Crowdfunding the creation of the next version of LFGSS

Is there somewhere on thread I'm missing that has some investment information?

I'm just trying to make an informed rational decision about whether an investment is good for me. The question mark following my first question was hoping for some information about how the business is currently being valued at £500k not looking for a gold star having successfully multiplied 10 and 50

so if i don't have £500 I can't be part of the 0.1%?

#occupycurrentprojects

I want to have a look at the proposal too, once it's up. Mainly I have become confused about the microcosm revenue stream. I understand how buro9 makes money from LFGSS but don't know how microcosm would make money from microwaveenthusiasts.net?

though this would be subject to dilution if and when microcosm receive further funding

oohh he's answered one of the questions

Allegedly

Is there somewhere on thread I'm missing that has some investment information?

I'm just trying to make an informed rational decision about whether an investment is good for me. The question mark following my first question was hoping for some information about how the business is currently being valued at £500k not looking for a gold star having successfully multiplied 10 and 50

Sorry - didnt mean to come across as harsh/sarcy - wasn't sure if you were trolling there - should have added futurama meme :)

I want to have a look at the proposal too, once it's up. Mainly I have become confused about the microcosm revenue stream. I understand how buro9 makes money from LFGSS but don't know how microcosm would make money from microwaveenthusiasts.net?

I think the same way, but with benefits of scale. Obviously I'm not David, but going from info I've gleaned from digging around and reading things...

Buro9 makes it's cash from affiliate links.
Affiliate links can be very profitiable (see MoneySavingExpert and Quidco for details)
Even the current lfgss server has space (and I assume bandwidth) to host a couple more forums if needed
The current software is rubbish, and LFGSS is very hacked to get it to work.
Optomising the software means more forums on less server
Better software means more forums
More forums = more affilate links
More links = more $$$

or something

I suspect that that is a very simplified and rubbish version of the whole thing, and it's what I've put together, so could be totally wrong. Read the proposal, and decide for yourself once it's on seedrs.

Yes, I get all of that, but I had assumed that Mister microwave enthusiast adminwould want some of the affiliate cash for themselves, no?

not sure - from my understanding a lot if not most forums are loss making - the server/hosting costs are more than they receive from ads/affilate/donations - so providing them with a free hosted forum should be reasonably attractive, no?

Free forum vs getting a cut of affiliates cash is a decision for Mr microwaves...

They might, and if they do, they are free not to use microcosm.app.

The biggest bit of the puzzle that is missing there is how easy it is to add in the affliate link stuff to current forum software, and the range of affiliates available through it.

If it's hard to add the affiliatle links, Microco.sm is good.
If Microco.sm can use the cost savings from hosting mutiple forums on it's servers, again, its good.
If Microco.sm can get a wider range of affiliates, it's good (more cash from the same number of links)

Also, if Microco.sm makes it easy to setup forums that look better than other software, people will migrate towards it. If MrMicrowave dosn't move to the better service, maybe one of his users sets up a Microco.sm, and tells people on the old forum of the better place he's found...

Lots of ifs, but thats why it's a seed funding offer.

^
that sounds like a much better explanation of what I was trying to get at/my understanding

the company's biggest asset would be the software itself which potentially could be worth a hell of a lot if it's done right.

running microcosm.app sites itself may not make any money realistically but could keep the company ticking over, licensing the software/access to commercial versions could make megabucks. it's not unheard of for such companies to be bought up so the new owners can get access to the code

The affiliate links can make a huge amount too though. Take a look at the MoneySavingExpert site for example. It's cash is mostly made from affiliate links as I understand it. They have them everywhere, in the articles, the forum (although for the forum, see http://www.moneysavingexpert.com/site/skimlinks )

As I understand it MSE mostly makes it's from the links in articles that it produces though, Microco.sm would be doing it by piggybacking on user generated content, and by the volume of that.

High volume, low cost. I think that given the mockups (and if my reading of them is correct) Microco.sm has a good chance of challenging in places that might not be expected. The gallery pages have potential for example, as I think they look better for sharing and getting feedback on photos than say Picassa or Flickr, and I'd be interested to see more of this sort of page too, buts thats a way out at the moment.

On a totally unrelated note, is it MicroCo.sm, microcosm.app or Microco.sm, or somthing totally diffrent?

Lots to catch up on during the early commute home.

Is there somewhere on thread I'm missing that has some investment information?

I'm just trying to make an informed rational decision about whether an investment is good for me. The question mark following my first question was hoping for some information about how the business is currently being valued at £500k not looking for a gold star having successfully multiplied 10 and 50

Microcosm cannot be valued by it's current revenues as it has none, and normally for a company you'd take such a figure against the costs as well as history and some estimation of future trajectory and do some calculations and figure a fair price for a share is X, and whilst the value of the share is below X you should buy, and above X you should sell or hold.

