Archive of TheNextWeb.org
Written on November 13, 2008 – 1:43 pm
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
I just received an email from Tom Batten (at London and Palo Alto based) DN Capital with some good news!
“DN Capital recently had the first close of its second fund GVC II and is actively seeking investments in European software and digital media companies requiring growth capital.”
In other words: we have money and want to give it to you. Tom is looking for profitable companies with quarterly revenues of at least €750k who are growing 30%+ pa.
That rules most of us out unfortunately.
If your company is doing well and you are seeking capital for growth, founder liquidity, or change of control, don’t hesitate to contact the kind people at DM Capital!
I wish I would get more of these emails!
Here are two examples of investments that highlight DN Capitals growth strategy:
I hope you like that post!
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Written on November 11, 2008 – 11:40 am
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
A few days ago I was watching a presentation in which 50 companies were asked about their online business model. They had been given only 5 options to choose from. As you can see in the graph on the right here 11% had a Subscription fee model, 24% got their revenue from Advertising, 22% had Single Copy sales and 3% used Registration fees.
Interestingly enough 39% of those companies picked ‘Different’ as their business model. I joked that maybe “None” would have been nearer to the truth.
That got me thinking though. How many business models are there on the web? Can they be categorized and determined? Are the possibilities endless or limited?
Luckily I won’t have to invent anything myself. Professor Michael Rappa, director of the Institute for Advanced Analytics at North Carolina State University, did all the necessary thinking and research and wrote a detailed document titled Business Models on the Web which describes the following models:
Brokerage
Brokers are market-makers: they bring buyers and sellers together and facilitate transactions.
Advertising
The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads.
Infomediary
Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
Merchant
Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction.
Manufacturer (Direct)
The manufacturer or “direct model”, it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel.
Affiliate
In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites.
Community
The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services.
Subscription
Users are charged a periodic - daily, monthly or annual - fee to subscribe to a service.
Utility
The utility or “on-demand” model is based on metering usage, or a “pay as you go” approach.
The different models are explained in detail on his webpage and should be required reading for any Internet entrepreneur. Professor Rappa argues that these are the basic models but the list is not definitive or exhaustive. He writes “Internet business models continue to evolve. New and interesting variations can be expected in the future.”
If you think you know of another business model not present in this list, or a combination of models, please let us know in the comments.
Written on October 27, 2008 – 10:38 am
Ernst-Jan Pfauth, editor in chief
Last Friday, Amsterdam was the scene of Holland’s first international blog conference BLOG08. Pete Cashmore (Mashable), Loren Feldman (1938media.com), Hugh MacLeod (Gapingvoid), and Scott Rafer (Lookery) all crossed the ocean to tell the European crowd how they could turn their blog in a successful one. Two of them, namely Cashmore and Rafer, focused on monetizing blogs.
Nobody wants money?
When the Mashable founder asked the crowd about monetizing, something noteworthy occurred. Anne Helmond reports:
When asked, hardly anyone in the room actually wants to monetize its blog. Pete is kind of surprised, especially if he asks the same question in the US where everyone raises their hands.
Language barriers
At first, I wasn’t really surprised. After all, most BLOG08 attendees report for a rather small group compared to bloggers who write in English. A Dutch blogger for example, only has an audience of 17 million people. Americans have a crowd of at least 300 million readers at their disposal.
What did struck me as odd was the reluctant attitude of most visitors towards money. Like it’s some kind of crime.
More revenue means more time for blogging
I’ve been blogging for a year before I made some money out of it. And ever since I started doing that, my blogging skills improved. More revenue means more time for blogging. I was able to quit my sorry day job and spend more time on reporting about tech.
A precondition on making some money with blogging is writing in English. Simply because you can reach a larger crowd. That’s not something I came up with. No, one of Holland’s most remarkable journalists, Nico Haasbroek, once told me that.
Write your articles in English, German, or French, so you can sell them to any magazine or newspaper.
