Kickstarter @ Union Square Ventures

Over the past few weeks, we’ve taken trips to several start-up companies in the media industry, as well as some well-established organizations that work in media.  It has given us a good insight on how one starts a media company like Course Horse or LocalUncle.  However, there is always the one issue that everyone faces; How do we fund this?  The answer is companies like Union Square Ventures.

Union Square Ventures is a venture capital company that funds several unique creative projects in the hopes that the project is a success.  They are based in Union Square, but the company funds project all over the country.  It was founded by Perry Stricker, who originally did it as part of a method of funding a jazz and in New Orleans to go to a music festival.  While he was unsuccessful, it did get the platform going.

General Manager Gary Chao and Community Manager Cindy Hu presented to us.  They worked out of an office in Union Square that was going under a lot of renovation at the time, but it was a decent-looking space.  It wasn’t exactly McGraw-Hill’s building in Midtown, but it served its purpose well.

Their presentation was mainly about Kickstarter, a a funding platform for creative projects.  To receive funding, one must do the following:


1) Pitch the project to the Kickstarter team
2) Put it on the Kickstarter site
3) Set an appropriate monetary goal for your project
4) If the Kickstarter team aproves your project, obtain funds.


Once the project is up on the site, visitors can choose to pledge a certain amount of money to the project.  The objective is to reach the monetary goal at a certain point.  These pledges can be as small as $25 or as big as $1,000.  Once the goal is reached, the profit comes in.

There are several different projects funded by Kickstarter, each divided into categories like art, film, photography, and film.  They have a 44% success rate, with over 1,300 successful projects and 1,000,000 total backers.  One that deserves special mention is the Greenaid Seedbomb Project. This project involves the use of clay seed bombs, which you can throw at an open grass area, and several different plants will grow there.  The seedbombs are dispensed in gumball machines, which were placed in flower shops around Los Angeles.  Their goal was $10,000 in pledges, and they reached it by July 2010.  

Union Square Ventures receives 5% of the profits from successful projects, and they do not charge anything for unsuccessful projects.  Also, charitable, non-profit organizations are not considered for funding, as there is a lot of confusion as to where the money is going.

This was an interesting look at how creative projects get their start.  I never considered the process of how a project is funded, and now I understand a little better.  The Kickstarter platform is an innovative way for creative individuals to get their foot in the door and really create something amazing.  Who knows, maybe further down the road, I will pitch a project of my own to Kickstarter, and see what happens.

McGraw-Hill

As this course is called “Media Organizations”, nearly all of the class is devoted to field trips to several different organizations in, well, media. The majority of them are start-ups, companies founded by either one person or a small group of people and providing a new media service to consumers. However, on this trip, we instead visited McGraw-Hill, a very well established media and publishing company known for their work in the fields of education and finance. This may seem like it has nothing to do with the purpose of this course, but in fact, it showed us a lot about how a large multinational organization like this one approaches New Media.

First off, there was the building. It's a huge skyscraper in Rockefeller Center, right across the street from 30 Rockefeller (home of NBC Universal) and the Radio City Music Hall. We walked in to a huge lobby, complete with high-tech security and marble floors. It really seemed intimidating, coming in to this giant building instead of a small studio office underneath The New School. It's a good thing we had people in the front to greet us as we came in.

We were received by Patrick Durando, Senior Director of Digital New Media at McGraw-Hill. Enterprise Community Member Edward Ford and Usability and Interactive Designer Ruth Neighbors also presented. These three looked a lot more corporate than our previous presenters, dressed in suits and ties instead of polos and jeans.

McGraw-Hill is probably most recognized for their work in textbook publication, but in fact, this is actually only a small part of the McGraw-Hill field. They also own consumer and energy rating companies like JD Power & Associates and Platts, as well as several S & P services in the financial sector.

As this company focuses a lot on education and finance, it is a bit of a surprise that they actually have huge projects in new media. One interesting one is Buzz, their inter-company social network, which was developed over several years. Ruth Neighbors and Edward Ford discussed what services Buzz offers, as well as the process that went through making it. It really is a very complex operation, but in general, they focus on Research, Evaluation, and Design. They also discussed a neatly-structures Experience Design Work Plan that analyzes the following: Key Activity, Assessment, Requirements, Modeling, and Development

Probably my favorite part of the tour was a look at the media studio at McGraw-Hill. They have entire floors devoted to media, complete with a green room and all the appropriate hardware and software. A lot goes on in this studio, including online lectures, interviews, and webcasts. Patrick Durando was actually one of the people responsible for starting this department, and it seems to be growing bit by bit. They even have a motion capture studio in London.

I loved hearing from start-up entrepreneurs, but I really had no idea what went on in the larger companies. Our visit to McGraw-Hill showed us how many huge corporations are starting to utilize digital and new media to great effect. Admittedly, I never thought much of working for a huge place like this, even less after our several other trips, but now that I see how places like McGraw-Hill are preparing for the future of media, I must say that I am intrigued.

Nihal Parthasarathi of Course Horse

For the most part, our trips in Media Organizations have been to companies who are established in the industry. We met entrepreneurs at the Varick Street Incubator, and we met executives at eMusic. On this trip, however, we spoke with a young up and coming entrepreneur, one who just recently started his company and is steadily growing it from the ground up.

On this trip, we met Nihal Parthasarathi, an NYU Stern Graduate who co-founded Course Horse, a web-based enrollment service for instructional and preparatory courses in New York. Users can sign their kids up for SAT courses, or find a Spanish class at the learning annex, among several other opportunities. According to Nihal, the process is a pretty simple one:

1. Customer searches for class
2. Course Horse chooses one
3. Course Horse books it
4. Course Horse can recommend other classes

There was quite a huge point for Nihal to start with, since most online registration systems are clunky at best, and completely unusable at worst.

Hearing Nihal speak gave us all valuable insight on how the life of an entrepreneurs goes. According to him, the business plan is often written in about six hours at a coffee shop, and is the passed on to the partner for editing. He and his business partner make good use of executive summaries in order to communicate to investors in the simplest way possible.

One great thing that Course Horse prides itself on is quality assurance. Users can give feedback on the courses they took that they registered for on the site, which helps in the process of referring other users to the courses. Not only that, but if a user isn't completely satisfied with the course they registered for, they can drop it within the first five weeks for a full refund. This helps give users an incentive to come back to Course Horse for registration of other classes.

Starting your own company may seem all glamorous, but Nihal mentioned several road blocks on his journey. For one thing, he noticed that networking is hardest when you need it the most, because when you just started, not many people are interested, and easier when you need it the least, when you have all the networking you can ever want. Investors often don't want to be a part of your company unless you are successful and have established yourself in the industry, which can take quite a while. Nihal's advice for countering this is simple: Make friends with people who can help you out in the long run.

Over the past few weeks I've had passing interest in starting my own media company. However, most of the people we heard from were established entrepreneurs or executives of huge companies. Hearing from Nihal, I really feel like I got to know what it's like to have your own start-up. It's good to know people who are in the industry already, but it is also important to have first-hand accounts of what it's like to be a young, up and coming entrepreneur, and I think our time with Nihal helped a little in that regard.

If you want to know more about his company, check out his website at www.coursehorse.com!