

Email Ad Network LaunchBit Raises $960K, Plans Move To Las Vegas - jchin
http://techcrunch.com/2012/08/06/launchbit-seed-round-las-vegas/

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rdl
The Las Vegas Downtown startup thing looks really interesting. $960k in NV
should go 2-3x as far as in Silicon Valley, as long as the founders want to go
there. Tony Hsieh, Zappos, and founders having existing relationships with
Silicon Valley help a lot, I think.

I don't think this would make sense for developer tools or anything where you
needed very frequent in-person meetings with Bay Area companies, but for a
consumer or small business product, potentially a good idea.

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ktsmith
The money should go farther in Nevada but probably not 3x.

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rdl
Housing is probably 1/3 or 1/4 the cost (or less), so I guess it depends on
whether you can compromise heavily on housing while doing a startup vs. other
things. Certainly iPads and Macbooks cost the same in both places. Income
taxes maybe not so relevant.

1/2?

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ktsmith
Income taxes can be relevant, Microsoft licensing isn't in Reno for nothing,
Apple and every other large company tends to pass billions of dollars of
revenue through Nevada due to the lack of corporate income tax. Nevada also
still has no personal income tax. Home prices are definitely lower but it's
only about 1/2 for most desirable areas not 1/4.

Equipment costs are going to be the same of course but access to other
services (bandwidth comes to mind) will be much more limited and in many cases
much more expensive. There also won't be a huge savings on corporate office
space in places like downtown Las Vegas or even downtown Reno.

Companies starting in Nevada will get a bit of a benefit due to the looser
requirements on employee benefits and companies can get away with offering
crappier benefits due to a lack of job availability in the area. The flip side
of that coin is that there isn't a ton of top notch talent in the area. The
top notch talent is making a salary on par with SV or at most 10-15% less. Top
talent is constantly leaving the area for SV rather than moving to the area.
Most of the companies that I know are actively recruiting recruit out of
Oregon and the midwest. Getting people to relocate from California to Nevada,
especially the Bay Area to Las Vegas is going to be a real challenge. Vegas
doesn't have a lot going on for it.

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epoxyhockey
Is there a need for legit email newsletter advertising? Yes. Is it ever going
to happen with a CPC model on a large scale? No.

It seems like LaunchBit is trying to do two things: 1) Launch a new affiliate
network and 2) Advertise spammy products via email (one of their default
advertisers is a teeth whitening product).

It just doesn't seem like either of those things have a very bright future.

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polyfractal
What affiliate network are you referring to?

As to point #2, Launchbit allows publishers to select which ads they want
shown in their newsletter - something you can't really do with any other ad
network. Don't think teeth-whitening products are a good fit for your
audience? Don't run those ads.

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epoxyhockey
_What affiliate network are you referring to?_

That's fair. I should have written ad network, not affiliate network.

 _Don't think teeth-whitening products are a good fit for your audience? Don't
run those ads._

It's not that those ads wouldn't be appropriate for _my_ audience, but that
they are _not appropriate in email marketing at all_. I'm pretty sure that any
list that runs that ad will get marked as spam. Then, any other email that
contains any links similar to that spam email will also get marked as spam. At
a very small scale, one could probably get away with it for a little bit, but
I don't think it will work on a large scale.

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jhuckestein
I'm inclined to give this a shot. My business targets non-tech-savvy SMBs and
marketing to them in a scalable way is tricky. Since it's CPC there's no risk,
I'll report back in a week with some data

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sulife
There's tons of risk. Did you know a TON of email servers and spam blockers
click all the links in emails and analyze what is linked as well? How do you
know you won't be charged for those?

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hippo33
As one of the co-founders, I can tell you that click fraud and bots are
certainly issues with many ad networks. This is something we think about a
lot. We try to pre-empt this by writing algorithms to not count clicks of
known-bots. But, people are always coming up with new bots, so it's impossible
to apriori block every bot. So, we are constantly retro-actively checking
clicks to make sure they are legit. For example, if a publisher yields more
clicks on a given campaign than we predict, we'll retroactively take a look
through a series of methodical checks and in many cases will do a series of
manual checks. And if we find a bot or a ring of folks trying fishy things,
we'll retro-actively rectify the situation, so the advertiser doesn't pay for
those clicks.

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sulife
Will you do any CPA deals?

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rm999
Who still uses e-mail newsletters?

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polyfractal
Plenty of people. Just to name a few in the tech field:

Hacker Newsletter

Javascript Weekly

HTML5 Weekly

Betalist

Startup Weekly

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sulife
Just what everyone wants - ads in email! I predict spam filters will start
blocking must of their crap.

