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Bite.
(4 minute read.)
Imaginary Shark Tank.
I wrote what's below some considerable time ago (Nov 2012), since when it's had just a very minor edit.
It's here largely for amusement, although it does actually provide some insight and clarity to how I operate.
Probably just an inevitable consequence of a f***ed-up psyche, I sometimes play-out pretend scenarios in my head. Here's one such example, for the well-known 'pitch your business' tv-show.
Of course it's silly, but hey… when did I ever pretend to be sensible (or sane)?
Hi, I'm gulliver.
My business is Honk Radio. (Yes, daft name.)
We're an internet radio station, broadcasting a mix of business-talk and music, 24-7-365 globally.
Our programs include news, commentary, interviews, features, advice, etcetera, with content from-and-about most of everybody-who's-anybody in business.
The music is drawn largely from 'The Rolling Stone 500 greatest songs & albums of all time', plus other appropriate stuff.
They're available through multiple 'channels' (stations), some of which are geographically-localized or oriented around a specific business niche, each with a distinct personality and ratio of talk/music.
Much of our content will be the type of stuff that's in the major business magazines (Inc, Entrepreneur, Fast Company, Forbes, BusinessWeek, HBR, etcetera).
And most of our audience will likely be the people who read 'em.
We're an about-to-launch start-up, so any numbers here are purely projections.
Our realistic semi-regular audience size is 10,000-75,000 (that upper-end is less than a tenth of the readership of any of those previously-mentioned business magazines), each of whom will likely listen from 1-50 hours monthly, either live and/or through our on-demand catch-up service.
Primary revenue is from on-air advertising, with below-norm rates to increase uptake and reach businesses who don't usually advertise in this way, and is about 10 cents per hour per listener. Secondary revenue is from pay-to-play host fees.
By outsourcing, we can run this simply and inexpensively (literally a handful of people working remotely).
There's too many options and variables to be specific about profitability. So beyond 'about 5 cents per hour per listener', I'll settle for 'more than adequate'.
There's potentially two likely outcomes:
1) This stays relatively small… revenues of maybe $2mil-or-so (based on the lower-end of that audience size), with pre-tax profitability of about 25%. That should happen just by hangin'-in-there long enough.
Or…
2) We get much larger. And that's the plan; to exit low-and-early… build this reasonably quickly, and sell within 2-3 years for 'at least several mil'. Somebody else can then build it bigger and make proper money.
This is an Internet-based project so that assumption is viable, and even if turnover doesn't support that price it's gettable because of a) numbers are often skewed upward in web business, b) the potential, and c) a premium on a fun and probably-unopposed business.
There's currently no significant competition; most business audio is podcast rather than radio-format.
Of course, at such an early stage this is highly speculative. And entirely do-able.
We'll get interest because we're novel. And keep that interest because we provide something good, and useful.
Will that talk+music mix work? Maybe not, in which case we simply remove the music and focus on talk.
Overall, common sense suggests that if one company can build a business which has at least 750,000 people paying to read magazine and online info, we should be able to do it with audio. And it's five (rather than one) businesses which have done that, and we're only after an audience size much less than one-tenth of each of theirs.
Figures for radio audience show continuing good growth in recent years, with rises in both the number of listeners and hours listened. And podcast advertising has become more effective and higher-priced than print and other alternatives.
Although we can start this with almost no money and fund ongoing activity from revenue, some walk-around money will be useful, and so we're open to appropriate investment… up to $30k/10 per cent, on a valuation of $15k for five percent of the business. (And yes, if appropriate I'll split that five percent to two-and-a-half for $7.5k.)
Of course we currently can't possibly justify that price… the business simply isn't worth it right now; but it's what we can get from someone-somewhere, and should offer a more-than-adequate (probably 20x) return when we cash-in and walk away.
That's the rough outline, and I'm sure I probably missed something. So, questions, please…
Do I expect to be taken seriously? No.
Do I expect to build the business as outlined? Yes.
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