There are many things that I can be very thankful for during this Thanksgiving holiday (as do you) but there’s one thing that I’m very thankful for right now and it’s the fact that I’m not facing down a $20,000 monthly data bill for our network.
At least… for right now.
It’s sad to see other startups grow and then fail to meet their profit targets and ultimately have to make the tough decisions to shut down or at least dismantle and become a “shell” of what they used to be. Turntable FM just recently made that critical decision after 2 years of growth with a significant pivot that has them saving a boat-load of money:
It was a tough decision to make because we love this community so much, but the cost of running a music service has been too expensive and we can’t outpace it with our efforts to monetize it and cut costs.
This figure, as TechCrunch was able to retrieve, was to the tune of $20k per month and by turning off the uploading capability they were able to save themselves an incredible amount of money.
Naturally, they had their eyes fixed on a less cost-intensive solution and I wish them the very best – but the reality of running a social networking-based startup is real. I know this reality very intimately and it’s something that I’ve been monitoring like a drug addict since the very beginning. It’s the reason I started raising venture capital and the reason I’ve spent so much time on the business end of things (which is incredibly exhausting).
Pressgram isn’t at the point of $20k per month but the costs of keeping the network up is growing at a pace which causes a bit of heartburn: 20-30% month-over-month. Without capital and without a direct source of monetization the decision becomes clear and very logical, one that’s as objective as they come.
I do not know everything that Billy Chasen (Founder) went through when he discussed with his team about TurnTable’s decision to pivot but I know what the feeling is like and the growing anxiety that data costs bring. The tough questions are unavoidable so it’s best to deal with them sooner rather than later.
And heck, I’d much rather start saving that money now than later, right? Again, I have much to be thankful for this Thanksgiving Day. Cheers!