Content producers should not be involved with advertising
Sure, my English isn’t perfect yet. But thanks to the euros earned, I can soon start following some English lessons. While I’m doing that, I keep another rather important lesson in mind. As read in Michael A. Banks’ Blogging Heroes, stated by Ken Fisher from Ars Technica:
Content producers should not be involved with advertising, to avoid even the appearance of advertised-influenced content.
So, work your ass off, create great content, and find an advertising partner like Federated Media as soon as you can make money out of your blog.
[Photo credit: Floris Dekker]
Written on October 5, 2008 – 9:07 pm
Steven Carrol, Next Web WebTipr France
Following on from Patrick’s wish for a specific tool to edit the theme of Wordpress blogs, I want to introduce a company that I would love to use and have been drooling over but can’t because it is PC only and I am strictly a Mac man. However, they do solve a very real problem that I am constantly grappling with, they make money, and they could make a ton more if they designed a Wordpress plug in that solved Patrick’s problem and pain.
To edit a website’s design is currently a real hassle, as a developer you have to constantly fath about in a sort of trial and error mode, adjusting one color or parameter at a time. Of course once you change one, that changes everything so you often end up going around in circles for hours until you no longer know whether you’re coming or going (in my case it’s mostly the latter).
Styling is a very time consuming task which generally causes many arguments and frustrations between developers as they try to attain a unique, fresh and interesting look for their projects. With a product like Stylizer this pain is alleviated and the cream works in minutes. One can control the styles in a live fashion seeing how they change the overall look while simply turning knobs and watching the changes take place before your eyes.
As a nuts and bolts developer I personally struggle tremendously with creating a fresh clean look for my own projects. Only after attempting to create graphics yourself do you really gain respect for graphic designers. Earlier in my design carrier I have been constantly disappointed with graphic designers thinking they overcharge, are slow, produce substandard work, etc. In many cases it is often true and one area where I struggled to find a outstanding professional artist. Though I did eventually it is clear to me they are few and far between.
What is now also clear to me is how frustrating and difficult this task really is, I am certainly in the market and will pay good money for an elegant solution to this personal pain, hint, hint, Stylizer Mac version please!!! It is also a little odd that there is not a Mac version of this software (unless there is by someone else and I dont know of it?) given all graphic designers I have ever worked with only ever used Macs.
So if your in the same boat, struggling with creating a shit hot look and feel for your own sites and you use PCs, give Stylizer a shot and let me know if this software is really as good as it looks! Do also do let me know if there something out there similar for the hardened Mac users.
P.S. This article was written by a human not a machine and following on from last weeks huge outcry about the automatic article generating software, we at The Next Web have pledged never to use such software, but the question remains! are the top blogs actually using it? As many sources I have spoken to still think they are :).
Written on August 14, 2008 – 3:05 pm
Patrick de Laive, Internet entrepreneur and co-founder of The Next Web Conference
Earlier today we wrote about Twitter’s decision to stop sending text messages to phones outside the US, Canada, and India. Due to an essential difference between business models of US and European mobile operators, the costs became too high.
How Twitter and mobile operators make money in the US
The difference is how these operators handle MT and MO Text messages.
- A MO message is sent from a mobile phone (to for instance Twitter).
- An MT message is sent from a server to a mobile phone (the Twitter update message).
In the US you pay for sending a text message, but also for receiving a text message. Parties like Twitter who send massive amounts of text messages generate a lot of money for the SMS gateways (or mobile operators). Twitter has a lot of bargaining power and can manage to get 1) the outgoing message for free and 2) a kickback on every delivered message. In other words, the consumer pays for receiving the updates, the carrier earns a bit and Twitter gets a tiny kickback.
A European user costs Twitter up to 7.5 to 10 euros per week
In Europe you only pay for sending the text message. So Twitter is bleeding with every message sent. The costs of sending huge amounts of messages still is around 3 a 4 euro cents per message. So every European Twitter dude can cost up to (250 times 0.03 cent) 7.5 euros to 10 euros per week! That’s obviously not a scalable model.
