Hi guys, A few random thoughts given my experience with www.barology.com.au
> We've been going hard at trying to go from zero users to the masses for over > a year - we're not even close to date > Regarding commercialisation, Mick, Niki and co. have a great understanding of > the risk / return of social networking sites. From their perspective / > investor perspective there's a choice: 1. Invest in something which tests the market nearly immediately. If positive response, let's progress. If no positive response, move on. Little resources invested. 2. Invest in something which takes a significant amount of time to generate interest. The product (in our case website) is the easy part of the process, but reaching the masses is infinitely more challenging. Dealing with press releases, SEO, Facebook marketing, guerilla marketing, seeking to purchase email lists, taking the website to mobiles and the like is no easy task. A huge amount of fun for my developer and I but guaranteed significant time investment. Not only that, you've not made a cent but the expenses naturally add up. Appears to be a much tougher journey than 1. above - perhaps commensurate return at some point but nowhere near a guarantee. > Eatability gets 1,800,000 impressions per month and charges $15 CPM (300,000 > users hitting on average 6 pages each) - this is the quoted charge but I > suspect their realised amount to be much less. By my calcs, if they sold > their entire advertising real estate they would yield $27,000 per month > (1,800,000 * 15 / 1000). They also seek to generate revenue through other > channels. My understanding is that these guys have been around for a very > long time, as has been the Whirlpool forum. > Patience will need to be your virtue, unless you're loaded. Money typically > buys immediacy and with these sites it's extremely challenging to get > traction without spending some significant coin. If I had a million dollars I > could probably spend every last cent on advertising and the like, but hey who > has got a spare million floating around. > What the Spreets team did was pretty phenomenal. To grow in the fashion they > did, bare bones to juggernaut (and have a database which everyone would love > to get their hands), so quickly and build a community around a simple idea is > a stellar performance. Dean I owe you a six pack! > Overall, Barology has been a great experience and my developer and I are > still having a blast with a few ideas up our sleeves which we'll keep you > informed of over the coming months. More than happy to share any thoughts > with the Silicon Beach community based on my limited experience. My best regards, Paul "trying to cross the chasm" Somers and Leishi "ninja developer" Luo pa...@barology.com.au On Jun 10, 1:17 am, Michael Harries <michaelharr...@gmail.com> wrote: > 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...>and > > Firemint<http://www.startupsmart.com.au/growth/2011-05-04/ea-snaps-up-melbourn...>), > > 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/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 > > ... > > read more »- Hide quoted text - > > - Show quoted text - -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. 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