I am Starting a New Social Network or Community Site

If your business startup is a new social network or community site, then there are a couple of things that you should be aware of if you plan on using other people’s money. Most of the business plans I have seen in this space have Advertising Revenue as a main component of their business model. If this is your plan, I recommend you re-think it and find a way to generate revenue from some types of user paid services.

Here is one of the slides used in the infamous Sequoia presentation that shows both overall Ad Revenues and Internet Revenues going down.

 In fact, when you look closely, Internet Ad Revenues (the top line on the chart) are expected to drop by 50%. This is a big cut and those who control these purse strings will look closely at how these dollars are spent. It is going to be hard to get investors interested in your deal if the primary revenue source is ad dollars.

So, spend some time and think through your business model and make sure that the bulk of revenues are not associated with advertising or you’ll have a difficult time convincing investors to invest.


3 Responses to “I am Starting a New Social Network or Community Site”

  1. 1 social media sites August 27, 2013 at 3:01 am

    Very enlightening looking frontward to coming back.

  1. 1 social media today Trackback on August 12, 2014 at 3:14 pm
  2. 2 Try the best tablet PC and tablet PC with quad core CPU. 2LooK Android tablet. Trackback on October 18, 2014 at 5:51 pm

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