VV Show #49 - Rafat Ali of paidContent and contentNext
Attention entrepreneurs dealing with the current economic downturn: This interview is for you. After working as a journalist for Jason Calacanis at Silicon Alley Reporter, Rafat Ali ended up broke in a market with a dearth of employment opportunities. To try to find a new job, Rafat created paidContent.org as an "interactive resume." Luckily, no one hired him. From these humble beginnings, Rafat bootstrapped his blog holding company, ContentNext Media, for four years before taking a small investment from famed media investor Alan Patricof in June 2006. From its inception paidContent has doubled revenues each year and was recently acquired by UK-based Guardian Media Group for a rumored $30 million. Listen in as Rafat outlines the past, present, and future of online media, while sharing his war stories from another uncertain economic time.
1:35 Early career
3:25 Worked for Jason Calacanis
4:48 Working at Inside.com - "Timing was all wrong."
7:50 Learning on the job with paidContent, "I had no idea, zero idea."
8:45 Growing and getting the word out - "It really did spread by word of mouth. There was no other way."
9:20 Launch of mocoNews.net, a sister site covering the mobile space
9:45 June 4th, 2002: The exact genesis of paidContent
10:57 "People thought that you would have to pay to access websites because the online advertising market had crashed."
11:33 paidContent covers "all the ways in which content gets paid for."
11:45 paidContent becomes a full time gig
14:03 Heeding the advice of Seth Godin: "A downturn is the best time to start a company."
14:15 "I actually did e-mail [Seth Godin] a couple of years after that 'you were one of the catalysts that helped me decide'... and he never e-mailed me back. And I'm kind of still angry about that..."
15:05 Early days and a limited budget
15:30 "There were at least two times I remember when my bank [account] had zero balance."
17:23 Advice to entrepreneurs: Get your finances straight
18:53 The blogging lifestyle
19:04 "I had a phone and an internet connection. That's all you really needed in my business."
19:47 Early attention and awards
21:11 Was it fun?
22:04 From a blog to a business
25:10 Early revenues: "high five figures" after 2.5 years
28:20 4 years of bootstrapping: First investment came in June 2006
28:58 On receiving "a few hundred thousand" in financing from media investor Alan Patricof: "his validation was huge for us." They never raised any more money.
30:15 The financing process
32:18 On Alan Patricof: "Immediately I felt like he got (our business)."
33:11 Giving structure to the business
35:32 Post-funding growth: new sites (contentSutra, "covering India's digital content market"), conferences, seminars, research reports, and jobs sections
42:41 Main revenue streams: conferences, advertising, and sponsorships
43:40 Biting the hand that feeds you, i.e. reporting on your own advertisers
46:43 Competition: "It's not a cliche... having competitors in the market helps you define yourself." Note: One of the competitors was co-founded by Kevin Ryan
48:48 On dealing with the rumor mill: "We don't publish rumors."
50:45 "A gossip rag is tough to monetize."
51:23 "You can't define blogging as one industry."
53:22 "We will probably see some more consolidation in the [online media] industry [in the next six to nine months.]"
54:40 Current state of ContentNext: 25-27 people, will add more but being careful, given the current economy
55:40 A "few million" in revenue
55:52 "We've doubled our revenue every year... and are on track to do it this year."
56:17 On the economic slump: "Because we have multiple revenue streams in multiple countries, we will be able to weather [the downturn] a lot better."
57:03 The exit: ContentNext is acquired by Guardian Media Group
60:00 On exit multiples: "Typically some of the big traditional media companies -- and we are not big and we are not traditional -- get anywhere from 3-5x forward looking revenues."
60:51 Keeping the deal quiet: "Tried to keep it quiet... but somebody beat us to it."
64:38 Rafat's advice for media entrepreneurs in the current market
67:10 What's next for paidContent?
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Good stuff Greg. Thanks again.
Posted by: Joe at July 23, 2008 10:28 PM
All right! I can't wait to hear this one.
Posted by: Diwant Vaidya at July 24, 2008 12:52 PM
More, more, more! Love this podcast, & I've missed it.
Posted by: Chris N at July 24, 2008 1:27 PM