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Ask HN: Please destroy my startup idea so I don't waste time on it
50 points by rcavezza on Mar 5, 2011 | hide | past | web | favorite | 37 comments
Problem:

1.) Hard for Content Newsletters to Find advertisers and sponsors.

2.) Very difficult for startups who want to advertise in newsletters to find similar newsletters to advertise in. (no central location - have to find advertise area on website for each newsletter or email publisher directly for smaller newsletters)

This isn't just something that's new for newsletters. I believe this was inherited from direct mail from magazines and publishers. I remember pursuing a startup idea in high school, looking for ways to reach out to highly targeted magazines, and being pointed to a directory in the library. And even the library didn't have that directory.

My Solution: BuySellAds.com type of website for content newsletter publishers.

My Minimal Test:

Advermin.com - Performable Landing page to see if there's interest in this. Landing page hooks up to mailchimp. For first few weeks, I'll send advertising opportunities from friends who own content newsletters - see if there's interest and if we can pick up steam.

Finding if publishers are interested by using howtosubscribe.com to find newsletter publishers.

My Concerns: (1) Too small of a market. Some of the data from EasyUnsubscriber.com shows me that most email newsletters are from newsletters that are selling a product or service or are extremely interested in driving traffic to their blog.

(2) The larger newsletters (highest value customers) probably don't need someone to find opportunities because they're popular enough to attract advertisers directly.

Target Newsletters include content newsletters like HackerNewsletter and Startup Digest.

Final Plea: Please poke holes in this. Tear me apart. Spit on my ideas. I want to save time and focus full attention on easyunsubscriber.com if this idea isn't worth pursuing. All input appreciated.




(disclosure: I founded BuySellAds.com)

I think it's a great idea, actually. At BSA we've been talking about newsletter ads for a while, but haven't been able to commit to executing on it properly. We went as far as acquiring the NewsletterAds.com domain, but have since stopped there. One of the biggest hurdles with selling ads in newsletters is getting enough valuable inventory. Even with our existing publishers (and with 150-200 new sites submitted every day) we would struggle to have enough meaningful inventory to put together to sell. That being said, I had many people tell me the same thing before I started BSA - that I would never be able to get enough inventory together to make it work.

The other piece of advice I can give you is that operating at 25% commissions (like BSA does) is definitely a bootstrapping path. If you can sell ads in newsletters that they aren't already selling, then it's something I would do at a 35-40% level. Maybe that sounds crazy, but if you're able to make sales that are normally not made you can charge whatever you want.

So, I'd say go for it, hustle, and make it happen if you are passionate about it.


I'm in an office adjacent to you - nice job on BSA. ;)


nice! let's grab a coffee or beer or something one day, I'd love to hear more about what you are doing with http://datatrailer.com/. shoot me an email (todd@buysellads.com) or just swing by and knock on the BSA door.


Advertising sales is really hard. You can create a marketplace and get connected to a bunch of newsletter publishers but then you need to convince a whole heap of people to give you money.

Publishers are also (usually) particular about what kind of advertising they run in their emails. They want to make sure that it's "on brand" because if it's not then people might stop opening or reading their emails.

It's the classic problem of the 2 sided marketplace but the easiest way to start out here (IMHO) would be to find a newsletter or two and go out there selling their inventory. When you're oversubscribed go and find another relevant newsletter and sell their inventory. Wash, rinse and repeat.


Thanks for the comment nedwin.

If nothing else, I'd like to at least make it easier for startups and small companies to have somewhere to find what these requirements are. Maybe this ends with howtosubscribe.com being a labor of love to help organize the net's plethora of newsletters.

If your proposal of selling one or two and then expanding from there. This idea would probably be suited better for someone with history of selling newsletter ads. For me, it'd be a problem of being the "wrong person to execute". Something I hear Chris Dixon & PG mention a lot.


I guess that in the early stages of your idea your in a way going to have to be selling the inventories anyway, not going to be easy to build both sides of the market without some legwork on your part. One of the advantages to being small I guess is you can actually go above and beyond to broker deals rather than only having time to really be doing it passively through a webapp.


Great point. It'll be a solid way for me to gain some domain expertise at the same time.


Marketplaces often flop when the people who build them don't fully understand the market they're facilitating.

I think the exercise in the brokering of selling newsletter ads, even on a small scale of one or two customers, will be truly valuable in achieving understanding of the needs of the platform before you dump precious time and resources into building it.

I wouldn't write off that idea too quickly... As an added bonus you can make $$ doing this from day 1, before you even have a product.


Great points.

