October Evolution, Episode 1: “Thank God we aren’t Tide!”
On April 4 the Digital October and Beeline joint web project October Evolution was held live for the first time. Featured in the debut were Dmitriy Stepanov from Afisha-Rambler; Maxim Kashulinsky of BG.ru and Slon.ru; and Vasily Esmanov, well-known for his projects Look at Me, FURFUR, and Hope & Fears.
With the active help of the studio audience and online viewers who were able to comment via twitter and the video call-in feature, success was achieved where none thought it possible previous to the event: in less than an hour the panel of experts created a workable media start-up concept from scratch, packaged and ready for investors and the market.
So how was it?
Not minutes after the program hosts, Annelies van den Belt (SUP Media) and Peter Tatischev (Digital October center), started the clock, Dmitriy Stepanov suggested an idea that his colleagues and the audience all latched onto: “It’s very difficult for me to do anything that doesn’t intersect with my interests. For instance, I love scuba diving, but I don’t know any media, domestic or otherwise, related to that area.”
“I suggest that we create an international project for diving enthusiasts. They are an active group and would love the opportunity to share their experiences and impressions, show off pictures and videos, even check in during dives!”
A few minutes later and, thanks to suggestions from Esmanov, Kashulinsky and the audience,
the initial idea evolved into a platform for media focused on niche interests:
kiting, fishing, snowboarding, in general any interest that requires an initial expenditure on equipment.
Just as quickly the experts decided on their future team: four departments, including development, editing, marketing and sales. The primary requirements for potential colleagues were articulated by Maxim Kashulinsky: the ability to come to agreements with each other and an interest in research.
The issue of monetization was left for later. “First you have to figure out how and why people will use this, then you can figure out how to make money off them,” said Vasily Esmanov. The gurus of domestic media business agreed that the project would be built on an independent site, while also interconnected with the biggest social networks. On this issue they were asked,
“But why will people prefer this to themed Facebook pages and other popular platforms?”
The experts answered that the largest platforms are too general in their functionality to provide for all the needs of this particular micro community. The second factor that will assist in attracting users is the opinion of niche leaders who are able to discuss extreme sports and active vacations unlike any normal journalist.
“The target audience will follow who we call “trendsetters” in the advertising business. It won’t matter in this situation where they’re listed,” said Dmitriy Stepanov.
And when the head of famous Pruffi HR Agency Alyona Vladimirskaya tweets that “You just thought up Livejournal,” Vasiliy Esmanov adds: “Anything new is always built on the shoulders of something old.”
The program’s guests quickly solved the problem of expenses for popularizing the project. As Vasily Esmanov noted, at the beginning specialized media doesn’t really need advertising; niche ads are becoming cheaper and cheaper, and if you can find your core audience, they will worry about marketing for you.
“Only major brands need TV and outdoor advertising. Thank God we aren’t Tide!”
Dmitriy Stepanov’s words immediately started popping up on twitter.
The most popular question among callers, writers and the studio audience alike was not left unanswered: how do you make money off the content? When the topic of money came up yet again,
Stepanov joked, “How will we monetize this? An IPO, obviously!”
Then he added, more seriously, that since the platform is geared toward those who are already prepared to spend money on their leisure activity, besides capitalizing content they can also earn money by generating leads and through context ads. If the platform features even five niches, its prospects are not bad at all.
Further on in the program the issue of the cost of launching the project arose. The experts agreed that before the platform begins paying for itself it will be necessary to invest $5 million into it.
“What are you going to do with $5 million?” puzzled Annelies van den Belt, host of October Evolution.
Vasily Esmanov clarified that it is a complicated project technically and targeted at the global market; releasing it only for Russian diving and snowboarding enthusiasts doesn’t make sense.
The final detail the team of experts and viewers had to resolve was the risks. There were two of them: conflicts between founders and a loss of motivation and interest in the topic at hand, something that is the basic driver of any media. “We also have too much work to get busy on this project right away,” summarized Stepanov.
In all, creating the business model took no more than 30 of the 40 minutes given. After the experts answered questions the viewers were able to give a yay or nay to the project, also participating in virtual crowdfunding. There were 21 investors in the project ready to invest $70,000, while the project received a 62% approval rating among viewers.
The Digital October center would like to give a special thanks to Tekmi-Team, who developed the online call-in system for the web program.