Entrepreneur Office Hours - Issue #98
Your idea isn't as brilliantly unique as you think, and that's a good thing
Too many entrepreneurs worry about other people copying their ideas. I tend to believe they should be more worried about the opposite: nobody wanting to copy their ideas. In fact, if you have a seemingly brilliant startup idea and can’t find at least a half dozen other companies already trying to do the same basic thing, you might want to reconsider your plans.
Since other people having the same idea as you is actually a good thing, in this issue’s featured article, I share some thoughts on what to do when you eventually find out your idea isn’t as brilliantly unique in you originally thought.
Also in this issue, you’ll find some fundraising advice. Or, more specifically, an explanation for why your pitch deck sucks. And, yes, I’m pretty sure it does. Sorry!
And, for something completely different, in this issue’s Q&A someone asked a question about monetizing on media brands. Seemed like a fun one to answer, so I gave it a shot. Not sure if it’ll help anyone aside from the person who asked, but… well… who knows? Maybe a lot of you are secretly running popular, up-and-coming media empires?
Step #1: Don’t panic. Step #2: Read this article and learn what you should actually be most focused on.
Since you’re reading fundraising advice from some random stranger on the Internet, there’s a good chance you’re struggling to raise venture capital. Here’s why.
Office Hours Q&A
I run a media network that’s popular within our niche and gets a good amount of traffic across our website and social media channels. The problem is that most of our revenue comes from advertising and sponsorships, which feels fragile, so we’re considering other ways of monetizing.
We’ve been looking at all the usual pathways in terms of things like customer branded products and adding a subscription model. I’m curious if you have any thoughts about other ways of monetizing on a media brand. I ask, in part, because I’ve noticed you’ve spoken with lots of people running similar types of media websites on your podcast, so I’m curious what, if anything, you’ve learned from speaking with them.
First things first, I feel like advertising gets lots of hate as a revenue stream. Some of that hate is deserved hate, particularly in terms of how advertising tends to influence content choices. However, in terms of fragility versus stability, advertising is a fairly reliable source of income. After all, advertising as a revenue stream in media goes back at least as far as the early 1800s and the beginnings of the penny presses. Seriously, go read about entrepreneurs like Benjamin Day and his newspaper, The New York Sun, to see how long advertising has been the backbone of media.
Realistically, any sense that online advertising isn’t a reliable revenue stream probably comes from the dotcom crash of the early 2000s. Back then when the bottom fell out of the tech industry, the millions of dollars companies were throwing at advertising dried up, and tons of media companies went out of business as a result. But that was a very different Internet. Today, every major company relies on Internet advertising regardless of whether or not they’re “tech companies.” On top of that, our ad networks (mostly. Google and Facebook) are much more mature than late 90s and early 00s networks.
In other words, so long as you consistently have valuable eyeballs (i.e. site traffic), you’ll be able to generate ad dollars. From that perspective, I wouldn’t worry about advertising and sponsorships being fragile.
As for other monetization strategies, realistically, it seems like you’re addressing most of them. The only major one you didn’t mention that I’ve seen deployed effectively relates to hosting events. Depending on what your specific niche is, perhaps you could monetize on things like conferences or parties or other similar types of experiences.
But honestly, if I’m you, I’d focus on subscriptions. Subscriptions are the real gold because they generate recurring, reliable, predictable revenue. If you have something you can convince a portion of your readership to subscribe to, then you should probably focus on that.
For what it’s worth, in my conversations with people like Drew Curtis of Fark.com or Rob Malda of Slashdot, the value proposition for subscriptions wasn’t very difficult to identify. They just had to offer ad-free versions of their websites. Once they did that, a decent number of people were willing to pay to avoid ads, and, from there, they had their subscription models.
You might consider doing the same thing. Keep the ads for your free visitors and generate revenue that way, and, for people willing to subscribe, remove the ads.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!