1.) It gave me a realization that I may not be the best person to execute this, but I can sure as hell give it a shot.

2.) I can do this in the short term to prove there's an issue, but it's not scalable.

With that being said, I'm still going to pursue this in order to prove concept and make some cash.


What is this 'wrong person to execute' nonsense? You're only limited by your imagination and ability work hard towards your goal. I'll take passion over expertise any day.


I guess it come from reading investor's startup blogs. I'm going to do the 37 signals thing and try to do as much as I can until it's not physically possible.

If I was raising investment (plan Z), I'd try to find a team member with ad sales experience (or maybe an advisor).


We run a niche, high-value newsletter and so from experience, I think there is a market for this.

To validate, I'd find a newsletter(s) you think you can sell an ad(s) in and talk to the newsletter creator and say "If I can get you a sponsored ad for $x, would you (1) want it and (2) give me a Y% cut?"

If you get positive response from them, then try like mad to sell the ads you promised.

I'm not sure the size of the market but given how much Bob Pittman, Lerer Media and the guy at HARO like email newsletters, there is prob something here. We think so.

Also, IMO, I don't think startups is a great demographic from a monetization perspective unless you can slice it more finely, i.e., venture-backed startups or startups who are hiring.


Great points. From lean startups & cust dev principles, I think you should start charging from day one.

Well, the margins would come from venture backed startups looking for high growth.

I am also a huge fan of lean, so personally, I'd also like to hook up very small newsletters (less than 5,000 subscribers) with bootstrapped startups. I also think these newsletters would be easier to start with - since many aren't monetized yet.

I already have one newsletter signed up for this. This idea came from when I pitched a different startup to them and they thought I was talking about this idea. They said "if you do this, I'll be your biggest advocate". So that's why I'm considering the idea.


Glad to hear of market validation you've done.

I'd caution against small newsletters which may have low-value audiences. The "CPM" you'll get will be low and so $20 CPM on a 5k newsletter is $100 and if $80 goes to newsletter, that gives you $20. (And $20 CPM may be very aggressive)

You have to find and get an absolute cr^pload of those newsletters on board to make any amount of real cashish.

And bootstrapped startups as advertisers strikes me as a terrible segment as they have little to no money and may often be PITAs.


Addressing your comment below as I couldn't find a reply on your comment.

Why go into a business with terrible margins from the start? Usually successful biz have great margins to start and then those get eroded with competition, technology, etc?

In general, it also seems easier to go from big to small vs the other way. If I'm a large newsletter owner, I want to know you've worked with folks like me. I don't care that you've done work for 100 newsletters of 5k people.

Waiting on bootstrapped startups to get funding and hoping they'll continue with you is dependent on lots of variables you have no control over. Business is already uncertain and this is just compounding that uncertainty.

I'm all for validating the market but do it in a lucrative area in my view where there is a real ROI on your effort.


I agree. The margins on this are pretty terrible, and it's not a long term scalable model, but I think it's an easy way to get a foothold in the market.

Here's my thinking (please feel free to tear my logic apart):

(1a) The very small newsletters will be much more likely to signup. (1b)The bootstrapped startups would be very interested in relatively inexpensive ways to target (other than Adwords).

I think 1A has been semi validated.

(2) Success with small newsletters will help show larger newsletters than this model can work. Will probably transition from very small newsletters to medium, to large.

(3) Some bootstrapped startups will grow, get funding and continue to use us.

There are some jumps in this logic, and it would need validation.


Personally, I think you are thinking too small. IMO there is a larger opportunity for a marketplace to buy and sell promotion for the long-tail of the web (niche content providers and small startups selling to a niche audience) across many mediums including newsletters but also company blogs, social media presences, forums, etc. Buysellads.com does it well, but I think there is room for another player who can execute in slightly different ways.

I actually have been thinking about this idea for a while and would love to chat more about it. I've been working on a travel industry startup for 2 years that has had a difficult time finding great/targeted advertising opportunities.


It's a really hard problem. I worked at a company that tried to create vertical ad networks that would allow advertisers to tap a large pool of related content. A lot of pieces have to come together for it all to work - finance, technical, and high-touch things like having a direct sales team and managing publishers (recruiting them, getting your tags up, etc).


Let's talk more. Couldn't find your contact info - bob@easyunsubscriber.com


Besides not being a subject matter expert, I don't have any evidence to support this assertion:

It feels like you're looking to get involved in an industry that's being disrupted (unless e-mail newsletters are going to continue in their current form, which I don't believe), but that your idea isn't causing this disruption. I feel like there's a pivot somewhere here, after some more time on it.

