Bright Things Share Discussion Threads

[the analyst] 03/4/2010 01:30

Recently, there was a massive increase in free networks registered, which I thought looked to be great news, real sign of marketing progress. But, it seems it was due to the pharmacy (viagra etc) guys developing what looked to be thousands of networks in a short space of time :(

That sort of spam would screw up any conversion rate metrics we follow - the effect would be to increase overall sign-up numbers (looks good, but not real), but for the conversion rate to premium to drop massively (looks bad, but not real). Hence, the conversion rate may well be a flawed metric to follow

So, the most useful metric (imo) is the net increase in premium networks per month. That, combined with the average revenue per network are the crucial KPIs

The only figure that we have at this stage is that "over 1000" premium networks were up and running at the end of October 2009. Let's call it 1050, for arguments sake. This means that in the 7 months since the first full month of operation (March 2009) they added a net of 150 premium networks per month

So, 5 months on we may have added another 750 networks, if we have maintained that rate. the only potential caveat to that, is that we don't know how much the zocku figures skewed those early numbers. Once zocku was no longer taking on any more sign-ups, did our overall sign-up rate slow down?

If we have maintained that net 150pm rate, though, we should now have 1800 premium networks. At a rate of $50 per month per network, that would mean a current revenue rate of £720k pa. Not bad, but my guess is that we will probably need close to £3m pa to reach break-even (given they are likely to spend more marketing the product in future)

If that £3m break-even figure is close to the mark, it means we need around 6000 more premium networks before we hit a profit. At a net rate of 150 networks added per month, we would reach that target in 40 months time. Not ideal...

So, we really need to be working towards a rate of 600 premium network additions per month, to reach that target a lot quicker. It sounds a lot, but in reality it's only 20 per day and I don't think that's a tough target if they have a great product

Next results in Sept and Dec will be interesting, that's for sure, but it's the ones in September 2011 (for the period Oct 1st 2010 - March 31st 2010) that are going to really tell us if we are on the right track - those will be the first results that show take-up of V2

Hopefully, we get regular updates on progress along the way, 'cos waiting until Sept 2011 is going to take some patience, lol !

[carl79] 01/4/2010 11:17

It may not be until oct-dec before we get visibility of meaningful data but it would be good to get an indication that things are heading in the right direction with an update of some description...

[norbus] 01/4/2010 09:32

Cool

Still waters run deep. Trouble at Ning gives bgt an opening ? We missed the trading update, but we know there is a lot going on. New product + marketing angle for USA. Confidence from the CEO. PR activity.

May be BGT new concept, so different from Ning, that it gives them a best No2 chance; No2 usually make the money.

I expect a pleasant surprise by June/July, as I can't visualise honest serious experienced people to have wasted the time and clear opportunity. I hope I am not doing the wishful thinking bit, but reading the tealeaves right.

[the analyst] 01/4/2010 09:17

I fired off an email yesterday and heard back first thing this morning - as we expected, the 10,000 is a bizarre guess on the part of the journalist

[norbus] 01/4/2010 08:19

why not fire an e-mail and ask Dom about the 10000?

[carl79] 01/4/2010 01:08

If Dom was talking about 10k premium networks I think the market would have been told in an update before he started doing press releases...but maybe that number is so small fry for Dom that he doesn't see it as news worthy! :-) Maybe his focus is 50k premium and nothing less is worth beating the drum for?! lol

If they do have 10k premium, one thing is for sure, the share price should be multiples of the current level!

As much as i'd love that though, I cant see it just now, and I think your right about the premium number being around 1500 TA, perhaps 2k - happy to be surprised on further upside...

It is intriguing though TA - why mention 100k when they have nearer 140k - thats an undersell of 40%. If its out of context fair enough, but what context was it in then? ONLY 10k multi site networks would probably be enough to make me sell my shares as it would indicate negative progression (ratio of multi site to total populous when compared to numbers last March)....so, i still have no idea what to believe / think...

[the analyst] 31/3/2010 22:59

My guess is that we have around 1500 premium networks. The main reason for that is I've seen no increase in usage of the socialgo forums, or their getsatisfaction boards.

Of course, I'm more than happy to be wrong on that :)

[uncle_bob] 31/3/2010 22:32

The context of that interview suggests that the 10000 networks referred to are subcription based. At $25 a month, they should be pulling in at least $3 mill a year.

If demand is picking up they might be struggling to keep up and will need to spend money on putting in a professional support infrastructure.

[the analyst] 31/3/2010 22:14

It is intriguing, isn't it?

Got the same thoughts as you, I think it's a typo and should say 100k, or possibly a figure that has been re-quoted out of context

But, wouldn't it be nice if.....

[carl79] 31/3/2010 20:36

Hi TA,

Good spot. You pulled out the awareness piece - this has been my exact point for a while...I agree that they will always need to improve and innovate but I am now very much about results and we won't see them until SG get a decisive uplift in the premium network uptake - they will need to nail their marketing to do this and so it is this more than further product innovation that I wait with baited breath for....

