RE: Crowd sourcing a business model
I’m confused. I’m currently sitting in my bed on this lovely Saturday evening in San Francisco writing a pretty In-depth business plan for a meeting with investors in London at the end of March.
I’m looking to take on a bigger round of angel investment because I want to scale and grow my company Newspepper, but I’m also a little stuck over which way to take the company moving forward and, you know what they say, two minds are better than one, so I was hoping a few million might be even better, and we could sort-of crowd source the best business model together?
I would greatly appreciate your help, and most of you are far more experienced than me so I would be humbled to hear your advice;
The reason why I am confused is with the online content landscape dramatically changing there are so many directions I could take the business model of the company in and I’m finding it difficult to evaluate which would be best given the rapidly evolving online media environment.
When I originally started out I wanted to create a model like Current TV where students and graduates could get paid work experience for content creation or citizen journalists (hence the name Newspepper, like Newspaper) could upload news in return for a percentage of the advertising revenue. This is now the model of the YouTube Partner Program where Google shares advertising revenue with content creators- over 100 content creators are earning six figure salaries, sharing their daily lives on YouTube, aka ShayCarl style.
I quickly realized without a huge round of funding I could not compete with properties like Current TV or the then growing Facebook and I needed to pay my bills; so I stuck with the model of employing students and graduates to get paid internships in media and build a portfolio that would go towards their career, rather than working in a job that was totally irrelevant to their chosen career path, like mine had been pulling pints in the bar.
After a year at Newspepper, one of our first employees got a job as a camera man and editor at National Geographic because of the showreel he’d built whilst getting paid work with Newspepper and that for me, was success.
But we encountered problems along the way; quality control was an issue -some students and graduates were incredibly professional and others were terrible, ruining jobs where clients had paid for content production that could not be rectified.
We developed the Newspepper Star Rating system to solve that problem and it worked, students and graduates had to prove themselves before getting on our paid roster and now our production values are much higher.
But instead of being an intern platform like Internmatch, Enternships or Internship.com which post internships placements to match with interns, we actually managed and mentored the Intern through the training and the job so our operating costs were a lot higher.
In fact this is where the problem lay with our current model, because we train and manage each of our freelancers internally, our operating costs are very high.
Sure we could easily become a platform that connects interns with Internships but there are already hundreds of those and that model is easily replicated.
Since we’ve been trading in 2008 our product has essentially been content creation and distribution for brands. Clients include the BBC, Channel 4, Facebook, PayPal, Conde Naste, TechCrunch Europe, Huddle and a whole host of other startups, mostly in the technology industry, given our network.
We’ve also produced editorially driven content, creating the blog Techfluff.tv with an advertising revenue model, but my ever growing issue with content creation, especially in the news arena, is that it has become like content farming, where it’s a race to post the story first, rather than provide meaningful perspective. When a news story hits, pretty much all the blogs have exactly the same story and I get it; advertisers need the traffic for click through rate, but I can’t help thinking it’s become like automated journalism.
But if these acquisitions/numbers are anything to go by:
- Huffington Post sold to AOL $315million
- TechCrunch sold to AOL $25 million
- Read, Write Web sold to Say Media for $5 million
- Mashable valuation $50 million
Then content is a good game to be in right now.
But how much longer will journalism ‘brands’ last as we move more and more towards the individual as their own brand and own media outlet.
As we witnessed with the Arab Spring and with Occupy, people all over the world are using social media to communicate and the Internet provides us all with the tools necessary to be content creators as the Internet has decreased costs and democratized media.
So back to Newspepper, what are we passionate about?
We’re passionate about:
- video, especially live video
- working with young, excited people
- changing the world for the better
- and mobile
Video: I’ve been championing online video for years and it’s only now that brands and advertisers realize the importance of video in communicating their brand to the next generation of media consumers Ad spend on video is expected to reach $850million by 2015 compared with $150million in 2011.
Changing the world for the better: Say Media and Mevio’s model are interesting; they invest in content creators to reach wide distribution for their advertisers, but is that really changing the world for the better?
Mobile: There are 21 million iPhone 4 & 4S users, age 18-35, in the U.S alone and mobile media creation and consumption is growing. Apps like Camera + and SocialCam enable anyone to broadcast relatively high quality videos from anywhere and have millions of users.
As of late Newspepper has been not only creating content for startups and brands but also finding advertisers to pay for the cost of production where the brand cannot afford to pay themselves. This is a great model, but I’m also wondering how scalable?
How about a platform that matches sponsorships with content much like Sponsorhub does for sponsorships and events?
We are also interested in selling Silicon Valley concepts to TV networks as world-wide interest garners with Silicon Valley and we believe there are so many great stories to be told, every day it seems like there’s a new reality show being made about Silicon Valley, we want to tell more of the stories being made here to the world.
We also incubate our own talent and projects, we do lots of boring corporate work to help us fund really exciting and hopefully impactful projects like Startup World and Silicon Valley Live.
We’re really overwhelmed by the power of what social media can do for people with platforms like Kickstarter and are impressed by people like Shira Lazar who has built up an online brand in What’s Trending from scratch.
So lets recap,
- A great list of clients worldwide ranging from the BBC, PayPal and Facebook to startups, mostly in the technology industry.
- A global network of young, talented freelancers specializing in quality content (mainly video) production already vetted by us as producing quality work.
- Extensive network, outreach and distribution with current videos reached over 4million a month through various networks.
- Extensive understanding of online content creation around video and live video plus social media optimization
What we care about:
We’re passionate about:
- Video, especially live video.
- Working with young, excited people.
- Changing the world for the better utilizing online technology.
What we could become? Options that we are exploring ( I really need your help here)
- Back to our original model of being a platform for content creators (business model advertising).
- A platform connecting content creators with brands and advertisers. (business model advertising).
- Content production company producing online shows.
- Some really cool mobile app that we have not thought of yet.
So what do you think Internets? As you can see I’m asking a tonne on questions and I’m all over the bloody place. We need focus.
What do you think is the best model we could become in the current digital media lanscape given our background and experience?
What should we focus on?
What is the best business proposition?
Please leave your comments below. What can I give you in return for you time and feedback? Umm, err… not sure yet, but I can say you will be a part of our success and I will always pay it forward where I can.