Friday, October 06, 2006

Sweet Irony

A a couple of friends pointed me to this article:
The Investor: Jim Breyer, partner, Accel Partners

What he's backed: Brightcove, Facebook, Prosper

What he wants now: Social-networking sites may be sprouting like weeds, but none yet operates as a bona fide marketplace, with members buying and selling their own creations as much as they blog, link, and post. Breyer, who sits on Wal-Mart's board, is interested in backing an international network for indie artists, musicians, filmmakers, authors, designers, and other creative types from dozens of countries.

Ideally, the site would have the download and payment features to create what he calls a "micromarket" for members' wares. "There might be a Chinese student filmmaker with a five-minute film who wants to reach a niche of U.S. users," Breyer says. "He could find people willing to buy his films, and maybe a producer willing to bankroll more." Transaction fees would supplement ad revenue.

Breyer wants a five- to 10-person team to build a prototype using a peer-to-peer structure that would reduce bandwidth costs, and to identify core groups of users that would get traffic moving to the site.

What he'll invest: $10 million
I'll be damned if this doesn't sound exactly like a concept i've been developing and pitching over the past two ... three years. This article i wrote on dijjer (controversially dugg for having dared to suggest that something out there might be more appropriate than BitTorrent for certain use cases) a while back reflected just one of the latest strategies I was exploring to build a scalable ecosystem.

How did I get into this? Being in L.A., quite a few good friends of mine are struggling artists. Jazz artists. Blues. Independent filmmakers. Upon pitching the ecosystem to them, their response was overwhelmingly enthusiastic, and they've contributed a lot of great ideas. But I've so-far been letting them down though. Yet, applications of this concept don't stop there. The rabbit-hole goes deeper, much deeper.

The problem is, ideas, no matter how thoroughly-developed, and pitches, are dime a dozen. I've learned the hard way that nothing moves forward until you've built something palpable for people to poke at, get their hands-on, and understand your vision. But by the time you've gotten to that point, really, what the hell do you need investors, or anybody else for?

You ought to just go it alone. Screw investors. If you've got a sound business model, with a well-thought out application built from the ground-up with scaling in mind, you can buy the hardware and bandwidth you need, when you need it. You need investors when what you're looking to build is yet another buzzword-compliant web2.0-taggy-mashuppy-socialnetworky-hotmeme'o'the'day-y with no plan for a strong revenue stream, which in the end will die as yet another fad, but will have made a few investors rich because they got Yahoo! to purchase the user base.

At the last eBay developer conference, i got the chance to meet Shannon Sofield, from Payloadz.com, who gave us a presentation of his digital marketplace. He's figured out the tough part: facilitating transactions and fulfillment for the purchase and delivery of digital assets. And he's currently doing it without the assistance of any peer-to-peer framework. If he starts adding a social framework to his ecosystem, he'll have it made in the shade, not that what he currently has, doesn't already pay his bills quite handsomely. My hat off to Shannon, for having a vision, and superbly executing on it. And there's a lot of heat around his ecosystem, the dude could not rest for a second at the conference.

Let's hope that in 2007, I put an end to the pondering, and start delivering. If i don't, someone else will. And in the end, it'll be okay. Sad for me, but okay. I believe humanity is in dire need of an alternative to today's media distribution. Far too much of what we see, hear, read is controlled by a handful of corporations that call all the shots, and what rises to the top, is too often not even close of being anywhere near the cream. Widest possible audiences are being catered to, leaving little to no room for niche interests.

Money today is flowing in a highly inefficient and wasteful funnel pattern, from the unwashed masses to BigMedia, so many revenue opportunities are simply not being catered to.

We're missing out on so much. And it's sad.

4 comments:

Anonymous said...

that is really a sweet irony! but is there place for another etworking site?

Chris Holland said...

what i've been envisioning will NOT be:

1) a social network site.
2) a video/music/thingamabob sharing site.
3) web 2.0

It will first and foremost be a marketplace, closer in concept to eBay, a place for people serious about making quality digital assets, reaching out to their own niche audience, and selling to it.

HOWEVER, to make the marketplace dynamic, i WILL include elements of social networking, enabling buyers to form relationships with other buyers, in similar concept as to what you might have seen on netflix and, to some extent amazon. The key here is the online destination has a primary, actually useful activity, and the social networking aspect is there to ENHANCE that primary activity. And that primary activity is an actual business model with revenue associated with it.

Unlike myspace, whose primary activity is ... uhmm ... make ugly pages, connect with friends because e-mail, instant messaging, free online calling, and video conferencing needs to be reinvented in a web browser, and generate a lot of virtually unmonetizble page views (300 million dollars a year in revenues is LAUGHABLE and outright pathetic considering their large user base)

I will enable previewing of digital assets within the marketplace, but as a tool to promote the purchase digital assets.

And i will smack anyone who calls my baby a web 2.0 destination. I'm here to provide a solution for a very specific need, to an under-served audience.

Most web 2.0-labelled online destinations I'm seeing out there are solutions in search of a need, whose exit strategy is to get bought out by Yahoo and Google.

Frank Juval said...

As an "unknown" artist, I really like you're idea and would be interested in being a part of it.

I've been with My Space way before it blew up. My buddy at the time got me to join. Right now, I get all sorts of requests from others (some artists) wanting to be my "friend". But there is no real friendship nor relationship there. It's strictly superficial. Just a notch on their page. What's the use?

My illustrator buddies and I formed a collective. We're going after big fish. I think if this site materializes, I would definitely pitch it to the group and see what they think.

Chris Holland said...

Frank, good to know. Thanks for your thoughts :) Will let you know :)