
Funding an "Adult Oriented" start-up? - nora
No we're not making dirty movies, but, we've created a neat way to syndicate them.<p>The problem is, we haven't really liked (or felt that we could trust) any of the investors that we've spoken to thus far.<p>FOSS, CC, Design.  These concepts seem foreign to many that we have spoken to.<p>We would rather not take money from a traditional pornography company or an adult investment firm such as AdultVest.  We see ourselves as technologists, artists, and writers who happen to have a clever idea that could change the porn industry.<p>We don't want put ourselves into a position where we're forced to promote content that we find unseemly.<p>Our mantra is:  "Don't be seedy."  And, we aren't.<p>Mixing money and sex has always been a recipe for disaster.  We believe that we can walk that line, but, we want to hedge our bets by finding like minded investors.<p>How do you go about finding respectable investors for an "adult oriented" start-up?
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mixmax
A fried of mine is into the alternative sexscene (SM stuff...) and runs a club
and a blog. Through him I hear a bit about the scene and meet some of the
people. One thing I have noticed is that there is plenty of money in porn, and
most of it is in specialities. The reason for this is that there is an
abundance of mainstream porn available for free pretty much wherever you look,
but if you're into something weird it is much harder to find, and thus there's
a paying market for it. I heard the numbers for a site that does a weekly
liveshow with some pretty serious SM and they are making very serious money.

I've also noticed that some of the consumers of the more specialised porn and
upscale swingerclubs are wealthy individuals in their 40's and 50's. Naturally
these people have a very open view on pornography and adult-oriented startups.
If you try networking a bit in the upscale swingerclubs in the big cities
and/or the well-run specialised sites you might find an investor. These people
are mostly very open and very nice. Probably because they, like the gay
community, are an outcast niche that has to constantly defend their sexuality.

~~~
kaens
This is exactly what you should do. I've got quite a few friends in the
swinger crowds, and if you're going to find a good, mature, financially
responsible investor for a really good adult-oriented idea, your best bet is
in the upscale swinger community.

I'll confirm that they're a mostly very open and very nice crowd, and there's
a higher proportion of wealthy and intelligent people among them who would
_love_ to invest in a good adult-oriented startup - especially if it's a fresh
idea.

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stcredzero
Re: "a clever idea that could change the porn industry"

I think a lot of consumers of porn are interested in short clips (5-10 min) of
_consistently high quality_. This is a niche that isn't well served yet.
YouPorn and the like is a grab-bag of short clips -- You can rummage around
and find good content, but isn't a place where you can just go, press a
button, and know you'll get something with good content, tailored to your
tastes, with high quality sound and video, instantly the first time. An
application that presented tailored "channels" as a TiVo-like application
would stand to make a lot of money.

Studios and other porn content producers would like this if it could guarantee
them a payment for their content, provide data on the viewing habits of users,
and add user interfaces so that a consumer could click a button to buy a DVD
or other product.

~~~
mixmax
I don't think people will pay for it though. Streaming high quailty content
requires both good source material and a lot of infrastructure - none of which
are cheap.

~~~
stcredzero
Note that I said that the functionality was "Tivo-Like." No streaming is
necessary!

You have content organized in "channels." You start out with very small
resolution and short streaming "previews." But once you subscribe to a
"channel" the application starts downloading longer Bittorrent "episodes" from
torrents that are posted to an RSS feed. So there is an initial period when
people only have access to "previews," but after the first night, it really is
like a Tivo for short high-quality porn clips.

With Bittorrent, much of the bandwidth is provided by the P2P cloud. The
bandwidth costs are for initial seeding and for the shorter, smaller
"previews."

So really, the two keys to this idea are:

    
    
        1) Packaging - the easy place to find high quality clips
        2) The users bring their own bandwidth
    

I know that when I watch a porn DVD, what I'm really doing is going to my
favorite one or two clips in the chapters menu. It's like in the old days when
you had to buy the whole CD just to get the 1 or 2 tracks you really loved. I
suspect that the market for really good, really short clips can come into
being. Once one site shows that money can be made this way, then a lot of the
high-quality free short clips will shift their availability to such pay
channels, just like the shift from Napster to iTunes.

~~~
rcs
stcredzero: Are you a coder? A designer? It's obvious that you've thought
about before! Would you have any free time in the next month?

~~~
stcredzero
Yes, I am a coder. And yes, I've been thinking about issues surrounding the
delivery of content since before YouTube. And I am considering quitting my job
and living off savings to do personal projects.

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answerly
Is there any "non-adult" application of your technology/process/methods? If
so, one strategy may be to show that this will work with many different types
of content and not just adult content. That way you go from being a purely
adult oriented company to a technology company with multiple markets, one of
which happens to be the adult industry.

For example, the ad network Adbrite operates one general purpose ad network
under their main brand and another adult version at blacklabelads.com. They
have traditional investors, including Sequoia.

~~~
rcs
There is, and we've shifted focus from the adult aspects to the non-adult
aspects, but, it's not as much fun.

