This will be the strangest interview ever. Going to be interviewed live on MTV via web cam on my laptop.
Archive for July, 2007
I stumbled upon the site crunchbase.com today its part of the techcrunch network its a very useful site listing most web 2.0 startups, who is involved, what they do and who funded them. I wish Arrington would change it so that if you clicked on a venture capital firm in a companies summary it would list all other companies they funded. But other then that its great.
There will be an article on me & plentyoffish in the National Post (Canada) friday’s edition. I also did a interview with a very famous psychologist that will air nationally in the US and Canada soon.
Its kind of funny, I completely took over the Canadian market became a massive site, I rocked the UK. None of this got much media attention. But after breaking into the us market market and becoming a top 3 site, I was flooded with media attention.
The article talks about “bloggers” making millions online. Funny part is few of these people actually qualify as “bloggers”. Shoemoney somehow made the list, even though only 3% of his income comes from his blog. Others mentioned like Techcrunch, boingboing, talkingpointsmemo, perezhilton etc aren’t blogs, they are media properties with lots of employees.
I see no difference in the number of employees, style of writing how the site is layed out etc between those sites and sites like drudgereport, collegehumor, fark and ebaumsworld.com The only difference is if you were in business pre 2004 you are a media company, if you were founded after you are a “blog”.
Techcrunch has 21 employees today, when it started it had one guy writing and posting on new companies. I think techcrunch was a blog when it started but it definitely isn’t today. The day you incorporate is the day your site stops being a “Blog” and becomes a Media Company.
Sounds like Chemistry.com just killed Eharmony’s momentum after they ran those attack ads in April/May. One negative story after the next in the press.
Looks like a report showing that facebook’s CTR is around .04% and they and they might get bought by mircosoft is sparking a lot of speculation again.
From all the posts on facebooks CTR problem it looks like people are coming to the same conclusion I came to 8 months ago. That being that given Facebooks extremely LOW ctr they have no way of making huge amounts of money. Facebook can never monitize like google can because the Unique user to pageview ratio is far to high.
I’ve advertised on facebook a few times as a test, and again last week when their inventory got triggered by adsense ads. It is by far the worst site of all time to advertise. I got over 2000 clicks and 1!!! signup. The biggest problem with facebook is that nearly everyone clicking on ads is doing so accidently or using the service much in the way people use DIGG, ie to waste time/browse.
with a CTR of 0.04% facebook gets 0.4 clicks per 1000 ad impressions, or .4 clicks per CPM.
5 cent/CPM = 12.5 cents a click
50 cent/CPM = $1.25 a click
$1.00/CPM = $2.50 a click
$15.00/CPM = $37.50 a click
Brad Feld suggests that apps on facebook can get 50 cents/CPM to $15.00 a CPM. Looking at the above math that is clearly impossible. Note that the average price on search engines per click is only ~50 cents
Facebook really only has 2 options. Move the ads into better positions which will raise revenues by at least doubling CTR. 2 Find advertisers like myspace did that are willing to pay high CPM’s. But there are a very limited number of advertisers willing to pay insane prices.
Thought that sites just stuffed full of ads serving no purpose couldn’t make money? Think again Moneysupermarket.com is going to IPO for a cool $1.9 Billion.
Would this be the biggest success in the UK for a pure play internet company ?
The CEO owns 85% of the stock making him a billionaire.
Hotornot is getting a lot more attention these days. They are doing great and innovative things.
Hotornot is trying to tie brands to users and then get marketers to pay more money to reach users. I think its a good idea given the context of the site. Hotornot has now come out with hotlists and playing around with a lot of stuff on facebook. I don’t think i’ve ever seen hotornot make a mistake on the product side, but i still think they shouldn’t have given developers so much equity in the company.
When I started out I looked at hotornot and saw validation that I could create a huge company and run it with next to no staff. A few years ago hotornot looked at my site and thought they could also run a free site and make money off ads. Now I find myself looking at hotornot and seeing if they come up with anything interesting that I could adopt in a way that makes sense given the context in which users are using my site.
Since going free hotornot has exploded on facebook from nothing to millions of pageviews and traffic to the main site is also way up. Plentyoffish in that time has also greatly increased, when the WSJ article came out Plentyoffish was the 96th busiest site in the US, this week we broke the top 60 less than 5 weeks later basically becoming the largest dating site in the US and the world.
Today I launched a new feature on the site called Plentyoffish Relationship Needs Assessment. Its a product that makes a long list of firsts for the Dating Industry.
There aren’t very many sites that offer compatibility testing, right now its True.com, Chemistry.com, Eharmony.com and perfectmatch.com. Hitwise data this week shows that Plentyoffish is nearly larger than all of those sites combined in the US.
If you are a founder that takes a lot of Cash and your company isn’t growing in leaps and bounds like facebook chances are you aren’t going to be holding more than 5% of your company if a payday comes along according to the clickz’s article (Union Square Ventures has a presentation saying less than 10%) .
The author says that if you build quickly and sell quickly you’ll make more money. I agree with that, but if you are a programmer you really don’t need any VC money and can build a decent product in your spare time. Taking your hobby company to $100,000/year in profit is the same thing as holding 5% of a company that makes $2 million a year in profit. Not only will you own 100% if your company but chances are that you are far more likely to be successful AND have a buyer AND its far easier to grow to 200k in profits than it is to get to 4 million in profits.
You’ve probably heard 90% of business’s fail in the first year. Its probably the biggest urban legend in the business world that won’t die. The US government says that 65% of new business’s are still operating after 4 years. There is a report that says more then 66% of companies founded in 98 -2002 are still operating today.
Anyone know what the average VC success rate is? I bet its no where near 50% or even 30%. Would be interesting to see how much money founders walked away from in smaller VC deals. Even for something as huge as myspace the “founders” only walked away with $5 million or 1% of the sale price. What would you rather own, 100% of something or 5% of a dream?