- Investment sought:
- Equity offered:
Discussion boards. Like tumblr, for forums.
Microcosm would be about serving users neglected by social networks and the stagnation of existing discussion board software. Online communities face a variety of issues today and we want to make it our business to address these.
Those issues, in our opinion, include the technical barriers with server set-up, software installation and maintenance, the cost barrier for site owners, the complex interfaces for end users, the barriers to mobile discussion or just embracing other forms of communication as not everything is 'a post in a thread'. Microcosm would be a PaaS (Platform as a Service) solution for discussion forums and online communities. With user engagement being the heart of the differentiator.
At the moment users of forums have to go elsewhere to get stuff done. For example, if a user wants to create an event, we think either they have to fit this into the discussion forum "everything is a thread" concept, thereby losing all ability to discover and manage events, or they would use Facebook Events, Meetup.com or other alternatives, which we feel thereby fractures the strength of the community and leaves data strewn across the internet in unmanageable silos of differing permissions and privacy levels.
Our view is that communities have been weakened by functionality being monetised by a collection of third parties and that this hurts the users of communities as well as removing any financial stability for the community. By bringing back into the community all things of value, we hope to increase the use of forums, make forums available for a wider number of communities and smaller communities, whilst dramatically increasing the engagement level of users in existing communities.
We believe that by focusing on the end user we would be able to remove all of the problematic and painful aspects of community communication, and greatly increase the value of a community to the users. By making events, classifieds, reviews, Q&A, polls, articles, and galleries all first class items within discussion forums we hope to create a product in which all hobbies and pastimes have a space, and that SMEs can use for collaboration.
Substantial accomplishments to date
We are already involved in one of the largest cycling forums in the world and have direct contact with users and administrators of this and other forums. With that as a basis we have performed competitor analysis, drafted and refined our initial concepts and design, and engaged in market research and user feedback.
Competitor analysis has been in the form of researching competitor software and hosted services. Work on the database for Microcosm has so far focused on encapsulating the new features of Microcosm (for example, the storage of events within a forum) whilst also ensuring that the design of the PostgreSQL schema accommodates data from other forum software to be imported to Microcosm.
We wanted to determine how we could deliver the ideas we have, to find as natural a way as possible to blend the new types of data into what is clearly a discussion board web site.
The comments and posts within a forum, we feel, encapsulate buyer intent, transactions and other revenue streams. That is to say, the revenue would be in the content:
Buyer intent in discussion = affiliate links
Classifieds = per-listing fee
Merchandise = % of sale for facilitating sale
Events = % of ticket price
Articles and reviews = affiliate links and banner advertising.
Our experience has shown us that we may be able to achieve a minimum of £4 per user per year for each active user on a forum using affiliate fees alone. We define an Active user as registered and logged in within the last month. Our experience also shows us that the average lifetime of an active user is 4 and a half years.
We believe this means that a poorly-optimised forum today should be able to earn £18 per user. It would be our business to offer a compelling product such that the lifetime is extended, and that by dis-intermediating Facebook, eBay, Craigslist, etc we would be able to raise the revenue per active user.
This is, in effect, a volume based business that we consider requires low running costs and high user engagement to produce profit. Our aim is to offer such a compelling offering that we can get to £10 per user per year and 6 years of lifetime per user.
Use of proceeds
The investment would be used to cover some of the core costs during product development as well as:
1) Additional UX (user experience) effort
2) Test devices and test software
3) Cloud services such as AWS (Amazon Web Services) for hosting
4) Legal advice with regards to user generated content, privacy policies and user agreements.
We plan to use the proceeds sparingly so that we are able to stretch a 12-18 month runway from this funding and to launch an initial version of the product with which we hope to build revenue to support the business.
At the broadest level, the Target Market is anyone with a hobby or pastime who discusses that or researches it on the internet. Our experience and research leads us to believe that discussion boards have been most successful at reaching this market, but that to date we consider it has been poorly managed and that existing offerings have stagnated and under-performed since the rise of the social network.
Characteristics of target market
83% of people in North America have used the internet to research a hobby or pastime
20% of North Americans use forums
791m internet connected people in Europe (518m) and North America (273m)
TAM (Total Addressable Market) is 83% of 791m = 656 million people
SAM (Serviceable Available Market) is 20% of 791m = 158 million people
SOM (Serviceable Obtainable Market) is estimated to be 20% of SAM in the first 5 years = 20% of 158M = 32 million people
One of the founders already owns one of the largest cycling communities in the world. We believe the deep relationship with what is now one of the largest hobbies and pastimes in the UK provides us with a great springboard to launch the product.
We plan to first migrate our existing forums to Microcosm, and then establish similar sites by offering the service to other cycling communities elsewhere in the UK as well as to cycle related charities and organisations (such as local cycling clubs).
After this we plan to overflow from cycling into complimentary sports such as triathlon and general fitness. At this point we plan to observe uptake and adapt the strategy to follow emerging trends and hobbies that use the platform.
We believe that the initial launch strategy would get us to tens of sites covering 50k registered users and 300k monthly unique visitors within 6 months. We additionally hope to reach out to existing communities to offer to import their forums from end of life platforms such as the large number of vBulletin 3.x sites that did not upgrade to vBulletin 4 as a result of what we perceive to be a change in vision of the vBulletin products.
Our existing competitors are a mix of hosted offerings such as Reddit, Google Groups, and Yahoo Groups and self-hosted software such as vBulletin, phpBB, Vanilla Forums, and Invision Power Board. The self-hosted software was part of our analysis to determine whether we could use that as a starting point before we concluded that it would require a fundamental re-write of their software. This, we feel, gives us a substantial first-mover advantage in the space of mixed-content forums.
We believe we would also continue to outpace competitors who rely on banner advertising or third party affiliates for their revenue. We consider an important aspect of the revenue model is that it has to be baked in from day one. We believe that SkimLinks and ForumRunner both lead to a significant degradation in the service offering to the end users either through slowing the web pages or limiting functionality and additionally through privacy invasion.
The hosted offerings, we feel are either under-resourced (Reddit) or neglected (Google Groups and Yahoo Groups). We believe that these would not be able to react to disruption before we are able to achieve traction and momentum.
Long-term we plan to keep our offering very closely aligned to the goals of the user and to stay in touch with the needs of the user. We specifically mean that making our revenue model dependent on successfully engaging users in their hobby and pastime means that we would work for our users and not for other entities. This strategy would allow us to stay close to the users needs such that as their needs evolve we plan to modify our offering to follow those trends.