Online Money Making Opportunities

Funding

In May of this year, Tomio Geron at the Wall Street Journal summed up the funding story thusly:

Etacts, which completed the Y Combinator incubator program in March, has just closed a $700,000 seed round from prominent angels including Ron Conway's SV Angel; Eric Hahn, former chief technology officer at Netscape; Joshua Schachter, founder of Delicious; Jim Young, co-founder of HotOrNot; Barney Pell and Lorenzo Thione, co-founders of Powerset; Jawed Karim, co-founder of Youtube; Ashton Kutcher, actor and now angel investor; Robby Walker and Wayne Crosby, former Y Combinator participants; and Irene Pedrazza, founder of CheetahMail.

Etacts raised the funding quickly - in just over a month - and had intended to raise $500,000 but decided to let in more investors because of the strong interest, said [Howie] Liu, who co-founded the company with classmate Evan Beard after the two graduated from Duke University last year.

You don't take Ron Conway money and then just give up in six months.

Rapportive raised a small round from other impressive funders 3 months later. Gist raised $4 million in between those two announcements, in July.

Etacts hasn't replied to our request for comment, but an acquisition certainly seems the most likely explanation for the service's decision to shut down.

Email as a Platform

We wrote about email as a platform for application development most recently in August. Yahoo's Eran Hammer-Lahav, then working on developer relations for Yahoo Mail, explained why so many companies are interested in this space.

"It's pretty clear that email provides a huge potential for extensibility, given the wide range of ways people use it. The inbox is much more than just a place for incoming mail, it is the primary dashboard for many web users - it is how they manage their lives. So when looking at email as a platform, the opportunity of making it more useful and productive reaches most areas of online activities.

So far the focus has been on taking social information to help better manage email overflow, but the platform has much more potential beyond that."

What will its likely acquirer do with Etacts? Presumably displaying the social networking profiles and past conversations we've had with the people who sent us emails is just the beginning. How will other email providers respond, lest they fall behind in richness of user experience? That's where things will get really interesting.

Personal Data as a Platform

Perhaps even more interesting is the way that all of these services use data about the people who have sent you email that they have acquired through services like Rapleaf. Services that scoop up and wholesale personal profile data ("the person attached to this email uses this LinkedIn profile, this Twitter profile, owns a home, has kids and loves short videos about kittens") are wildly controversial but also very useful. Nowhere is that usefulness more clearly demonstrated than in the email CRM services like Etacts, Rapportive and Gist.

Perhaps if Etacts' feature-set goes mainstream in some big email program, the story of value built for everyday people (not just marketers) from aggregate online personal data as a development platform would become easier to tell.

That would be very good news.

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.



For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.



...



Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.



We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

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