VasoolNews is an example of a startup with smart intent and an original business model. But VasoolNews threatens to remain a shadow of its true potential because of some serious shortcomings. This review examines what VasoolNews is, the opportunity, flaws, and suggestions for improvement.
What VasoolNews is
[Disclaimer: I was asked to review the startup by a friend of the founder]
VasoolNews is an India-specific content-aggregator service. Its stated intent is to “promote good stories”. Its user community votes for “good stories” (and against poor ones), which impacts the stories’ visibility on the website.
Publishers (folks who want their content to be shown on VN) have to i.) submit their content, ii.) put up VN’s ad widget on the story page. Ad revenue from that page is split between the publisher, the users who’ve promoted the story (by voting for it), and VN itself.
It’s a little more complicated than that. VN envisages a stock market for content. Users are allocated a fixed amount of virtual currency, from which they consume every time they vote for a story. The intent is for users to turn investors and vote for stories they think will garner the most views (and therefore the most potential ad revenue). The revenue potential of a story is the analog of the earnings potential of a company on the stock market. The stock market analogy is taken to the point where ad earnings are called “distributed dividends”.
The model sounds very good, even exciting in theory, but hides critical flaws:
Business Model Flaws
- Only websites that agree to put up VN’s ad widget have any chance of making it to the top content. Why would anyone vote for a piece of content that wasn’t going to earn him/her any money? That severely limits the breadth of VN’s content. [1]
- The “goodness” or even “interestingness” of a story need not be directly correlated with its earning potential. Some categories – travel, entertainment – have more earning potential that say, political news or comedy, especially with context-sensitive ads. The former are more likely to be actively promoted than the latter, even if the latter are more “good”. [2]
- No surprise then, that VN’s potential for success and scale pales in comparison to something like the enormously popular Digg, which is based on the same principle but keeps the model simple.
Lack of Clarity
Several other important questions remain unanswered:
- What is the team behind VN? If this involves money, I need to know whom I’m dealing with; how reliable they are.
- There is on clarity on the kinds of ads that will be displayed on my article, should I agree to put up the ad widget: are ads context-sensitve, image or text based, popups or popunders?
- No clarity again on how ad revenue will be accrued (whether per impression or per click), or on how it will be shared among publishers, voters and VN, or about how it will be disbursed.
Interface Ripoffs
For a team that came up with an interesting and original model (however flawed), their penchant for ripping off website designs is inexplicable and inexcusable:
1. Their sign-up page is straight from Google’s stables
2. As is their category listing and “more” menu
3. And the look of their Welcome, Settings and Logout links
4. And their Techmeme-esque use of the term “leaderboard”:
Other Problems
Confused categories: There is a “Sports News” sub-section under “News”, as well as a top-level “Sports” section. Does that mean the Sports section ought not to cover Sports News?
Out-of-date “News”: Among the top 3 article under “News” was one from the Hindu from January 2008, and one from the BBC from February 2008.
Performance: There are frequent page timeouts, with “some internal error” messages.
When one signs up with VN, one gets a confirmatory email from wisemob.com. It takes a few seconds to realise that this is from VN, since there’s no immediate indication of this connection. Perhaps VN was previously WiseMob? Given their business model, that’s certainly plausible.
In summary
VN could possibly be a Digg for Indian content. Filtering Indian content from the clutter of content on the Web is hard to do automatically, and there is evidence – Desipundit – that human-powered flitering does a stellar job.
But VN’s fundamental problem is that its revenue model – users voting for potential ad-earning content – has little to do with its larger intent of serving up “good” Indian stories. It might be best to retreat to a traditional ad-based/sponsored revenue model, while simultaneously making it easy for the community to vote for/against content of interest – again, to be a Digg clone.
(ends)
[1] In spite of this, some of the top articles are from the Hindu and from the BBC – which haven’t put up VN’s ad widget, of course. You would probably use up virtual currency only for articles that display the ad widget, and cast “free votes” for ad-free articles. But even then that would limit the number of ad-supported articles that make it to the top – a good (ad-free) story from the Hindu on top takes visibility away from some other ad-supported article.
[2] As Nick Carr says:
The most successful articles [online]… are the ones that not only draw a lot of readers but that deal with subjects that attract high-priced ads. And the most successful of all are those that attract a lot of readers who are inclined to click on the high-priced ads. An article about new treatments for depression would, for instance, tend to be especially lucrative… [but not] a long investigative article on government corruption [because] it doesn’t cover a subject that advertisers want to be associated with…