I'm sure MailChimp, ConstantContact, Campaign Monitor, MadMimi, AWeber, etc mention some of their clients on their home pages. Email is big business still, with much higher conversion rates and LTV than web traffic.
The Las Vegas Downtown startup thing looks really interesting. $960k in NV should go 2-3x as far as in Silicon Valley, as long as the founders want to go there. Tony Hsieh, Zappos, and founders having existing relationships with Silicon Valley help a lot, I think.
I don't think this would make sense for developer tools or anything where you needed very frequent in-person meetings with Bay Area companies, but for a consumer or small business product, potentially a good idea.
Housing is probably 1/3 or 1/4 the cost (or less), so I guess it depends on whether you can compromise heavily on housing while doing a startup vs. other things. Certainly iPads and Macbooks cost the same in both places. Income taxes maybe not so relevant.
Income taxes can be relevant, Microsoft licensing isn't in Reno for nothing, Apple and every other large company tends to pass billions of dollars of revenue through Nevada due to the lack of corporate income tax. Nevada also still has no personal income tax. Home prices are definitely lower but it's only about 1/2 for most desirable areas not 1/4.
Equipment costs are going to be the same of course but access to other services (bandwidth comes to mind) will be much more limited and in many cases much more expensive. There also won't be a huge savings on corporate office space in places like downtown Las Vegas or even downtown Reno.
Companies starting in Nevada will get a bit of a benefit due to the looser requirements on employee benefits and companies can get away with offering crappier benefits due to a lack of job availability in the area. The flip side of that coin is that there isn't a ton of top notch talent in the area. The top notch talent is making a salary on par with SV or at most 10-15% less. Top talent is constantly leaving the area for SV rather than moving to the area. Most of the companies that I know are actively recruiting recruit out of Oregon and the midwest. Getting people to relocate from California to Nevada, especially the Bay Area to Las Vegas is going to be a real challenge. Vegas doesn't have a lot going on for it.
Is there a need for legit email newsletter advertising? Yes. Is it ever going to happen with a CPC model on a large scale? No.
It seems like LaunchBit is trying to do two things: 1) Launch a new affiliate network and 2) Advertise spammy products via email (one of their default advertisers is a teeth whitening product).
It just doesn't seem like either of those things have a very bright future.
As to point #2, Launchbit allows publishers to select which ads they want shown in their newsletter - something you can't really do with any other ad network. Don't think teeth-whitening products are a good fit for your audience? Don't run those ads.
That's fair. I should have written ad network, not affiliate network.
Don't think teeth-whitening products are a good fit for your audience? Don't run those ads.
It's not that those ads wouldn't be appropriate for my audience, but that they are not appropriate in email marketing at all. I'm pretty sure that any list that runs that ad will get marked as spam. Then, any other email that contains any links similar to that spam email will also get marked as spam. At a very small scale, one could probably get away with it for a little bit, but I don't think it will work on a large scale.
My reasons relate specifically to email marketing. Off the top of my head:
1) It's difficult, if not impossible, to combat click-fraud. There is no javascript running on the client-side to help, and there is no verification that the ad that was displayed wasn't something like "click me to unsubscribe"
2) Ad content in email is scrutinized more heavily and blacklisted more liberally than any web-based content. It would seem that one mistake would sink the entire ad network and any newsletter that uses the network.
I'm inclined to give this a shot. My business targets non-tech-savvy SMBs and marketing to them in a scalable way is tricky. Since it's CPC there's no risk, I'll report back in a week with some data
There's tons of risk. Did you know a TON of email servers and spam blockers click all the links in emails and analyze what is linked as well? How do you know you won't be charged for those?
As one of the co-founders, I can tell you that click fraud and bots are certainly issues with many ad networks. This is something we think about a lot. We try to pre-empt this by writing algorithms to not count clicks of known-bots. But, people are always coming up with new bots, so it's impossible to apriori block every bot. So, we are constantly retro-actively checking clicks to make sure they are legit. For example, if a publisher yields more clicks on a given campaign than we predict, we'll retroactively take a look through a series of methodical checks and in many cases will do a series of manual checks. And if we find a bot or a ring of folks trying fishy things, we'll retro-actively rectify the situation, so the advertiser doesn't pay for those clicks.
I'm one of the co-founders of LaunchBit. @jhuckestein, feel free to ping me if you have specific qs about the campaign you're thinking of running. If we're not able to reach the demographic that you want to reach, I will definitely tell you. Obviously, we want to make sure that our advertisers are successful, because it's easier for us to retain customers than to get new ones. So we've turned away advertisers before if we don't think we're a good fit. elizabeth [at] launchbit
21 comments
[ 2.3 ms ] story [ 79.8 ms ] threadHacker Newsletter
Javascript Weekly
HTML5 Weekly
Betalist
Startup Weekly
I don't think this would make sense for developer tools or anything where you needed very frequent in-person meetings with Bay Area companies, but for a consumer or small business product, potentially a good idea.
1/2?
Equipment costs are going to be the same of course but access to other services (bandwidth comes to mind) will be much more limited and in many cases much more expensive. There also won't be a huge savings on corporate office space in places like downtown Las Vegas or even downtown Reno.
Companies starting in Nevada will get a bit of a benefit due to the looser requirements on employee benefits and companies can get away with offering crappier benefits due to a lack of job availability in the area. The flip side of that coin is that there isn't a ton of top notch talent in the area. The top notch talent is making a salary on par with SV or at most 10-15% less. Top talent is constantly leaving the area for SV rather than moving to the area. Most of the companies that I know are actively recruiting recruit out of Oregon and the midwest. Getting people to relocate from California to Nevada, especially the Bay Area to Las Vegas is going to be a real challenge. Vegas doesn't have a lot going on for it.
It seems like LaunchBit is trying to do two things: 1) Launch a new affiliate network and 2) Advertise spammy products via email (one of their default advertisers is a teeth whitening product).
It just doesn't seem like either of those things have a very bright future.
As to point #2, Launchbit allows publishers to select which ads they want shown in their newsletter - something you can't really do with any other ad network. Don't think teeth-whitening products are a good fit for your audience? Don't run those ads.
That's fair. I should have written ad network, not affiliate network.
Don't think teeth-whitening products are a good fit for your audience? Don't run those ads.
It's not that those ads wouldn't be appropriate for my audience, but that they are not appropriate in email marketing at all. I'm pretty sure that any list that runs that ad will get marked as spam. Then, any other email that contains any links similar to that spam email will also get marked as spam. At a very small scale, one could probably get away with it for a little bit, but I don't think it will work on a large scale.
1) It's difficult, if not impossible, to combat click-fraud. There is no javascript running on the client-side to help, and there is no verification that the ad that was displayed wasn't something like "click me to unsubscribe"
2) Ad content in email is scrutinized more heavily and blacklisted more liberally than any web-based content. It would seem that one mistake would sink the entire ad network and any newsletter that uses the network.