Ask HN: Site is growing over 500,000 users/yr, to VC or not to VC?

https://news.ycombinator.com/item?id=6555353

by astrowilliam • 13 years ago

10 22 13 years ago

news.ycombinator.com

I have posted here a few times discussing my startup, http://spaceindustrynews.com . We've had a few talks about bringing in VCs to help fund the site.

I'm still open to VC help but I'd like to test the waters and see what you think about going it alone or with content partners ( I've gotten a few since last we talked ) and doing it 100% myself with a little help from my friends.

I have a day job that pays my hosting bills. The site is gaining traction and has grown since last year. The first year from June 2012-June 2013 brought in 500,000 unique users. This year ( June 2013-October 2013) so far I've reached 240,000 users already, putting me ahead of my first year by a bit.

The burning question is, how to make more money from ads on the site and where I should take it in order to get to the next level which I am aiming for, 1,000,000 users/yr.

My budget allots a little bit of $$ for advertising on other sites/facebook/twitter/BSA, which will raise awareness. I'm slowly cultivating fans with this ad money.

In your opinion, what would you do in my situation? Hold out for a little longer and see if a VC approaches? Or go it alone and be a successful 1 man show?

Thank you for your time, I appreciate all of your opinions and help.

nickler• 13 years ago

Great job so far!

Funding decisions should always be about goals. What are the goals for raising the money here?

VC's want to see how a 1x investment turns into a 5x return. If you can't communicate that now, it might be a rough pitch.

It sounds like you're on the right path, see if you can squeeze a revenue stream from advertising and continue to iterate on that. If you can prove (to yourself, first) that an investment in advertising your site will significantly change those revenues then you can start considering VC capital.

I would suggest reaching out to partners that can help you with traffic first and foremost, a VC will want to know that you can manipulate the growth levers, not just organically.

In the meantime, keep up the hunt for an angel who's as excited about the space as you are, they're the best fit because they'll share your vision, invest in infrastructure, and be a little more patient.

Remember, funding means added pressure to perform, and milestones that need to be hit. Make sure you're ready for those pressures before you take the check!

Good luck!

astrowilliam6• 13 years ago

Thanks for the honest reply. I'm working with different ad rev streams right now, CPM, affiliate, in-image and soon to be providing more videos as well. I believe opening up a multimedia portion of the site will attract those with a short attention span (like myself) and grow "sticky" content.

My father always taught me that slow and steady wins the race, therefore I'll be investing in this site for the next 5-10 years. I'm in it for the long run.

To be honest, I haven't even started the hunt for an angel yet. I don't really know where to begin, except here on HN. Which seems like a great resource. I'm trying to focus on making my product as good as it can be, and then making it even better.

socialmediaisbs• 13 years ago

Go it alone as long as you can.

astrowilliam6• 13 years ago

Why so? I plan on going it alone for the next 5-10 years. This is my true passion and I don't intend on stopping any time soon.

Guest978120• 13 years ago

Why do you need investors? Is a lack of funds holding you back at the moment? I run a site with 6 million uniques a year, and half a million registered users. I do it alone.

Investors sounds like a headache. Right now my site pays for itself, and my life. If I want to take a month long vacation, I go on vacation. If I had an investor, I go back to having a regular job, and answering to someone else. That has very little appeal to me.

This works in my situation because my project is fairly polished at this point, and the content is entirely user driven, so I simply work on sorting out the occasion bug, managing the servers, and carefully planning the direction to take the site, and features to develop. More money, more offices, more employees wouldn't bring anything to the table, aside from more stress. If you have a project that needs people out there selling, that needs people writing content, that needs more developers, or that needs more capital, then maybe you do need an investor. This isn't always the case though.

sixQuarks4• 13 years ago

Quick question: Do you have an email newsletter? I didn't really see anything on your site. If not, start one RIGHT AWAY - and promote it via a popup that comes up after about 10 seconds. Email your subscribers once per week, with links to highlighted stories from that past week.

Your subscriber base will start out small but grow large over time, you will thank me profusely when that time comes.

P.S - I've created 4 different sites that have each attracted over 1 million visitors per year. Secret weapon in all of them has been email newsletters.

astrowilliam6• 13 years ago

I use feedburner for my email form now, but am changing over to mailchimp ASAP.

As far as the popup goes, I've read that the popup method makes people frustrated. Have you found this to be true?

Thanks!

sixQuarks4• 13 years ago

I've never had an issue with the popup. It may frustrate some users, but the pros outweigh the cons by a factor of at least 1000:1 (in my opinion).

Besides, you need to test things out and see for yourself. Remember, the popup is not an advertisement. It's a special alert to let your true fans know that a newsletter is available. Whoever is frustrated with it probably isn't a good target for you anyway.

Jayneil• 13 years ago

I would agree with you on that! Pop definitely annoys me a lot and I would rather prefer instead a built in "Subscribe ME" option at the bottom of the site. I feel a popup in many cases negatively affects a visitor's reading experience.

xux3• 13 years ago

Can you speak more about the newsletters? How did you attract more users? Just through the site alone?

wikwocket• 13 years ago

Here is a ton of information and advice about email newsletters: http://www.smartpassiveincome.com/email-list-strategies/

sixQuarks4• 13 years ago

I captured my most targeted visitors when they happened to stumble across my site. If it wasn't for the email newsletter, they would have forgotten about my site. People need reminders.

You still need to market your site, an email newsletter simply let's you capture the audience better.

petervandijck2• 13 years ago

Let's be clear, and correct me if I'm wrong, but you don't have 500K users, you have 40K uniques.

When we say users, we mean people who have signed up for accounts. Uniques are unique visitors as measured by Google Analytics and such. Uniques are reported monthly, never annually. The numbers you mention are vanity metrics, the real number is 40K uniques, and it's a fairly low number.

For a content site, until you have at least 1M uniques and growing very fast, there is close to zero change you will find a VC interested in you.

As to your burning question: until you have 1M uniques/month, you will make low ad rates, perhaps $1 or $2 CPM. Once you get over 1M uniques/month, you could theoretically make higher direct sales ad rates, up to $10 or $20 CPM. But this requires sales people.

Advertising on other sites most likely is a waste of money. Instead you should pursue social media and traffic deals for distribution.

Good luck!

astrowilliam6• 13 years ago

I have 500k Unique users, sorry. I should have clarified in my post.

I am far from 1M uniques/M at this point, but I plan on getting there some day. My CPM is around $2 now.

I'm investing a lot of time in social media in the next 2-3 months so I hope that works well :)

Thanks for your time and insight!

petervandijck2• 13 years ago

You have "500K unique visitors a year". Just want you to use terminology that means what others think it means.

$2CPM isn't too bad for remnant. Good luck growing the traffic.

livestyle• 13 years ago

Wiiliam you should email me at tom at buysellads.com

We can def help you out on the monetization side of things.

Plus we are bootstrapped and profitable too. We love helping other self funded startups.

Ask HN: Site is growing over 500,000 users/yr, to VC or not to VC?

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