Can startups with Hollywood celebrities draw in venture investors as easily as they can draw an audience? Not exactly. The celebrity can get a company so far. It’s the site’s raison d’etre that determines whether it’s one that can generate venture returns. And, if people are already accessing full Web pages on mobile phones, is it too risky for companies to build “bridging” technologies to get videos on mobile gadgets today? Those are questions we explore in this week’s Vator Box. In this episode, Tim Chang, venture partner at Norwest Venture Partners and last week’s VB guest host, joins Ezra Roizen (Vator Box regular) and I, as we look at WeMix.com and Transpera. The bottom line is both Ezra and Tim said that Transpera was more likely to generate venture returns over WeMix. Both also had some good insights and advice for WeMix, including a shared view that the company needed more “focus.”
We started with WeMix, a MySpace/YouTube for musicians site founded by Ludacris, a three-time Grammy Award rapper and actor, and Chaka Zulu, his manager. Just like Ibeatyou, a repository of competitions, and DanceJam, WeMix tries to mash up celebrity with the average Joe. On WeMix, you can feel close to Ludacris by having your own tunes next to his. If you’re good enough, you might make “Luda’s picks” – the rap artist’s equivalent to making Oprah’s book list. You can also win the chance to jam with Ludacris; On Ibeatyou, you can have your photos next to stars like Jessica Alba, and you can compete against her in staring, no blinking competitions; On DanceJam, you can feel close to co-founder MC Hammer, whose profile page is right on the homepage, waiting to greet you. (Note: Seems strange that Hammer’s profile has only been viewed 2,020 times as of this post.)
The use of celebrities is a good launch pad, both Tim and Ezra agree. “What they’re doing cleverly is using celebrities as an aspirational point,” he said. Tim added: “It does tap into that need for audience and aspiring creators to hook up with somebody like Ludacris for that shot at fame.”
The site definitely underscores the breaking down of the walls between audience and artist. It also underscores the movement to find talent across verticals. The challenge for WeMix, however, was whether it was a site focused purely as a sourcing tool for Ludacris to find new talent, or whether it was a lifestyle site. If it turns out to be the latter, Tim said he’d see it as a larger opportunity.
We then looked at Transpera, a company that allows publishers to distribute their video on mobile phones and earn advertising from a mobile audience. It was clear we all liked the company’s value proposition given the difficulties around delivering video to the phone, while at the same time the demand for mobile content is rising. Tim also gave CEO Frank Barbieri a thumbs up for attracting a solid management team.
We all agreed, however, that the challenge for Transpera is fighting against swiftly changing mobile technologies. You don’t want to waste precious resources building an interim mobile technology if next year anyone may be able to watch video straight from their mobile browser. Of course, Frank knows that. That’s why he’s building a mobile advertising network. To this end, if Transpera is using its short-term technology advantage to bridge to a long-term business defensibility, then it’s got a good model and plan.
(Note: We’re not experts. We’re here to start a dialogue and help others understand these businesses. We welcome your comments. And, if you would like us to discuss a startup, feel free to nominate them by commenting here.)