Option 1: reversed billing
European SMS gateways do offer the possibility to charge the receiver via a so-called reversed billed SMS. The process to charge people via a reversed billed SMS is that you send a message to a short code (e.g. Twitter on to 4200). But the huge disadvantage here is that the total costs of these messages are way higher. A reversed billed SMS costs the receiver normally between 0.25 and 1.50 euros (determined up front by the value added service -in this case Twitter-). Twitter would get a kickback of about 50% of the amount charged, but you can imagine that there are less then zero people willing to pay 25 cents per tweet!
Option 2: a kind mobile operator
Another option is to partner with the operators who would allow Twitter to send the messages for free - hoping that people who receive the message would send one back (to generate revenue). I don’t think that there is one mobile operator who would want to do this, because there is an inter operator charge to deliver a message on a different network of around 1.5 euro cents. And the possible ‘extra’ revenue is far from guaranteed.
Option 3: a pro account
The only viable option I can see is to offer users a PRO account. It makes perfect sense to me: get me some extra cool features and I’ll pay Twitter for it.
Why use SMS anyway?
One more thing. Why use SMS anyhow? It is the most expensive way of transporting data and there are free alternatives. What about twittering per email or via mobile web (For iPhone users there are tons of solutions to work around SMS).
Written on May 29, 2008 – 2:00 pm
David Petherick, Contributing Editor, United Kingdom
On the 7th of May, The Next Web wrote a story about Naked, who had revealed in an honest and simple way that they were having cashflow problems, and that their plans for launch were on hold until these problems could be resolved - to quote:
We will need to regroup, see who’s still on board, and work out a way forward. In the meantime we’ll do everything possible to keep the service going.
We’ll update you when we have more news.
The news is that TechCrunch covered this story yesterday, three weeks on, with a classic play on words: “Naked stripped bare - startup runs out of cash, enters liquidation” — having established the fact that the company had officially gone into liquidation. TechCrunch also felt at liberty, in faux investigative style, to cover some of the more salacious background involving revealing (shock, horror) alleged divorce law-suits causing the assets of the company’s investor to be frozen, and also selectively unearthing information about Naked’s investor, Robert Bonnier.
All great material for a soap opera, but not an approach to reporting a story that we think is correct. Why?
Well, at The Next Web, we chose not to publish any details about Naked until its future status was established - and it still is far from clear. We have maintained discreet and supportive contact with a number of sources close to the situation as the legal and fiduciary process has developed.
One good reason for our silence is that we at The Next Web have had the advantage of having access to the Naked Private Beta, and, having being rather impressed by the service, we felt it best to wait, and allow what is a complex and difficult situation to be resolved before making further comment, or revealing details that we have long known about. We intend to publish details from our sources here when there is a developed story that we feel will interest and benefit our readership. Making a dramatic, and possibly premature, pronouncement of death, is not an appropriate or helpful approach, in our view. As Naked said: “We’ll update you when we have more news.”
Probably the best way for any web company in liquidation to make sure the value of any IP sale is at a maximum is to keep the service running - and that’s the real news. Naked have remained true to their promise because the service is still 100% operational and online. It can be accessed on receipt of a private invitation from an existing user.
Get Naked: Videos describing how the Naked service works are here at http://www.getnaked.com/tour. You can request an invitation by writing to david@thenextweb.org - or if you are a Naked user, please feel free to add your details in any comments below.
Written on May 20, 2008 – 10:09 pm
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
I guess we all know that selling domain names can be pretty good business. But exactly how much money is in that business is anybody’s guess. To give you an impression of what your 4 letter, dictionary safe, erotic style domain name could be worth here is a list of the most expensive domain names ever sold:
1. Sex.com: $12.5 million
2. Porn.com: $9.5 million
3. Diamond.com: $7.5 million
4. Business.com: $7.5 million
5. Casino.com: $5.5 million
6. Asseenontv.com: $5 million
7. Korea.com: $5 million
8. Wine.com: $3.3 million
9. Creditcheck.com: $3 million
10. Vodka.com: $3 million
The interesting thing about this list is the amount of traffic they all generate as measured by Alexa. Sex.com is an obvious winner here but porn.com is only just getting started. And sex.com isn’t even a real site. It just redirects to another domain: sptc.information.com (Yeah, I checked so you don’t have to). If I would own such a great domain name I would use it for something more, well, to the point.
