Discussion in 'Feedback' started by nutmeg, Dec 12, 2009.
It looks like a sinking ship to me. With $30k going out the door every month, and only $12k - $15k in ad revenue, he needs that subscription business to pick up the slack, but realistically, that's not going to happen.
He said they have 3,100 subscribers, but that number includes "grandfathered" members, which basically means all the members who have been given a premium membership at no cost because they were actively participating on the site before it converted to a pay model.
I'd be shocked if the actual number of paying members is over 500. But even with a best case scenario of 1,000 members, that's still only another $8k a month. It's no wonder they've accumulated $250k in debt along the way. And since he says they have no money to market the site, it's going to be tough attracting enough premium members dig out of the hole and make the whole model work.
I wish him the best of luck with the subscription business. He's going to need it. Even the Wall Street Journal's site hasn't been able to survive as a subscription business.
I thought the link may be noteworthy just to see what's going on out there. A bunch of us moved there from yahoo when they changed formats, maybe one poster subscribes. Not much activity.
they bulked up to 8 employees, offices, etc. and were that young.
Someday, people starting companies need to realize that it is a lot better to get the revenue and then build a minimal, lean company, rather than launching with a lot of fat, and expecting everything to work like you have been in business for 20 years.
It takes years to build a profitable company. And even then, failure rate is high. It is a lot easier to be very lean and keep expenses low, then it is to generate reliable streams of revenue AND profit.
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