After all we have already explored how much more valuable TechCrunch may have been if it had become a MVNO (See The Business of Blogging). So what steps could the TechCrunch team have made to improve on their ARPU of just 9 cents per month? particularly given the strategic direction of TechCrunch has always been more about applying fundamental eBusiness principles to help optimise the workflow and reduce the costs of delivering traditional media rather than any radical re-envisaging of how the internet and mobile is reshaping the future of media. (See What If: Journalism is the real reason Newspapers are dying?) – This then explains is why TechCrunch is a good fit for AOL. (See What’s on the MobCon Radar for the Web’s Wal-Marts? and Do the Web’s Wal-Marts have a future?)
As I said in The Business of Blogging the tech blogs are essentially Freemium vehicles to sell event seats. Understood in this way the tech blog is really just a large-scale Transactional Advertising workflow process model designed to firstly attract a large audience for free and then convert them into paying conference attendees.
Therefore the effectiveness – and the market valuation – of the tech blog isn’t in its traffic volume or in its advertising revenues but in its ability to convert its traffic into “Bums on Seats” at its events (Think in TechCrunch’s case Disrupt and the old TechCrunch 50). Therefore the strategic objective is to build the brand so it can support a global network of conferences, Workshops and Chapters (Think Ad:Tech).
The quickest way to scale the business to achieve this – assuming you already enjoy TechCrunch’s month traffic of 9+ Million Uniques – is to improve the design of the site to optimise the conversion of traffic into paying customers (i.e. Conference Attendees) and then franchise the blog:conference model on a global scale. Basically turn TechCrunch into a the MacDonald’s of the Tech Start-up Meet, Greet and Exchange Space.
The logic behind this approach is quite simple. Every major city could benefit from having its own TechCrunch media channel bringing the news of What’s Hot in Tech in their town to the rest of the world. At the same time there are any number of wanna be tech bloggers and conference providers with enough business savvy to see the benefits of profiting from operating locally from within the TechCrunch Brand. It solves the problem of building yet another billboard in the desert.
The key is to come up with an offering that benefits both parties and significantly expands the reach of the TechCrunch brand into new markets (Think: Asia).
Achieving a Facebook size valuation would be much harder of course. The TechCrunch management team would need to look beyond just being a global conference provider. It would need to find new revenue engines.
The two most obvious ones are to convert the CrunchBase into an entrepreneur, VC and Private Investor Network focusing on making connections and lead generations for VCs, Investors and Start-ups seek to do business and then building an exchange for the TechCrunch faithful to invest and trade in start-up technologies, companies and patents. They could also consider some of the options we have previously explored for Facebook (Think: Banking and Insurance).
Perhaps the most lateral option would have been to turn the TechCrunch brand into the next Starbucks. After all the stock markets of Europe began their lives as coffee houses where entrepreneurs, investors and traders would meet to exchange news, ideas, information and contracts so why not turn the world’s most recognisable Start-up Blog into a place where programmers, designers, marketeers, VCs, Investors and entrepreneurs meet to exchange news, ideas, information, contracts and a cup of coffee. And yes - I’ll say it again - the ARPU on sale of one cup of coffee is at least 40 times more per unique than what TechCrunch is achieving today.
Further Reading
sam
May 8, 2011
great article. Techcrunch is the richest blog in this world that earns some billions in dollars only for their advertising campaigns. I found some related story here as well: http://nichecrunch.blogspot.com/2011/02/secrets-behind-viral-videos-in-youtube_13.html