Without revenue, costs or other factors, early stage startups are valued instead on the potential.

The articles you want to read are: http://www.seedcamp.com/resources/how-does-an-early-stage-investor-value-a-startup
And: http://www.investopedia.com/articles/financial-theory/11/valuing-startup-ventures.asp

Microcosm has identified an area already with a proven revenue stream (affiliate advertising).
Microcosm has identified key differentiators against others in this sector (the new software and that this solves a number of problems for admins and users alike).
Microcosm has the key team in place, and this team has the ability and domain experience to execute in this market (technical skills, domain experience running forums, community management skills, team building skills, etc).

And the killer one, Buro 9 has agreed to migrate this website onto Microcosm. Yes, that's me agreeing to something I propose. What it means though is that there will be 15,000 active users shortly after launch of the new product and immediate traction and revenue accordingly.

As such, we are valued at the upper end (but not highest... we don't have Richard Branson on the team) of the range that Seedrs set, that VC firms and angel investors accept. That range being that a new company in this sector (technology) without as credible a footing generally is valued in the £270k region and the shit hot ones in the £650k+ region.

Further, whilst it cannot be factored in as the approach was to Buro 9. Buro 9 received a proposal for LFGSS early in the summer that placed a valuation on the site at £250k, and then would hire me for a two-year lock-in at a six-figure above market rate salary with equity. Which lets you see how an experienced VC firm has already valued the asset that Microcosm would come to own and one of the team members.

None of the current valuation fully factors in any future potential, just the accepted valuation based on the established understanding used by angels in this sector.

I want to have a look at the proposal too, once it's up. Mainly I have become confused about the microcosm revenue stream. I understand how buro9 makes money from LFGSS but don't know how microcosm would make money from microwaveenthusiasts.net?

The revenue is in the content.

For posts this means affiliate links.
For classifieds a per-listing fee upon sale.
For events, ticket sales.
For reviews, affiliates.

And then fees for perks, such as fully private forums for small organisations, a monthly fee based on usage.

All of those are proven revenue streams, the main part of the proposal and idea is that on their own in it's current form each one would not be enough to cover the costs of a forum today.

But... mixing those together, whilst having a platform that provided a forum at a lower cost, would allow those to be profitable.

LFGSS is profitable, but not massively. Yet it runs on 9 servers which could host another few hundred very small forums, or a few medium forums, or 1 more large forum. If that were achieved it would be very profitable. However that cannot be achieved today as none of the forum software is efficient enough to allow this to occur.

So the basic proposition is that by having more efficient software, that allows a greater number of forums to co-exist on the platform, you can both decrease costs and increase revenue leading to profitability.

The second part of the idea is that the content itself contains revenue streams that have mostly been externalised in forums. Which revenue streams depend on the forums in questions, but some communities use eBay a lot, others use meetup.com a lot, etc. By introducing structured forms of the types of content that are not "posts in a thread" this value that the community has can be brought back into the community itself.

Hence, that we believe that we can increase the revenue that exists in a forum today by doing a good job on the types of content that a community has and fixing the whole user experience and things like privacy around these pieces of content.

Yes, I get all of that, but I had assumed that Mister microwave enthusiast adminwould want some of the affiliate cash for themselves, no?

not sure - from my understanding a lot if not most forums are loss making - the server/hosting costs are more than they receive from ads/affilate/donations - so providing them with a free hosted forum should be reasonably attractive, no?

Very few forums ever break even on their costs.

They may cover hard costs such as hosting fees by donations and using services like Skimlinks to bring in some affiliate revenue, but they generally lack the volume and efficiency in their affiliate targeting to offset their costs.

When you then factor in needing to maintain servers, update software, react to security bulletins, and all of the things which burden those who run forums... you can see that it is appealing that someone might do this all for you for that thin slice of revenue.

The thing to bear in mind here is that on the long tail of forums, only the top few % make a profit. Everyone else loses. But... the volume of users and affiliates of the long tail summed together could make more than the top few forums.

The proposal to forums admins is that we'll provide the service for free in return for them becoming part of the network and their affiliate fees help cover the whole network.

With efficiencies in the software, the bar at which profitability is achieved should be lower.

I know I would've jumped at this when starting LFGSS, and I have spoken to other forum admins who are very interested. The only ones I expect not to get are automotive forums which are the most profitable forums out there and have no reason to give up their profits. For everyone else, the forum activity is just a direct means of offsetting costs with no risk or liability for the forum admins and no begging cup needed for the community.

They might, and if they do, they are free not to use microcosm.app.

The biggest bit of the puzzle that is missing there is how easy it is to add in the affliate link stuff to current forum software, and the range of affiliates available through it.