Regards 10k networks...hmm, I dont know. Given the context of the conversation, its a low ball number to throw out there - why say Ning have 2M networks and within that number include "empty nests" and in the next breath only provide SG "busy" networks...not a like for like comparison and does not make us look good (not that 100k is much better if you are looking for a headline grabbing number!)

I have two alternatives...

1/ Dom said 100k and the guy incorrectly worded the post - ie left off a nought.

2/ They ARE referring to premium ... I know, I know, a very very long shot but we only know that the latest update said "over 1,000 premium customers" That could have been anything...and lets not forget the unsubstantiated comments from people we trusted saying they had multiple 1,000s ... As you have said, SG may have been protecting what they had from prying competitor eyes whilst they bolstered the platform...

Don't get me wrong, im not about to go and buy a heap more shares but just stating that we should not completely rule out the possibility that they have knocked the ball out the park as far as our expectations are concerned....

The other option is that they refer to multiple site networks but since he says "coming up to 10,000", this would ring alarm bells, nay sirens, as far as im concerned! They had over 7k of these networks over 1yr ago!

In conclusion, I dont think Dom would have mentioned an obscure number that needed further understanding to comprehend - eg, 10k networks that have multiple users, or that have over X Gigabits of traffic per month etc etc...just not relevant when in the breath before he talks about straightforward sign ups on his main competitor's platform...

So for me, the 10,000 is
a mistake (and should have been 100k), or
does refer to premium networks, or
has been taken out of context (ie the author has not included the detail that explains exactly what that 10k is since we know it is not our total number of sites...)

If only 10k premium were true!

[the analyst] 31/3/2010 11:38

So what exactly is this 10,000 number Dominic is talking about?


"However, SocialGO has come very late to the game and is trying to enter a market which is nearing saturation. Market leader Ning already has 41m users and 2m user-built networks. While it is likely that a number of those networks are "empty nests", SocialGo, which has "coming up to 10,000 networks", lags far behind."


We can be sure it's not the premium numbers, so perhaps that is the number of 'active' networks, that are used on a daily basis, or with a certain number of members?

[the analyst] 31/3/2010 11:35

hahahaha!

"CEO Wheatley describes his company as "the West, where people are able to come and go as they please" while portraying sites such as Ning as "more Soviet" where all the content belongs to the state not the individual. It's an interesting analogy, and touches on a key issue as social network creation hits the mass market."

[the analyst] 31/3/2010 11:32

Interesting comment from the above interview

"What's the biggest challenge you currently face?

Simply awareness. We feel we're quite well set up from a technical standpoint and, though it's taken us the best part of three years to get here, we are making money and every month our income goes up so we have a nice steady graph. But awareness is what we need to draw in some bigger brands and increase our user numbers.
"

[the analyst] 31/3/2010 00:04

A few more opinions:

"Well, I'm gonna break the trend here and just go for it. I think SG is one of the best deals I have found! I have owned many websites in the past and one of them cost me $100 a month for three years and never went anywhere- mainly I think because the company and support was completely worthless. I finally had to let it go because I couldn't afford it anymore. That's $3,600.00 that went into a failed website. Live and learn. Anyway, so to me $25 a month sounds very good to get most of the content, not too mention all the really great tutorials, support and stuff. I looked online for at least a week to find a company like this, and most of them wanted a huge fee up front just to set you up (one was like $1,500.00, and I almost swallowed my tongue!) Anyway, I like what I have found here...... but that's just me. :)
Thursday 25th March 2010 12:21pm13

Snow C
9 Posts
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Dangling the carrot springs to mind, well that was it it all felt to me.

Snow
Thursday 25th March 2010 01:16pm14

doymarn
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I still stick by my earlier comments too.

If you take all the features that makes it a monetised customisable network then you are looking not at $25 per month... you are looking at $64.97 per month. Then you will still pay for the widgets and bandwidth overruns... it's just not competitive anymore, unless you are comparing it to a more feature rich platform like KickApps, but they lost me in regard to their tiny usage limits & scary escalations.

I really liked SocialGo but the pricing penalty to monetise it (without full VAT support), customise the layouts & the bandwidth overrun charges which others have moaned about, has made me look to other platforms for a more predictable future.

Seriously, why pay for these types of charges when you can now put something like a free BuddyPress network on an unlimited hosting plan (or one with a much larger bandwidth plan) for a fraction of the price and there are no financial penalties for customising or monetising the network?... beats me!"

[the analyst] 31/3/2010 00:01

Couple of comments about SG on their forum:

"At this point, I don't like the customer service or lack there of, so I would not commit to a 12 month deal with them until they get there act together.
Sunday 7th March 2010 11:31am6

Sue e
12 Posts
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I'm in agreement with Crumbz at this point. My site is experiencing a significant amount of downtime and the only thing that's keeping me sane is knowing I can pull the plug as soon as I'm ready to go elsewhere."

[the analyst] 30/3/2010 23:58

"Layout Manager update - place Homepage widgets on ANY page
By Michael A


Good news for all Premium network owners!

