Masterclass - the business of blogging

Last week, we had the first 'live' session at our 'managing tech startups' class. We had Julio Alonso talk about bootstrapping, the attention economy and the importance of analytics in the attention economy.

JULIO ALONSO and WEBLOGS SL

A brief bio. Long story short, in 2005, Julio left a successful consulting career to start Weblogs SL, a privately owned co. running 40+ vertical blogs in Spain and Brazil. He's doing quite OK, and for the last two years, he's been featured in El Mundo's list of the 25 most influential people on the internet in Spain.

SO WHAT'S SPECIAL ABOUT IT: BOOTSTRAPPING

Personally, the most interesting bit about his story is the part about bootstrapping and making it a self-financing venture. Partly, it was an attempt to avoid the excesses of the crazy internet bubble that burst not so long ago. Partly, it was a goal to remain EBITDA positive, every single year, even if it came at the cost of slower growth. But I think the biggest factor was this idea of being in it for the long haul, not just to make a quick buck (which is what VCs want). This takes a lot of guts, and self belief.

THRIVING IN THE ATTENTION ECONOMY : STICKING TO THEIR ROOTS

Weblogs is sustained by advertising revenue. And advertisers pay for ads shown to readers when the content of the blog is relevant to the ad. So the more the content, and the more the readers, the more the revenue. Simple enough?

Maybe not that simple. A key asset and differentiator for Weblogs is their regular and knowledgeable reader-base. You can't mess around with these people by taking them for granted and bombarding them with ads, or even worse, ads irrelevant to what they're reading. The balance between commercializing the content and retaining the reader's attention is a fine one.

Weblogs' policy has been to stay true to their roots, prioritize content over ads, and where possible, enmesh the content and the ads together. Julio talked about a pretty interesting idea 'content going into advertisements', as opposed to 'advertisement going into content', which is the norm. They did this by embedding their (pre-existing content) recipes into an ad campaign they conceptualized for a food chain.

Their superior (i.e. more relevant) content is what'll ultimately keep them safe from the new threat posed by content-farms. Moreover, this is where Weblogs' bootstrapping comes into the picture in a business sense: they are free from any investor pressure to maximize revenue by plastering ads all over the place, or to increase page-views by directing the creative bloggers to "follow" a trend.

ANALYTICS:

One thing Weblogs could do better is to capitalize on their prime asset, their loyal reader-base. With their drilled-down analytics, they can charge advertisers a premium fee for ads shown to their loyal readers, as against a standard fee for ads shown to the one-time users.