by Sheridan Tatsuno, Dreamscape Global, San Francisco, CA
How do you launch a successful global media company? Where are the opportunities, challenges and pitfalls?
As a screenwriter and a Silicon Valley tech strategist and serial entrepreneur co-launching my 8th and 9th startups, I believe we’re at the cusp of a revolution in digital media and entertainment – Hollywood 2.0 – which will overturn existing industries as digital news and music have done in the past.
With the explosion of mobile media, crowdfunding and digital currencies, “blue ocean” opportunities are limitless around the world. Like Internet 1.0, entrepreneurs are likely to be the leaders in creating new business models and industries. But the mobile cloud boom will be much, much bigger. There were only 100 million PC users when the Internet went commercial in 1994; now there are 6+ billion mobile users worldwide.
HOT MARKET OPPORTUNITIES
Where are these opportunities and how can you capitalize on them? The fastest-growing media opportunities today lie in mobile video and gaming, community clouds, personalized e-commerce, and Asia. Mobile video is forecast to reach $2.5 billion in 2016, up sharply from $1 billion in 2013, with Asia becoming the largest market. (http://bit.ly/1vZAR8T).
Facebook and Pinterest are expanding their mobile video capabilities so look for ways to integrate mobile advertising with them, especially Pinterest, which is product-driven. Flash sales and auctions on Instagram, Snapchat and other mobile platforms are potential new markets.
The entertainment gaming market is saturated so some gamers are shifting to business, education, nonprofits, and government since these organizations need to attract and retain Millennials who prefer enjoyable ways to collaborate real time via mobile devices. Bunchball and Badgeville are leaders in gamifying marketing and sales. In Sweden, my friend developed a mobile game where hospital employees reduced energy costs by 30%.
Corporate training is ripe for reinvention since it is a $50 billion market that is broken and ineffective. My startup, TruNorth Global, is focused on this space. Within a few years, most companies will recruit, train, motivate and collaborate using a variety of real-time mobile training and Big Data tools and systems. The early applications will be sales and marketing, legal and financial compliance, financial trading, HR training, and other areas where competition, regulations and costs are critical factors.
Public education is being reinvented by Khan Academy, Coursera and other e-learning startups, but they still use traditional video lecture approaches. New startups are creating interactive training that involves challenges, contests, and other gaming approaches.
English language training is popular, but multilingual platforms will be key for selling to Asia, Europe and cities with diverse populations.
Cisco has found that community clouds among universities are becoming popular ways to reduce costs and share resources.
EMERGING BUSINESS MODELS
The era of “build it and they will come” is over. Today, discovery is the biggest challenge facing all gaming, video and fashion companies since app stores and the Internet are saturated with competitors. How does one build a strong fan base and community?
Creating compelling videos on YouTube and Tumblr to a loyal fan base has moved beyond periodic ads to news channels. Crowdfunding using social media is a way to test the viability of new products, but tends to favor hardware products and media celebrities. If you don’t have a celebrity, how do you attract attention and build traffic?
Today, you need to build an interactive and iterative process where you are constantly in touch with your customers and fans, from sample content and MVPs (Minimum Viable Products), through crowdfunding, full production, marketing and distribution. Ask customers what they want and how they want it and offer contests and challenges.
For early startups, building on AWS, IBM, and other cloud services is cheaper and faster. There are dozens of CRM (customer relationship management) and social marketing services that you can use to engage and track your fan base. See these vendor sites for Use Cases on how their media customers are using their services and study their success stories. Many platforms offer startup services and incubators so shop around for the best deal.
Once you build a core audience, post your startup on AngelList.org and local angel groups. Look for accelerators in your area that can connect you with investors.
Silicon Valley investors and media giants are currently seeking to invest in and acquire media platforms with market traction, so think through your value proposition to them and your “exit strategy” since investors seek a return within 5 to 7 years.
In San Francisco, my partners have launched RFS 9 Hollywood 2.0, an informal group to invite developers who can build media startups, which can be pitched to our network of a few thousand Silicon Valley angel investors, so tell your developer friends: https://www.facebook.com/groups/296515880538125/
STEPS YOU CAN TAKE NOW
Most media creators I meet are “starving artists” because they only focus on creative production and forget the business side. It’s called “showbiz” for a reason, so focus on finding a savvy business partner. George Lucas was able to build Star Wars into a sustainable global franchise because he mastered the business aspects of the film industry.
Here are some immediate steps to take:
- Learn as much as possible about business (finance, accounting, marketing, sales, distribution, partnering, negotiations, etc.) through online sources, e-learning, books, classes, workshops, events, business clubs, and friends. Your business experience should be a lifelong process since markets are constantly changing.
- Study and interview successful gamers and filmmakers to learn how they succeeded, especially in the critical first years. Post your learning and discuss them with your team, fans and partners to find ideas that are applicable to your business.
- Establish your own media club on Facebook, Linkedin, Twitter and/or other social media services in order to build your community of partners, fans and volunteers and share games and videos online, not just promote your company site. Media is a collaborative effort so you need to build a loyal fan base like Star Wars or Minecraft by starting small and building over time. In 2010, I launched Silicon Valley Global Network to connect entrepreneurs around the world; it now has 28,000 members and is growing organically. SVGN has opened many doors to new business ideas, partners, and opportunities. Building it has only taken a few minutes a day; it could be monetized as an entrepreneurship channel. https://www.facebook.com/groups/109971182359978/
- Find a seasoned business partner who can manage these issues full time, so you can spend most of your time creating. The best referrals will come from friends and people in media companies, business clubs, incubators, and alumni groups
- Work with local business groups, chambers of commerce, universities, tech hubs to build a critical mass. In the mid-1980s, I volunteered with SIPA.org to introduce Silicon Valley chipmakers to Bangalore, which had the ambitious goal of becoming “the Silicon Valley of Software.” I thought it would take 20 years, but they shocked us all by taking off in 10 years. So aim high, start small, collaborate and work hard!
In Silicon Valley, we’ve learned that nobody can predict the future, so we focus on building software and hardware products, moving fast, learning from mistakes and failures, and constantly iterating. There’s no easy way to the top, but as former Apple and Disney designer Alan Kay said: “The best way to predict the future is to invent it.” So invent your own future with your business partners and fans! Then you’ll have something valuable to share with the world.
Silicon Valley Global Network: https://www.facebook.com/groups/109971182359978/