If it's hard to add the affiliatle links, Microco.sm is good.
If Microco.sm can use the cost savings from hosting mutiple forums on it's servers, again, its good.
If Microco.sm can get a wider range of affiliates, it's good (more cash from the same number of links)

Also, if Microco.sm makes it easy to setup forums that look better than other software, people will migrate towards it. If MrMicrowave dosn't move to the better service, maybe one of his users sets up a Microco.sm, and tells people on the old forum of the better place he's found...

Lots of ifs, but thats why it's a seed funding offer.

On LFGSS I analysed links within posts to determine two things that companies like embed.ly and Skimlinks do not:
1) What would you like embedded that isn't (things like Garmin maps, bikely, etc)?
2) What links go to online stores that have affiliates that could contribute to running costs?

We will be doing the same on Microcosm. Instead of building a generic embedding service or affiliate skimming service, we'll target to the communities we host. Looking to both enhance content and increase user engagement as well as to increase revenue without affecting the user experience (without splashing banner adverts over the site).

The affiliate links can make a huge amount too though. Take a look at the MoneySavingExpert site for example. It's cash is mostly made from affiliate links as I understand it. They have them everywhere, in the articles, the forum (although for the forum, see http://www.moneysavingexpert.com/site/skimlinks )

As I understand it MSE mostly makes it's from the links in articles that it produces though, Microco.sm would be doing it by piggybacking on user generated content, and by the volume of that.

High volume, low cost. I think that given the mockups (and if my reading of them is correct) Microco.sm has a good chance of challenging in places that might not be expected. The gallery pages have potential for example, as I think they look better for sharing and getting feedback on photos than say Picassa or Flickr, and I'd be interested to see more of this sort of page too, buts thats a way out at the moment.

On a totally unrelated note, is it MicroCo.sm, microcosm.app or Microco.sm, or somthing totally diffrent?

This is all true. But as I said I will not be aiming at the top of the long tail.

The original quote on that:
http://www.wired.com/wired/archive/12.10/tail.html

Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.

That's the aim.

The volume of users over thousands of forums is what matters, not the revenue from a single forum.

We have no expectations of getting the few biggest and most profitable forums and media sites. We're aiming at all of the hobby sites... the long tail, none of which cover their costs, and all of which would prefer not to have the technical pain that they have today.

Plus if we really make the user experience something special, we hope to help increase the size of their communities and the engagement of their users.

And for now, it's Microcosm.

There's a car club I used to be in who run vBulletin on a dedicated server, probably a decent fit for microcosm.app's second-biggest community. I'm not involved in it any more but if the offering's affordable they'd probably appreciate not needing a resident geek to keep a vBulletin site live!

Funds still 'pending' 18 hours after transfer (from Barclays)

Automotive forums are actually the most profitable forums in the world.

They make all their revenue from eBay affiliate links with only 1 or 2 car sales per month making a profit.

Low number of concurrent active users, plus high value items being sold via affiliates is a recipe for profit.

I do not expect to get any established automotive forum.

WVM - Ditto from HSBC, I've prodded at HSBC, who have confirmed that they were sent to the correct account, with the correct reference, and have raised a support call with Seedrs after waiting 12 hours (based on my initial move taking about an hour) but haven't heard anything yet...

I'm not to worried, as long as it's all in place by the time Microcosm hits the site.

--Edit--

I've just had a response from them (as I typed that). Deposits clear once a day, so it should be there by tomorrow morning. If it's not, contact them. Good stuff.

True. I recently joined many car forums. Hard selling places. Selling and buying is their main thing

:(

Still 'pending' after 6 hours. Maybe signing in as Warren Buffet didn't help. But I'm having my hair done tomorrow, and choosing a handbag, so no odds.

Still waiting too for Seedr to credit the funds to my account - nearly 24 hours after sending. Not really good enough! Ticket placed but I'm not really expecting an answer today.

Is it possible they only process them once per day? I had a transfer (HSBC) processed within an hour last night, and it was the same time as some of the others upthread said they got credited too. I subsequently made another transfer an hour later and I'm still waiting for that one...

As per my post, yes, they process them once a day.

David - as you seem to know some of the Seedrs chaps, is it worth pointing them at this thread once the funding has been done, or pass some of the feedback from here to them? I was certainly going to tell them that it's a bit disconcerting to see one transaction go through fairly fast, and then another not go through for nearly 24 hours, and there's nothing in their FAQ's about that.

From Seedrs:

We have a handful of your investors who are waiting on us to run KYC checks because they didn’t pass the automatic system. Unfortunately, Experian’s database (which is what we use to run the checks) has gone down, and we don’t know when it’s going to come back up. I should have more information in the morning

So basically... some of you are stuck, they're frustrated too, and we'll get news in the morning.

We've agreed not to launch whilst people are clearly stuck as a result of Experian being down.