A year ago people used to say that “content is king” when it comes to making it big on the internet. But does the old paradigm hold today when every web 2.0 startup seeks user-generated content and 156,046 social networks were created on Ning? Meet the new king – “syndication”.
Ronen Shilo, CEO of US/Israel based Conduit, talks to VC Cafe about Conduit’s first financing round ($8 million from Benchmark on Jan 17 2008), the firm’s growth strategy, its vision and lessons learned along the way. As short background, Conduit is a marketing platform enables publishers to create customizable, branded community toolbars, free of charge. The uniqueness of its technology, is the ability of the owner to update the toolbar and message users in real time. In case you are wondering how Conduit makes money, it shares the revenue performed from the search box on its toolbars.
Congratulations on the funding. Can you tell me about the fundraising process? Why did you choose Benchmark?
Benchmark has a strong reputation for funding and supporting Internet/Web 2.0 companies. Their portfolio includes many successes, such as OpenTable, Second Life, Tellme, Yelp and Zillow. In addition, we have developed a very strong partnership. They have proved invaluable in terms of providing Conduit with access to their vast network of resources to support our strategy and growth.
How are you planning to allocate the proceeds?
I can’t give specific details in terms of numbers. But, I can tell you that we will be investing in business development and marketing to increase adoption of our successful on-demand, community toolbar service. And, we are investing heavily in new product development to expand our offering of website syndication solutions for web publishers.
You’ve had approximately 12 million toolbar downloads since inception. What’s your growth strategy and how many of them are active?
Actually, the number is 30 million. Active is a difficult number to define, because activity is dependent upon the toolbar subscriber’ relationship with the publisher. Some websites are those that you might visit every day, others are occasional or event driven, like looking for a job or researching a particular subject. All that aside, at any given time we have about 12 million subscribers actively using at least one of our community toolbars.
Have you introduced any unique features on the Conduit toolbar? How do you differentiate Conduit from other toolbars offered by search engines, social networks, etc?
This is always my favorite question, because our community toolbar service is so different from all the other toolbar offerings.
First, our service is 100% on demand. This is why I refer to it as a service, because it is essentially software as a service. The web publisher does not have to deal with software at all. A web publisher just goes to the Conduit website and creates a community toolbar.
Everything is automated, from design to deployment to maintenance. If the publisher makes a change to toolbar, the update rolls out immediately without any additional software installation for the subscriber. This is the reason we can provide toolbars to 140,000 publishers.
All of our competitors are either packaged software or custom software developers.
Imagine trying to program and maintain 140,000 toolbars as custom software projects!
The other thing that makes us unique is that we are strictly a service for web publishers. There is no “Conduit community toolbar” only a “Conduit community toolbar service.” Any one of the types of publishers you mention (search, social network, etc.) could create their community toolbar with Conduit. And, I have no doubt it would be better and easier to maintain. We have some very unique components for personalizing the toolbar through APIs, so that it is not just a generic toolbar, but unique to each subscriber.
Just like when you visit and log into the publisher’s website directly. We have hundreds of off-the-shelf components and gadgets to choose from. And, advanced Web components with APIs that allow publishers to syndicate virtually anything on their site straight to the community toolbar.
Can you share some of your lessons learned as an entrepreneur and CEO of an internet startup?
- Lesson 1 – hire the right people
- Lesson 2 – focus
- Lesson 3 – avoid VC funding in seed stage
Different sources reported about your wish to move beyond toolbars to a “”family of web syndication solutions”. What is your vision?
Conduit wants to become the industry standard for communications between online publishers and subscribers. As a standard – conduit will provide syndicated content on all platforms web, mobile, etc… to all publishers and all users…
You’ve compared Conduit’s “web community toolbar” to start pages such as iGoogle, myYahoo, PageFlakes and NetVibes. Can you please draw the similarities and explain your advantage?
Unfortunately, this comparison is as inaccurate as the custom software toolbar comparison above, because we are so different. The similarity lies in that these services allow people to subscribe to syndicated Web content, primarily gadgets, and assemble it into a personalized home page. Our community toolbar is also a vehicle for assembling syndicated content, but it has some very important and obvious distinctions. First, it is far less of a burden to the user. The publisher gives you a preconfigured set of services. I like describe this as the difference between having Windows Mobile or an iPhone. You can do anything you want on a Windows PDA, but with how much effort? Whereas the iPhone has a limited set of functionality, but it is exactly what you need and is far easier to use.
Second, these services are all website based. The community toolbar is browser based. And finally, these services require you to subscribe to their website first, before you can start adding content. That is, you must be a registered member of myYahoo or NetVibes. As a web publisher, this means that I must offer my gadget under the umbrella of another publisher’s brand, and my subscriber must also subscribe to the other publisher’s service first. With Conduit, web publishers offer their content directly to their subscribers. Conduit provides services that enable web publishers to connect with their communities. We sit in the background and don’t interact with their subscribers directly.
What have you learned from your current toolbar users so far?
For users – this is a toolbar with all the benefits of functionality, favorite brand, content, etc.
In the end of the day – they prefer to use a toolbar with their favorite site, with the exact info and content that they need. For publishers – it’s an innovative marketing tool, with advanced features and means to communicate and deliver content.
What is your vision for Conduit in the years to come? Is there an exit in sight?
Conduit should become an essential part of every website. Our objective is not to achieve an “exit strategy,” but to create an industry standard and expand the website syndication category
Lastly, what are your top 5 internet products?
First, I like the Conduit internal community toolbar. We use our own product for internal communications at Conduit. I get all of the info I need there, plus my RSS, Google search, my emails with the email notification, etc., and I listen to the online radio and podcasts. I also use it to communicate with my employees, etc…
Other than that Google, because their search is the best…and they are producing lots of other great products, like Google maps, Gmail, etc.. The iPhone, which is not necessarily seen as a classic Internet product, but it does a great job with email, maps, etc. It is at the forefront of both telecommunications convergence and web syndication to mobile devices.
After this, it is hard to name a product, because my focus right now is about syndication…which is a category that is about to be productized. There are many interesting services out there right now, but few that have found a solid monetization scheme. I believe this will happen, and Conduit will be in the center of it. There will be many great products coming out of this category.
Thank you for your time.
To test this out, I created my very own VC Cafe branded toolbar, you can download it here. The creation process was quick and easy, I’d recommend every blog to test it out. I was able to customize almost everything in the toolbar, from uploading a logo to selecting my search engines of choice. You can see the result below.