Some people will think this post is in poor taste. However, it’s worth looking at both successful startups and those that have questionable results. Most people learn by mistakes and success teaches nothing to the victor.
If you haven’t heard of Minti.com before, you’re not alone. According to quantcast, their website only receives about 60K visitors / month…of course we all know that quantcast gets it wrong as do most third party audience measurement services so let’s say they get a quarter million visitors per month. Not bad but, well, how does that translate into success? Not very well.
Here’s a breakdown of their costs:
- Office space – $600 / month (being generous and assuming they’re cheap.
- Staff – per LinkedIn, they have 3 people on staff. Assume they’re cheap and only pay employees $5K each, which makes for $7K approx in fully loaded costs for the employee.
- Given that this a venture backed startups, salaries are north of $200K on average for founder / co-founders…this makes for at least $33K per month for the two co-founders. Assume they are being underpaid by about 50% and it’s still $18K per month in base costs.
- Servers and infrastructure – given their traffic, they can probably get away with 3 servers, monitoring, etc, for less than $500 / month.
- Total capex per month = $26K per month.
How does that compare with 250,000 visitors per month? Well, if every single visitor generated ten cents in revenue, they’d be at break even. From an analysis on Google Search, they earn an average of 9 cents every time a search is done on their website….funny thing is, Minti.com is running Adsense. Google pays (per their recent transparency with publishers) on average, 68% to the publisher and keeps the remainder for themselves.
Thus, the maximum earnings per month for Minti at present time is 6 cents per visitor, or rather, $15,300 per month. As a result, they are going in the whole about $10K per month at least. They did raise about $2,000,000 in funding a few years back so they have plenty of ramp to burn but you have to wonder: are niche social networks still a viable business?
To us, the answer is clear: unless you’re doing something to improve product, user experience and marketing consistantly….it’s a losing battle. Selling “I need hits” in the footer on the home page of a parent oriented advice site isn’t one of those smart marketing strategies.