needs. > > > > This are my learnings and views. > > > > Regards > > > > Nick Gonios > > 3eep co-founder (and now heavily focused on transaction revenue ventures) > > > > > On 08/06/2011, at 7:22 AM, Niki Scevak <niki.sce...@gmail.com> wrote: > > > > > +1 to what Alan said. > > > > > Also, here is another take on online dating/social networking that has > > > an interesting biz model (adwords for people): > > >http://www.wired.co.uk/magazine/archive/2011/05/features/sexual-network > . > > > > > It's nothing against social networks, the criteria is against > > > businesses that require a large audience (top 3-5) to become relevant > > > to brand/reach based advertisers. The market there requires an ever > > > huge audience to be relevant and then the cpms are crashing all the > > > time. With all that said, for the winners it's still a good business. > > > > > On Jun 7, 12:20 am, alan jones <alan.jo...@gmail.com> wrote: > > >> Just because Startmate prefers not to invest in ad revenue-focused > > >> businesses doesn't mean you shouldn't try and build an ad-revenue- > > >> focused startup — there are other sources of funding out there! At > > >> Startmate we're looking for a particular subset of startups and > > >> startup founders because we think those are the people and companies > > >> we can add the most value to (and hence get the most return on > > >> investment from.) > > > > >> As others have said, ad revenue is not the only revenue source for a > > >> social network. But for a social network to be successfully funded by > > >> ad revenue, you need to > > > > >> - Identify a community that marketers want to reach, that is not well > > >> served by other ad networks; > > >> - Build a social network that this community wants to use > > >> - Find a way to get them all to trial and then keep using it > > >> - Build a critical mass of audience in that community that sustains > > >> and grows itself > > >> - Find a way to place advertising in the community that doesn't upset > > >> the community's users > > > > >> You don't have to solve all those problems to be considered successful > > >> — for instance, many would argue that Twitter hasn't yet delivered an > > >> advertising solution that marketers need, nor placed advertising media > > >> its users are comfortable with. But if I were Twitter I wouldn't be > > >> resting easy just yet, either. > > > > >> Hope that helps, > > > > >> - alan jones > > >> (Startmate investor and mentor)www.doingwords.com > > > > >> On Jun 5, 9:50 pm, Joshua Partogi <jpart...@fanstago.com> wrote: > > > > >>> Hi, > > > > >>> One of the criteria for submitting application to Startmate is that > it > > >>> must be a business that does not depend its revenue from advertising. > > >>> From what I can see, social networking is one type of business where > > >>> it gets its revenue from advertising. Looking at that criteria, does > > >>> that mean businesses like social networking is not a viable business > > >>> or won't succeed in Australia? Is there any example of social > > >>> networking that come from Australia that did not succeed in tapping > > >>> the market? What are the pitfall if we want to start a social > > >>> networking in Australia? > > > > >>> Thank you for the insights and assistance. > > > > >>> Kind regards, > > >>> Joshua. > > > > >>> -- > > >>> @jpartogi > > > > > -- > > > You received this message because you are subscribed to the Silicon > Beach Australia mailing list. > > > > > > Guidelines on discussion: > http://groups.google.com/group/silicon-beach-australia/msg/351e183e13... > > > > > > No lurkers! It is expected that you introduce yourself. > > > > > To post to this group, send email to > > > silicon-beach-australia@googlegroups.com > > > To unsubscribe from this group, send email to > > > silicon-beach-australia+unsubscr...@googlegroups.com > > > For more options, visit this group at > > >http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en > > -- > You received this message because you are subscribed to the Silicon Beach > Australia mailing list. > > Guidelines on discussion: > http://groups.google.com/group/silicon-beach-australia/msg/351e183e1303508d?hl=en%3Fhl%3Den > > No lurkers! It is expected that you introduce yourself. > > To post to this group, send email to > silicon-beach-australia@googlegroups.com > To unsubscribe from this group, send email to > silicon-beach-australia+unsubscr...@googlegroups.com > For more options, visit this group at > http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en > > > > > -- > Nick Gonios > > e: nickgon...@gmail.com > m: 0416 239 111 > > skype: nickgonios > twitter: @nickgonios > linkedin: http://www.linkedin.com/in/nickgonios > > -- > You received this message because you are subscribed to the Silicon Beach > Australia mailing list. > > Guidelines on discussion: > http://groups.google.com/group/silicon-beach-australia/msg/351e183e1303508d?hl=en%3Fhl%3Den > > No lurkers! It is expected that you introduce yourself. > > To post to this group, send email to > silicon-beach-australia@googlegroups.com > To unsubscribe from this group, send email to > silicon-beach-australia+unsubscr...@googlegroups.com > For more options, visit this group at > http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en > > -- > You received this message because you are subscribed to the Silicon Beach > Australia mailing list. > > Guidelines on discussion: > http://groups.google.com/group/silicon-beach-australia/msg/351e183e1303508d?hl=en%3Fhl%3Den > > No lurkers! It is expected that you introduce yourself. > > To post to this group, send email to > silicon-beach-australia@googlegroups.com > To unsubscribe from this group, send email to > silicon-beach-australia+unsubscr...@googlegroups.com > For more options, visit this group at > http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en > -- __ Michael Harries -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. Guidelines on discussion: http://groups.google.com/group/silicon-beach-australia/msg/351e183e1303508d?hl=en%3Fhl%3Den No lurkers! It is expected that you introduce yourself. To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to silicon-beach-australia+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en
