Does Posterous have staying power?
Sachin Agarwal created Posterous as a way for his parents to be able to see what he posted online. Two years later the blog publishing tool has more than 15 million monthly users, but experts still wonder whether its ultra simple functionality can catapult it into the rarefied air of Facebook or Twitter.
“No one has solved the problem of how does my 60-year-old dad see my photos,” said Agarwal, who launched his San Francisco, California-based technology startup two years ago with friend and former Stanford University alum Garry Tan. He said it was important for him that Posterous appealed to people who may be intimidated by the terms “blogging” and “social media.” “We don’t want to be thought of as a tech toy for Silicon Valley geeks. We’re surrounded by a lot of crazy tech, but our goal is to be so much more universal and applicable to normal people.”
Agarwal said Posterous gets around the need for having users register accounts by getting them to post their content – text, photos and video – directly via email to a central Posterous email address, which is then immediately published online in the form of a blog.
“The idea here is that I can post super easily via email from my phone or desktop or whatever while on the go and whatever I post it gets distributed out to the people I care about sharing it with,” said Agarwal, who worked at Apple for six years prior to launching Posterous.
Last month the startup raised another $4.4 million in venture capital in a Series A round led by Silicon Valley firm Redpoint Ventures, which had previously invested in MySpace, Netflix and TiVo.
“Over the first year and a half we were able to prove that the concept works. So now we have the money to take Posterous to the next level,” said Agarwal, who intends to double his staff from 6 to 12 over the next year and start spending on marketing and advertising. “We haven’t spent a single dime to acquire users. Just through word of mouth and organic growth we’ve been growing at 30 percent month over month. At some point it’s going to make sense to intelligently spend money on distribution, but our game has not been to create something dumb and viral and just throw money at it.”
Agarwal said the biggest challenge Posterous faces is trying to differentiate itself in the melting pot of social networking sites that has grown to include all manner of blogs and digital publishing platforms. He said Posterous is neither a pure blog like WordPress, nor a social media site like Twitter.
“It’s definitely just educating people about what we are, who we are, what we do and why we’re useful,” he said, adding the company – not yet profitable – hopes to become more attractive to businesses going forward. “We see a lot of businesses using Posterous. If we can get 100 million people using Posterous personally, if some percentage of them converts to using it for their business website then that’s where the revenue will come from.”
TAKING IT TO THE EXPERTS
Robert Scoble, an avid tech enthusiast who blogs at Scobleizer.com and works in online computing, is a fan of the site and thinks it will be used by Facebook and Twitter users who want to get deeper into the blogging experience than 140-word updates.
“It’s really easy to use and it’s pretty and it builds beautiful pages and it’s the kind of thing you’d feel proud sending around to your friends on Facebook,” said Scoble, who added that Posterous needs to focus on distribution channels like Facebook to try to convert more users. “The trick for them is going to be to get the Facebook user to come over. If you want to talk normal people that’s where they are. And if they can get the Facebook user to see the value in leaving Facebook and starting a Posterous account and publishing there then I think they’ll have a really good chance.”
As for monetizing the product going forward, Scoble said it will likely have to be through selling online ads. The key challenge here is to build up the right kind of audience that will be attractive enough to advertisers.
“Twitter’s Promoted Tweets is already coming on the market this summer and it promises to pay client developers 50 percent of the revenues, so if a Twitter stream gets put on a Posterous blog and a tweet shows up with an ad on it they’ll get some money off that,” he said, adding they need to make sure they don’t burn through their venture capital before they get to that point. “If they can hang on and aggregate a big enough audience I think there’s going to be a monetization that’s going to show up in the next year for them.”
B.L. Ochman, author of WhatsNextBlog.com and managing director of emerging media for Proof Integrated Communications, said Posterous has “terrific features”, but didn’t believe it would ultimately catch on with the business community, other than being used as a cool office Intranet.
“I can’t see it for business other than internally, because until they figure out how they will get search-engine juice from it – which I don’t see – I don’t see how it’s going to help business,” said Ochman, who didn’t like that the account she created inserted a “.posterous” in the Web address. “My problem with it was that it wasn’t my name. It’s the same reason I don’t use Blogger, I don’t want to use blogger/blochman I want my own identity… I don’t really want to send that someone else’s way. If they figure out that one then I can see using it for business.”
Ochman said Agarwal really needs to do a heavy marketing promotion to compete in the social media/blogging space, especially if he’s going up against Facebook or Twitter.
“That’s what it all comes down to for every single one of these new technologies: if you can market it well and can get influencers to adopt it,” she said, adding that a low monthly subscribtion-based service just might work if Posterous is able to market itself correctly. “I think just because it’s simple and easy and because your father could use it, I think people – at this point – would be willing to pay. Would they have been willing to pay a couple of years ago? I think not.”
Andreas Weigend, an online behavioral expert who advises startups and teaches at Stanford and UC Berkeley, was impressed at how easy Posterous was to use, but thought it needed to go farther as a social media tool in order to reach a wider audience and enjoy larger revenue-generating potential.
“Sure they will grow but what value do they provide that Facebook doesn’t right now?,” said Weigend, who considered it more of a novelty than a necessity. He added that Facebook’s strength is easily distributing the data you value to your network of friends, whereas Posterous is merely a content platform. “So it is a publishing tool. And there I think the price point is very very very low.”
Weigend also questioned the value in being able to sign-up your friends and family members to be able to receive your updates.
“So do they have mechanisms that when I add my mum she can actually say forget about it Andreas I don’t want to get those emails anymore?” he said, adding the application resembles spam of five years ago, when the first friend-sharing sites such as Plaxo was the flavor of the moment, but ultimately died because it was too hard for people to unsubscribe themselves from the service. “If you can’t escape then we’re back in the Plaxo world where everybody ran away. Theirs is not a binary world where it’s not personal or private. The social graph element I don’t think they are anywhere near to what the state of the art is.”
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