So in essence, I'm giving you the opposite of what you want; I think if you start looking into this further, you may hit upon the true solution. At least it sounded to me like you had the knowledge and interest to make it happen.


I actually like the idea a bit. Chicken and egg problem for ad networks is difficult, but not insurmountable. I can tell you that there are many big newsletters out there that are under-monetized. It' not about spamming, either, it's about providing a quality offer that makes sense for the audience. Feel free to reach out to me if you pursue this (you can find me through my profile).


You may want to checkout http://www.heyamigo.net and http://www.barenakedapp.com/category/amigo/

HeyAmigo sounds like exactly what you are talking about. It was built by Carsonified a few years ago and sold (I think). The Bare Naked App blog was a chronicle of them building it.


Thanks for the link. I just visited and toyed around. I hate to be "that guy", but I didn't really love it. Does anyone here use Hey Amigo? What do you think? Good results?


I have a small but growing daily stock-related newsletter (3500 subscribers in 45 days). So far, I really have no methods of monetizing it and the monthly sendgrid bill doesn't pay itself. If that service existed, I'd give it a try.


Its a niche market. You have specifics. Sorry, I kind of like your idea. After a zillion "its like teh facebook of x" or "its kind of a social-ad-media-blogging deal", that's really refreshing.

I'm not going to be able to shoot down an idea this specific, Content Newsletters are. Find a few. If they think its a good idea, see if they'll pay you something, or even trial some stuff for you. You should be able to quickly determine if there's anything here worth pursuing.


who the hell signs up for newsletters? interesting how your other business was created because newsletters are lame.

these problems don't seem like ones normal people deal with. they're just problems for people trying to add something to their domain squatting businesses. spam my inbox with lame content, and then spam the newsletter with ads? ugh.

how about, people want really good content through email (huge assumption), but great content publishers aren't publishing content due to low advertiser involvement. the service could hook writers up with relevant advertisers who could add something to the conversation, giving the user something other than a text ad or banners. if it's a small market, the service could be very specialized and deal with people/advertisers individually.

but honestly, there's probably more money in viagra ads than there is in email newsletters.


Many people sign up for email newsletters -- in fact lots of people spend their whole day in Outlook or on their Blackberry, so it's far more convenient than configuring an RSS reader. More people send/receive email in a given day than run a Google search or check Facebook.

Ads in an email newsletter that you intentionally signed up for is no more "spam" than ads on a website you routinely visit is "spam."


I'd also like to add that well targeted magazine ads can even ad value. Who is to see this can't translate to email newsletters?


sending email in a day isn't the same thing as reading newsletters. and ads on websites are spam. they usually don't engage, add value, or do anything worthwhile.


Debunking the 'who signs up for newsletters':

- woot.com members (I would HATE to miss a Woot Off)

- Groupon.com members

- Calacanis' newsletter subscribers

- Dan Lewis' "Now I Know" newsletter (best ever)

Eh, there are many others, but those were the top 4 in my gmail (minus Woot, which I just thought of first).


It'd be interesting to add an A/B testing twist to this--provide value-add to advertisers and newsletter operators by providing them visibility into click-throughs, and then spiffs to the newsletters for going with the better path. But you'd need volume to do this.


I don't read newsletters.

While some do, their use is dying and being replaced with new forms of social media. Even if your business becomes huge, it's going to be facing a market that's declining. That doesn't seem like fun.


I know it's not exactly what you're looking at, but it brought The Deck[1] to mind. Carefully curated high-quality advertising on select sites.

[1] http://decknetwork.net/


Can't remember where but I saw a service that described itself as "buysellads for e-newsletters" the other day.


its a massive market. the problem is the targeting. how do you target ads appropriately? everyone wants the high CPM ads, but nobody knows how they will perform. and you have to do a separate mailing each time


I don't think I agree about massive market. There's a large # of newsletter publishers that don't advertise. Thing of every SaaS newsletter promoting their own sales, Best Buy and their newsletters, Groupon doesn't directly advertise (this distinction is somewhat complicated).

Selling ads appropriately is also extremely difficult. Click-thru rates is another issue, but I could probably overcome this issue with unsubscribe rates data from easyunsubscriber after it finds P/M fit.

I don't think a lot of this stuff is public unless SendGrid/MailChimp/et al has open APIs which I doubt. I think publishers often fudge this data and if their open rates are bad, they inflate the numbers of don't mention them. Very difficult to monitor esp. since the data isn't open.

Do you advertise in newsletters or publish one? I'd love to hear more of your experiences.


Pivot to "appsumo + groupon for email newsletters" :)




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