Digital DNA

Two things happened to me tonight: I went to an Internet People open mic session in London and when I got back home, I read Robert Scoble’s latest post – Web2.0 consolidation ahead?

And it made me think.

The Internet People open mic session was all about the lessons that the gathered London entrepreneurs had learnt. After the usual “you have to have passion”, “partner with someone you trust” kind of advice, Chris Ward (founder of isporty) stood up and said something along the lines of, “Closed networks can no longer scale in the UK, and, therefore web start-ups cannot rely on revenue models that require scale”.

I know Chris well, and have heard this view a few times whilst working with him. But it’s not until I got back home, and read Robert Scoble’s post (posted roughly at the same time Chris was talking – spooky), that I really started thinking that they are both talking sense.

Advertising is great, but start-ups need to do the maths to work out what traffic levels are needed to match their revenue needs. You need sites of scale to bring in £10K or more of CPC revenue every month. It is imperative, therefore to look for other revenue streams. Chris and isporty are aiming to make money first and foremost by offering social media tools and expertise to sports-related brands. This may well be their unique way of making enough money to give the site and company time to grow and develop.