Mailbag: Monetizing a Community

mailbag.gifI received this in my inbox the other morning, and instead of simply replying to the person, I thought I’d share my response here, so that others in similar positions may benefit from the discussion. For protection of this person’s privacy, I have removed any personally identifiable information (including his domain names). His email is broken up into quotes below, with my comments under each.

Hello Mr. Burkett, I greatly enjoyed your article on the state of Ga VC/Web 2.0, and found it to be very informative.

I’m glad it was of value to you! Of course, it means that you have too much spare time! :)

I’ve been running a couple of automotive forums for the past several years. I have several sites but my main one is and The sites generate some income (low five figures) from advertisers as well as from Adsense and CJ. I havent really tried in earnest to monetize the communities as it started as a hobby and wanted to build community and loyalty.

When people say “I’m trying to monetize my community,” they generally mean “I’m trying to figure out how to make a living from my hobby site.” The first thing you need to do is answer this question: why do I want to monetize my community? If the answer is “because I want to grow a business, be my own boss, make billions of dollars, and take over the world,” then continue on. Otherwise, you are running a hobby site and are simply looking to cover your costs (which is not overly difficult to do.)

So, if you are reading this line, you are interested in growing a business. Great!

I will be launching several additional sites to leverage the traffic and expand out to political ( and ethnic sites (I own as well).

I see a disconnect here. Your current sites focus on the automotive industry. Now you are talking about “branching out” into political and ethnic arenas. Stay focused. Spend the time that you would allocate to those new sites instead on adding new features for your existing community.

I’ve watched the online communities for automobiles grow, and have to some extent help shape it. is fairly well known within the online automotive communities as the definitive and largest online community for the REMOVED. is probably 2nd or 3rd in size for the REMOVED.

At the end of the day, you can be the 50th in size – what matters most is revenue! Focus on growing the revenue streams around your business. Sit down and brainstorm other possible revenue streams. Scope out other successful communities, including those not in your space (automotive). See what they are doing, and emulate what works for others. There are thousands of hobbyist web sites out there. Some of them are doing very well. Your goal as the entrepreneur should be to seek those sites out, and learn what you can from their execution.

Here is one method that worked particularly well for me in the past.

I do not know any VC’s or people within the finance industry who may be able to fund the next stage for the venture…or even if my sites would even merit interest in that regard.

I took a look at your web sites, and see that on your largest, you have a little over 60,000 members. Given where your user count and revenues are, I doubt you will have much luck in convincing a venture capitalist to open their wallet and fund your business. That being said, there are other ways (such as finding some angel investors to put in a smaller amount.) Remember, VCs are looking for deals where they can get a 10x return on their money (i.e. here’s $5M, and in 3 years, we’ll be calling to collect our $50M). You’d need to show them a viable path to such a scenario before you can reasonably expect them to take an interest.

I would greatly appreciate any information or contacts you may be able to provide to help guide and fund me through uncharted territory.

If you want to find investors (at any level), the best way to do it is through networking. Get out there, beat the pavement, shake some hands, and expand your network! Don’t forget about fellow entrepreneurs as well – find a circle of like-minded individuals to help coach and guide you as continue to build your business! A good place to start would be to check out the TechLINKS event calendar. There are lots of events going on around Atlanta (such as the TechLINKS mix/mingle) – these are great places to meet local executives, entrepreneurs, and investors.

I thank you in advance and look forward to your response.

Hopefully, this reply was of value to you as well. Good luck!



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