Despite good response and feedback from potential users the project has proven to be difficult to fund and too big to bootstrap. Consequently, we are sad to announce that we have decided to close the project.
The idea of Publicisto emerged from years of experience with blogging and content production communities and platforms. While social media platforms like Facebook and Snapchat was taking over peoples online “chattering” and casual sharing, we saw an emerging trend of self-publishing and freelancing among all types of professional and semi-professional content publishing. The trend coincided with the self-employment trend that we see in all types of professions around the globe.
Multiple content platforms and publishing systems where available to accommodate this development but most (if not all) of them focused on specific types of content or specific functionality. None of the existing platforms had a holistic approach to the professional self-publishers need for a central hub for all their content and distribution which they fully owned and controlled.
This observation lead to the idea of a platform tailored for self-employed professionals who depended on revenue from their content or who published content to promote themselves and their services. Publicisto was in many ways going to be a subscription based “GitHub for content” filled with all the functionality this group needed to publish, promote, distribute and sell their content without taking any revenue share or ownership of the content itself.
After years of concept thinking and discussions with our current owners, we finally set out to realise Publicisto as an independent venture. It all looked promising. Everyone we presented Publicisto for loved the concept and the investors liked the business case. We set up a pre-launch website where people could sign up for early access and even that went beyond our expectations.
The plan was to try to fund a product launch some time in 2019 with seed investors. If we failed to raise enough capital, we would bootstrap the development taking on consultant projects as we went.
In March we engaged Kadence International to do a market study to see how well we fit with the needs of our target groups. Based on our limited budget we decided to use a qualitative method through in-depth interviews and concentrate on text based freelance journalists and copywriters in New York. This would give us valuable insights in how the freelancers conducted their business today and enable us to discuss the concept of Publicisto in full.
Overall the results from the study where positive. There was a great need for services that could make the value chain simpler and less painful and all participants were willing to pay for a service like Publicisto.
We now had the thumbs up from “everyone”. Despite this we decided to stop the project.
Here is why:
All or nothing
The freelancers in our study confirmed many of our presumptions on the pains and frustrations freelancers face every day. They used many different services to promote and distribute their content and services and many found the interaction with customers on their delivery often to be a challenge. If Publicisto could be a platform that solved what they used many different platforms and tools to do today, that would be great. They added an escrow account service that would solve the problem of getting paid in time or at all since this was a big problem freelancers faced and it needed to be a part of Publicisto. The idea of traceable and verified content was something they found intriguing but at the same time where skeptical to whether was possible.
Publicisto represented something they needed; a holistic “one stop shop” platform that took care of every part of the value chain. And that is what they wanted. If we where to launch parts of the service, it would only be a replacement for one of the services they already used. It was all or nothing.
This was not good news for our bootstrap strategy. The full implementation of the conceptual platform was much bigger than a “minimal viable product”, even if we limited ourselves to text-based copywriters and journalists.
Too big for seed, too early for venture
There are many myths when it comes to private equity venture capitalists. One thing can be stated with almost complete certainty though, it is all about risk management and they do not enter a start-up in its “start-up phase”. You need to get to the “scale-up phase” to get funding from them. To get their attention is easier. And we got it. The common response was “great concept”, “solid team” and “great business case” which was encouraging and important feedback for us.
If your start-up is too big to fund by yourself the chance is that it is too big for business angels, friends and family also. We had to look for independent investors, seed funds and corporate investors. The corporate investors we talked to appeared to have the same approach as the venture funds. They would rather come in at a later stage, when the product was ready for scale up. At the same time, it was obvious that we would need much more funding than what was realistic we would be able to raise from independent investors and the few seed fund investors we where able to talk to.
The size of the project meant that to raise the necessary capital at such an early stage represented a huge challenge when it came to set a placement prize. An investor summarized it well; “You will need at least $6 million and that would mean that your company should be prized three times that post money to ensure that you, the founders, have enough stake to make the investors interested at your development stage. Getting that kind of valuation is next to impossible so early in the development”. Whether the numbers he used was accurate or not his point was clear and true.
In short, working with our start-up we had raised our funding target from financing the launch of a minimal viable product in late 2019 to financing a full implementation some time in 2020/ 2021.
It is with mixed feelings we have stopped all further development and are packing down the project. However, reality is what it is. Maybe Publicisto will be realized one day but that is for future events to decide.
It has been very rewarding working with Publicisto. Even though we launched the start-up last year the concept has been part of our lives since 2016. We have learned a lot from all the people who have guided and helped us with their insights and expertise, and we have been able to dig deep into technology and business issues that surround internet publishing, freelancers and self-employment.
This insight has made us certain that If not Publicisto, something like Publicisto will emerge in the future of publishing.