It is now possible to use home-page widgets in the Layout Manager on ANY page of your site.

These widgets include:
- Latest Activity
- Newest Groups
- Newest Members
- Member Birthdays
- Latest Magazine Articles
- Latest Forum Activity
and, our newest home-page widget...
- Latest Videos, which will let you show up to 16 of the newest videos on your site

So, if you create a new page in your Layout Manager, and have a look at the Standard widget list on the right, you should see more than just the usual RSS, Custom HTML and iFrame widgets:



Hope you enjoy the new widget freedom - the sky is the limit!

Regards,


SocialGO Support Team"

[the analyst] 30/3/2010 23:57

"New Video Encoders - Live on SocialGO!
By Michael A


Hey everyone!

We have just launched our new video encoder for SocialGO networks.

From now, you will see that your videos will encode much faster!

We are converting the videos using a new codec which means they will maintain a higher picture quality while keeping the file size as small as possible. In fact in many cases the encoded video will actually be smaller (if compared to our previous encoder's performance) which is great as it will mean you can upload more videos and make better use of your network's storage.

Here is a summary of the new encoder's capabilities:

- Improved compression meaning videos will load quicker.
- New encoding system which will mean more reliable encoding of uploaded videos.
- Support for more codecs
- Multiple simultaneous encoders. Average turn-around time of 3 minutes for videos to encode.
- Up to 250mb video uploads.

In the near future, we shall also be adding customizable encoding options - so watch this space!

Happy uploading...


SocialGO Support Team "

[the analyst] 30/3/2010 22:55

Pretty good press release, imo - really does explain quite nicely where SocialGO has positioned itself in the market and what you get for your money.

Emphasises the ownership of the data, which is important

[the analyst] 30/3/2010 22:48

30th March 2010

SocialGO Announces 'ProServices' - Turnkey Service for Social Network Creation and Marketing


Alternative to Custom Design and DIY Services Enables Marketers to Launch Populated, Market-ready Social Networks within Days for under $500
REDWOOD CITY, Calif., March 30 /PRNewswire/ -- SocialGO (www.socialgo.com), the first platform for creating and monetizing social networks tailored to the needs of businesses, organizations and entrepreneurs, today announced ProServices, an offering enabling time and cash-strapped marketing professionals and webmasters to launch and market populated, search engine optimized, customized social networks. Unlike DIY services, ProServices requires practically no work. After a few brief conversations, SocialGO ProServices will launch a market-ready site built to the customer's brand specifications within days for under $500 – a fraction of the cost associated with custom design.
"Until now marketers and webmasters tasked with creating proprietary social networks have been forced to choose between expensive custom design and time-consuming DIY services that compromise ownership and control," said Dominic Wheatley, CEO, SocialGO. "SocialGO ProServices meets the needs of this underserved group by providing the ease, control and ownership of custom design, but much more quickly and cost-effectively."
For $349.99 SocialGO's ProServices team will create a logo and customized professional-grade network, as well as set up member subscriptions (with Member Billing option) and Google advertising/analytics. The package includes $50-worth of widgets/themes. ProServices also provides services a la carte:
Google AdWords campaign
SEO
Populate network with existing member lists/databases
Custom logos/welcome page
Member billing setup
Tiered member access
Populate network with articles, newsfeeds, photos, videos, music
Split network into "free/premium" memberships
Customized access/security
Master network linking multiple SocialGO networks
Custom CSS code troubleshooting
Custom domain setup
Newsfeed setup
Access to third-party developers providing specialized support/services

SocialGO's networks empower its thousands of existing clients – including businesses, educational entities, non-profit groups and other organizations – to engage key audiences, sell products/services, fundraise and build brands.
About SocialGO
Founded in 2007, SocialGO provides a complete social networking platform enabling businesses, organizations and entrepreneurs to reap the benefits of social media. SocialGO's founders created an offering tailored to the needs of businesses and organizations for the monetization, ownership, control and customization of content and membership. SocialGO has headquarters in the UK and Silicon Valley to meet the demands of its global customer base. For more information, please visit www.socialgo.com.

[carl79] 29/3/2010 14:54

oh - ok. thx

[norbus] 29/3/2010 14:37

sorry O/T
Not unless they robbed a bank! and that's more likely than a little Poker outfit making money! If Purple Lounge had been doing any good, the shares would not languish, getting below placing price for the treasury shares the palmed off to some brainchallenged punters; Yeah. I am long in MDC shares!

[the analyst] 29/3/2010 14:32

sorry, O/T

Yeah, that's one of the companies where I believed them after talking to management - they told me they were launching a load of new websites (didn't happen), claimed they were profitable (they were not) and claimed they were developing their own games for mobile devices (they were not). The list goes on and on. Horrible...

Unlike most, that particular example is one where I feel I was lied to, rather than them being over-optimistic. Most directors are just a bit too rose-tinted in their hopes, rather than anything

Results will out on Wednesday over at MDC, so I guess they will update on Purple Lounge, their latest big thing - I see some of the posters over there are expecting £4m cash in bank at year end, seems a little bit optimistic to me...