Another surprise is Asseenontv.com. Isn’t that a damn ugly and long domain name? I would guess that it would be a lot cheaper than the 5 million they got for that one.
Do you own any domains you don’t use which might be worth more than usual? Tell us in the comments!
Written on May 7, 2008 – 9:26 am
Ernst-Jan Pfauth, editor in chief
Next Webtipr David Petherick advised me to start using Naked a few weeks ago. That’s a small British start-up in private beta, which aims to give users a better way to communicate with people they really care about than the dozens of other social networks do. It allows you to communicate more freely, in private. Tools are status-updates, private messages and group messages. To me it looks like they’re trying to be a combination between Twitter and e-mail, aimed at a crowd who doesn’t know what Twitter is.
So Naked is into communication and you can tell by the way the team communicates with its users: friendly, open and no-nonsense. They know how to create the feeling of a connection with the service, sort of bonding 2.0. The ultimate example would be the email I found in my inbox a few minutes ago:
The Naked team
Being Naked is all about being open, even if that means sharing not-so-good news. Our start-up has run out of cash. Just weeks before opening up the service more broadly and igniting the buzz…
However, we haven’t given up the faith. We will need to regroup, see who’s still on board, and work out a way forward. In the meantime we’ll do everything possible to keep the service going.
We’ll update you when we have more news.
That’s what I call REAL transparency. And why wouldn’t they be? There are plenty of start-ups that keep their mouth shut while they slowly sink in the deadpool. How is that helping them? By sending out this email they get (1) attention from the press, (2) sympathy from their users, and (3) street credibility - because this really is pr 2.0.
Update: David has ten invites for you to see whether Naked works for you. Drop him a line: david@thenextweb.org
Written on May 6, 2008 – 2:24 pm
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
Good chance you already know that though. It is a well known fact that Steve Jobs only collects $1 a year as CEO of Apple. But don’t be too sorry for him! The board has awarded him with his own 60 million worth private jet and enough options to make him(self) a billionaire.
But there are some technology CEOs that make a lot more than Steve Jobs, and you. Take for instance Ed Zander, the former Motorola CEO who left the company a few months ago made $17.3 million 2007. Seems like a lot compared to Google CEO Eric Schmidt who, just like Steve Jobs, only made a $1 salary in 2007. The same goes for Google founders Larry Page and Sergey Brin by the way. Schmidt did recive $478,662 in “other compensation” which was mostly spent on personal security. Steve Ballmer’s 2007 salary was $620,000 with a bonis of $650,000 and an additional $9,821 in “other compensation”.
Guess HIS personal security was cheaper.
For a nice overview of what High Tech CEO’s made in 2007 check this slideshow on Network World:
What network CEOs really make
Written on March 28, 2008 – 3:43 pm
Boris Veldhuijzen van Zanten, Serial Internet Entrepreneur
Yesterday, VeriSign announced that the prices for registering .com and .net domain names will increase. The Internet services company agreed with the Internet Corporation for Assigned Names and Numbers (ICANN) that from October 1, the barrier for starting a dotcom site will be higher. This is odd news in an economy where things tend to get cheaper (or even Free) instead of more expensive.
Don’t panic though. The increase is minimal:
VeriSign said the registry fees for .com and .net domain names will increase to $6.86 and $4.23 from $6.42 and $3.85, respectively.
Individuals won’t have to worry about price increases but it might be another blow for domain tasting and kiting. Even a slight increase in costs might make their business-cases less attractive.
Source: Reuters.
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The Next Web Blog is closely associated with The Next Web Conference which is held annually in Amsterdam, The Netherlands. At this event speakers from all over the world come together to talk about, and show of, the future of the Web. (
