Sometimes I think that startup business plans are worthless. In my experience, startups zig and zag all over the place based on rapidly changing circumstances until they find a way to make money. It usually ends up being quite different than what was originally envisioned.
On that note, I want to point out how the two primary businesses I've been involved with have changed. We initially had a strategy with our video yellow pages software to launch our own sites and hire a small salesforce in different cities around the country. After 15 months of seeking funding with no luck, we decided to change the business model. By then, the major online directories had started selling video listings and put salespeople on the ground in a few major cities. We could have beat them to the punch with some money, but now competing in that way would be much tougher, even if with decent financial backing. So, we decided to license our directory software to local media companies. They are looking for more revenue, and this gives them something new to sell to existing clients. They have established sales relationships in local communities, but their technical expertise and/or resources are usually not up to par.
Our first licensing deal occurred last month with the local geodomain Louisville.com. Our software is getting ready to go live at http://videopages.louisville.com once we get a few more kinks worked out. Now here is where you can help. Our goal is to license this software to other customers for small fee plus revenue share basis. If you know anyone at a local television station, radio station, newspaper, or geodomain who may be interested, we will pay a 10% commission on whatever revenue we collect from them over the next year if you provide a warm introduction. An introductory email or phone call, or contact information with the approval to use your name as reference, could get you a nice chunk of change. Early results lead us to think that the average media outlet will sell $400K-$700K worth of listings in the first year, and our take of that will be 50-200K. That means if you are lucky, you could walk away with $5,000 – $20,000 just for an intro. If it takes you 15 minutes, that is a pretty good hourly rate. Our ideal contact person would be a sales manager or station manager, but we are willing to talk with anyone. And it saves us from having to invest in a sales person for awhile. Of course, keep in mind that the intro may not pan out to anything, and you may end up with nothing. But in that case, you are no worse off.
In the meantime, we decided to go further with this same market by creating more web software for local media companies. They have contacts with advertisers, they have the mouthpiece to aid distribution, but by and large, their websites suck and they don't embrace the latest tools. So we are building tools targeted for them, and we have come up with some very creative and cool ideas. We still believe the web will move more local, and that by gaining access to local advertisers and local consumers through partnerships, we can eventually work on building a local ad network that is very different than anything else currently out there.
The second change involves Daily Idea. While we have not been able to find an advertiser for the show at the rate we would like, we have started to receive more inquiries about web video services for other people. The advantage we have is combining a strategic understanding of how web video gets distributed and discovered, along with basic video production. We don't take business like making tv commercials, but we are now producing webshows for Popcrunch and TechRepublic, and producing "linkbait" videos for several other clients. We have split our company in two, with my partner Todd focused on the video work. The same thing applies here. If you know someone who needs web video work, send me an warm intro and you will get 10% of whatever they spend with us over the next 6 months. (Shorter time frame because video has lower margins) Ideal candidates would be online retailers who need unique video content to keep visitors coming back, or popular websites and blogs that could benefit from the differentiation of adding a web video show to the site. Anyone seeking video linkbait would also be a good candidate. However, someone looking to produce a standalone webshow… should probably reconsider. The advertising market isn't there yet to support the content creation costs. At this point, it only makes sense to create a web show if you are already making money and are looking at the new content as an advantage over your competition.
Everybody wants easy money, and it doesn't get any easier than this. You just need to think about whether or not you know the right person. You don't have to do any selling. We can take care of that. We just need to get the attention of the right people, and we are willing to pay for that.
If you are interested, have questions, or want to send an intro, send email to rob-at-businesspundit-dot-com.