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nuggien
stop lying to yourselves. You're in it to make money, so if you have an idea
that think will change porn, why not jump in head first?

~~~
rcs
Who said we were lying to ourselves? Of course we'd like to make money, we
hate our jobs and the soul crushing banality of the 8-6 workday, but, enjoy
eating.

We have no real moral object to porn or the porn industry.

We have a proof of concept, we just can't continue to do our jobs, work on
FOSS, and work on this indefinitely.

We need funding to realize our dreams, hence the title. :D.

~~~
Frocer
Why not work part-time on it, then once you get a bit of traction, then look
for investment?

I mean... if you work 8-6, what do you do from 6-12? Just a thought...

~~~
truebosko
Spend time with friends, loved ones, other hobbies? Life can't be all about
your work, even if you do truly enjoy it.

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vincentvwyl
A friend of mine did research about exactly this topic as she ran a startup in
that same space. She wrote a thesis about it. Send me an email and I'll glady
put you in touch with her: vincent /dot/ vanwylick /at/ gmail /dot/ com.

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vaksel
I don't think the respectable investors would want to sully their reputation
by funding porn.

~~~
rcs
Not quite true. Zivity.

~~~
rms
Still, "no adult stuff" is pretty much the rule in Silicon Valley.

~~~
jonknee
Who said respectable investor means Silicon Valley?

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jseliger
You might want to read <a href="[http://www.portfolio.com/culture-
lifestyle/culture-inc/arts/...](http://www.portfolio.com/culture-
lifestyle/culture-inc/arts/2007/10/15/YouPorn-Vivid-Entertainment-
Profile)">this article from Portfolio magazine</a> before you approach
investors: they read plenty of things too and are well-aware of the problems
with the industry. The big question you have to answer is whether you can make
money in the kind of environment described by the article.

Anyway, not to ask the obvious, but have you applied to YC?

~~~
nora
We did. More as a lark than anything else. We weren't surprised when we
received the rejection letters.

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Dilpil
You seem to have some unrealistic expectations about the pornography industry.

~~~
rcs
Not true. We just don't want to lie down with the wrong dogs :).

~~~
feverishaaron
There are so many dirty connotations in this thread. I don't even know where
to start.

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shimon
On one hand, this should be similar to finding investors in any industry: Look
at work that you admire. Figure out who built and funded it. Figure out how to
get into their social circle -- start where you can, and work your way to the
right people by earning respect. And make sure you live in the right town (Van
Nuys?) so you can be around the critical mass of people.

On the other hand, porn is special. The heroes of porn don't get famous for
being smart or having great blogs. You probably have to wade through a lot of
seedy people and organizations to find people whom you consider like-minded.
You might never find them; perhaps you're better off working on a new-to-porn
investor.

~~~
danielh
They don't have blogs, but there are a couple of big adult webmaster forums
where they hang out.

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greyman
Maybe I am going to burn a few karma points now, but my advice would be -
don't do it at all. If you put a leg into porn industry, it will leave a
stigma that you will not be able to get rid of for the rest of your life..it
will forever be attached to your resume.

>> Mixing money and sex has always been a recipe for disaster.

Well said. ;-) You can obviously make money with sex, but you will pay the
price after all. No loss, no gain.

~~~
villageidiot
I don't know if I would go so far. But I agree that a certain amount of
caution should be applied here because of the obvious career risks to a move
like this. However, one strategy someone could take would be to conduct their
porn experiment simultaneously with a legitimate venture so that there are no
experience gaps to account for later - just one example.

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rcs
If someone out there has advice but would rather remain anonymous by all means
please contact us: christopher.m.pike(a)gmail.com.

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einarvollset
Talk to the Kink.com guys.

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dpapathanasiou
The story of the "Wanted List" guys might be of interest:
<http://www.wired.com/wired/archive/13.11/porn_pr.html>

~~~
rcs
We're familiar with the article. We actually have that issue of Wired in our
bathroom right now.

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neilk
Maybe you should get in touch with Kink.com. I know a number of people who
work there and it seems to be a good organization, and in its own way very
scrupulous.

~~~
rcs
Is there anyway that you could arrange an introduction? I would appreciate it
immensely!

I can't promise much, but I could gurantee free porn for life to you and your
children (though your grandchildren will have to fend for themselves) should
anything come of it. christopher.m.pike(a)gmail.com

~~~
neilk
I don't know who you are, so I hope you don't mind if I decline to introduce
you. Besides, the only people I know are website programmers and helpdesk
people. If you are serious about your proposals you will find some way to
contact the business side of the org.

Lucky for you, by law they have to post their mailing address (and, for what
it's worth, these are the real offices.)

<http://www.kink.com/2257statement.php>

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Nick_H22
Hi there--please email me your contact info to: nick_hudson22@yahoo.com. We
can carry a conversation from there :)

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davar
what type of money are you looking for?

~~~
rcs
Angel.

