138th 1M/1M Roundtable For Entrepreneurs: The Free Rider Problem
During today’s roundtable, we had two pitches and two discussions with 1M/1M premium members.
First, Eyal Eldar from Tel-Aviv, Israel, pitched instruMagic, an iPad app for playing songs on a guitar. Eyal is working with one of the largest sites for sheet music distribution and his game plan is to go to market through them as a starting point. As someone who has played a musical instrument, I appreciate how time consuming it is to learn to play, and how much practice it takes to get good. Eyal is making this process easier by having the app play the chords (bass) and the user just playing the right hand (treble). I love the concept, although, I am not sure if this is necessarily a large enough business opportunity to attract institutional capital. For bootstrapping, it’s perfect!
Then Atul Singh from Daly City, California, pitched Fair Observer, an online media site for deep analysis on current affairs a la The Economist. Atul wants to crowd source a range of contributors from around the world, and monetize via sponsorships. He wants to raise $1 million.
Unfortunately, the online media business model is deeply broken, and the only companies who have succeeded are The Economist and The Wall Street Journal. They have great subscription businesses. Most of the rest of the eco-system is struggling with declining CPM rates, and the smaller publications have a hard time monetizing at all. TechCrunch did a very good business, but it was a bootstrapped company, by and large. In general, the Internet is today a colossal free rider problem. Hence, building businesses is harder, especially in domains that have large masses of customers who expect everything for free.
In other words, this company will either need to be bootstrapped, or, it will need to raise money from individuals or funds who have other agendas than financial returns.
Also, Erika Brodnock from London, England, discussed Karisma Kidz. Erika is a 1M/1M premium member, and she is in the midst of negotiating a minimum viable product for her educational gaming company. Erika stopped by to discuss the budget for the MVP development project.
Finally, Victor Alexiev from Sofia, Bulgaria, discussed Pool Talent. Victor is a 1M/1M premium member as well, working on an online jobs venture focused on high-end software developers. Victor is trying to work out a validation strategy, a go-to-market strategy, and a financing strategy. Victor needs to spend some time digesting the curriculum on those topics, and we can pretty much define the strategies soon after. A lot of what he needs to learn is adequately tackled in the curriculum.
You can listen to the recording of today’s roundtable here.
Sramana Mitra is the founder of the One Million by One Million (1M/1M) initiative, an educational, business development and incubation program that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology.