Web 2.0 Expo in SF opens today but the Expo Hall and plenary talks don't start till Wednesday. I stopped by the 9-12 workshop titled Starting Up Strategies for Financing & Growing Your Web 2.0 Startup being presented by VCs Rob Hayes and Jeff Clavier. About 300 people attended.
By 10:30 I had an overwhelming sense of deja vue--the VC funding process slides could have come straight out of the Wayback Machine circa Web 1.0. Then, Ted Rheingold, CEO and founder of Dogster, got up and in 15 minutes gave some really valuable Web 2.0 insight and advice, summarized as follows:
1. Dogster took a passionate online community and turned into a profitable vertical portal
2. Dogster's secret recipe was:
* selling ad inventory directly
* providing an integrated brand campaign to its advertisers
* turning several sponsor-level brand advertisers into loyal revenue-generating clients at the same financing level as angel investors--1.5-3k/month means 36k/year/sponsor~roughly eq to one angel investor. This can stave off doing angel round and valuation when you do take money higher.
* subscription service with 50,000 dog and cat lovers as multiple revenue stream in addition to ad-related revenue
* Using customer base for everything from QA to Market Research to advertiser lead generation
* Adding real SEO and viral fun to keep growing and reaching passionate customer base.
Some key conclusions to be drawn from Ted Rheingold's Dogster's experience:
A. Don't have to be huge to monetize well
B. Fcus on revenue as much as you do your product
C. Someone has to be selling, always...