Vinny Lingham’s Blog

There are two models for any online business, either the user pays or someone else does…

We conducted a survey at Web 2.0 expo earlier this month, and here are the findings:

* 78 percent of respondents believed the freemium model will weather the economic downturn, compared to 27 percent who put their faith in subscription-based models.
* 90 percent of respondents believe partnerships will be a driving factor for Web 2.0 innovation over the next year.
* 46 percent of respondents saw strategic partnerships as the fastest route to profitability; 42 percent believe its only subscription-based services, while only 39 percent believed it was advertising.
* Only 8 percent believed online auction sites will grow this year.
* 97 percent of respondents use Web 2.0 tools (Facebook, Twitter, LinkedIn, etc.) to establish an online persona.

The survey, promoted through Twitter, was conducted both online and at the Yola booth.

Most startups are evaluating their options right now. Ad revenue has dropped – not so much in aggregate spend, but more in aggregate price – some estimates are that CPM’s are down 80%? Anyone wonder why?

Contrary to the popular belief of most startup founders, advertisers are not interested in just buying advertising because they have money to spend and you have eyeballs. Google AdSense is not just a cash printing machine. Advertising needs to translate into real ROI for the advertisers or sooner or later they will abandon you. With consumer spending down (along with conversion rates), advertisers are getting smart and pulling advertising from sites that don’t convert, and increasing it on sites that do convert. This does not bode well for websites that cannot drive value for advertisers. What most people don’t realize is that Search is not like traditional advertising – you’re BUYING customers. There are too many business models out there that rely on advertisers to support the business, but do not drive positive ROI for the advertiser. These businesses are headed for rocky times (in fact, it’s already upon them!).

So, I’m not saying that you shouldn’t build great websites that people want to use – just be prepared to start charging for it if your traffic is not targeted or qualified for advertisers. Twitter is a great example – if they decide to monetize via advertising, they need to deliver customers to advertisers; if they can’t and the traffic doesn’t convert, then their business model will be to charge users for the service. Someone needs to pay to keep the lights on.

At the end of the day, the cost of inventory is the issue – the market prices will gravitate toward real value in order to improve the ROI’s for advertisers – but that really places your business model at the mercy of your advertisers and their budgets (and their ability to convert your users into customers). I’d rather be offering additional value added services that a small % of users would pay for on a regular basis, rather than try to monetize solely via advertising – and I’d advise other startups to start looking into that too…

The online advertising goldrush is over – time to start building real business that deliver real value…

So, today, SynthaSite is officially renamed to Yola and it’s been a pretty fantastic day for us – a lot of work has gone into this over many months and it was a tough decision to make. SynthaSite was really built into a solid and popular brand – supporting over 1.5m users and growing rapidly. We also raised $20m in financing last month – so we need to put that money to good use and build out a solid business!

This clearly begs the questions: “Why Yola?” and “Why now?”.

Why Yola?

In a world with so many different global brands and names – it’s actually very difficult to find a unique name, especially a short one. We went through a long process and decided on Yola. It’s short, easy to say and spell in most languages, reflects the culture of our organization, and will be able to grow with the plans we have for our business. We believe that it reflects the culture of our organization and we were able to secure the .com domain name – an important part of renaming any web company.

Why now?

Given the sizeable investment we’ve just received, we obviously have big plans for the company. The rename was always going to happen, the funding is just going to enable us to achieve those goals faster.

SynthaSite is a great name for our website building product, but we don’t believe the brand transfers very well to ancillary products that we may launch in the future. I’m not a big fan of having multiple brands in any fast growing market (it’s different in mature markets – multiple brands allow for more “shelf space”), so in order to consolidate our branding across our future products and services, we had to select a brand that could transfer brand equity from one product to another, in which case “SynthaSite” doesn’t work as well as “Yola”.

For example, in the future, we may role out a mobile product, and instead of calling it SynthaSite Mobile – we felt Yola Mobile would be a better name – shorter and to the point – the “site” part gets in the way, and “Syntha” is not really a standalone word or name (Synth A Site). SynthaSite is really a single product name and not a company/global brand name and therefore this presented a challenge, and many others like this, to us – which will all considered carefully in the process of our renaming.

The rename is really about looking forward into the future about what our company is about and where we need to and want to go – SynthaSite could serve us well as a single product brand, but it really didn’t fit with our long term product & business strategy. I’m sad to see it go, but excited with the prospects of what Yola will bring – I trust that you are too! Thanks for all the great feedback and support!

I’m at BarCamp Africa today – follow me for some live coverage on my Twitter feed!

We have a new job opening in our San Francisco office here at SynthaSite. We’re growing really fast (we have over 30 people in the company now) and we need a dynamic, multi-skilled individual to join a great team, based in SOMA, San Francisco (sorry, no Visa sponsorships possible). You must be US based and be eligible to work for a US employer.

Retention Marketing Manager

Company:

SynthaSite’s vision is to enable anyone, anywhere to publish their own website. We’re a venture-backed start-up who recently raised our series A funding, released a beta product into the market and are ready to take the world by storm. We’ve grown rapidly over the past 6 months and need superstars to take us to the next level.

Position:

We’re looking for a ridiculously talented Retention Marketing Manager to lead our email and website marketing efforts. In this role, you’ll be responsible for both setting the strategy and running the day-to-day execution of our email and website marketing programs. If you’re right for this job, you’ll have strong email and website marketing experience and be looking for a place where you can use those skills to build a new program from the ground up. You’ll want to make a difference. If this sounds like you, we’d love to meet you.

Location:

San Francisco, CA

Reporting:

The Retention Marketing Manager will report directly to the Vice President of Marketing.

Key responsibilities:

* Email Marketing: Define, plan and execute SynthaSite’s email marketing strategy
* Website Management: Own the SynthaSite website, optimizing it for customer retention and monetization as well as working with the Acquisition Marketing Manager to drive conversion of new visitors to the site
* SynthaSite Blog: Own the SynthaSite blog. Define the messaging and collect content that will speak to the needs of our customer base
* Creative Direction: Work closely with creative team to develop marketing materials for email newsletters and the website
* Planning: Work with the VP of Marketing on quarterly and annual plans

Qualifications:

* 3+ years of related experience with email marketing
* Experience managing a marketing budget and preparing plans and forecasts
* Experience working with Graphic Designers to produce high-performing creative assets
* Strong analytical and quantitative skills
* Entrepreneurial drive

Compensation:

SynthaSite is prepared to offer an attractive compensation package, including a competitive base salary, health and vacation benefits, and company shares.

SynthaSite is an Equal Opportunity employer. Personnel are chosen on the basis of ability without regard to race, color, religion, sex, national origin, disability, marital status, sexual orientation, or gender identity, in accordance with federal and state law.

I did a podcast at Web 2.0 with Brad over at Technology in the Arts. Jason Fried from 37Signals is also on the podcast. Have a listen here.