Andre Rademan and Ken van Ginkel launched Bizcommunity in August 2001. Rademan, who had an IT background and had worked for several large companies, was 30 at the time and had seen a gap in the market for a content-driven website that would provide industry news across all sectors. He had started working on his idea part-time in 1999, and full-time from 2000, living on his savings.
Van Ginkel, also 30, had studied sound engineering but found he preferred the idea of writing instead, so when Rademan approached him in 2001 with the proposal for Bizcommunity, he jumped right in.
Narrowing the focus
“Initially, we were going to launch a news website that would cover all industries,” says Van Ginkel. “But we soon realised that was too broad and we would have to focus on one. We settled on advertising and media because no-one else was providing online news for this audience.” The Internet bubble was deflating at full speed at the time, but the two were convinced they were onto something. Determined to get the business off the ground, they got some cash from friends and family and stuck to a very tight budget. “We launched the site on our own steam,” Rademan recalls. “A few months down the line we approached an angel investor – who is still a shareholder in the business today – when we needed some bridging finance, but we also ploughed every cent we made back into the business.”
After Van Ginkel joined Rademan, the two moved into IT start-up incubator, the Bandwidth Barn, where they stayed for six years. There they not only had access to all the office space and infrastructure support they needed, but also to interaction and sharing of ideas with 30 other young companies. It was an opportunity that both found invaluable. “Because our overheads were so low, we started to make a profit after just ten months,” says Rademan. But we were still only paying ourselves a fraction of our salaries; just enough to cover personal expenses. Unless you have enough personal funds that can be invested, as well as the ability to sustain yourself for at least 18 months, I would suggest building an online business as a part-time project. Keep improving it and reconsider your options as soon as it gets good feedback and shows promise.” Rademan points out that he based the idea for the site on existing international models, and also on South Africa’s own technology industry news portal ITWeb. Being a technology expert allowed him to keep all the IT in-house, a factor which he says is important for an online business as uptime is critical. What makes for great online content? “Be interesting, informative and relevant,” says Van Ginkel. Don’t be boring. Most important, find out what people want to read about and give it to them. The only way you can do this is by actually speaking to your audience and asking them what they want.”
Getting the cash to flow
Testimony to the value of a good business plan is the fact that Bizcommunity’s core offering has not changed much over the years. It remains an advertising and marketing news site that looks at the state of the industry, and reports on events, research and other news to a focused business community. Bearing in mind that content on the Internet is largely free, at the same time, it has to be of a consistently high quality to attract readers and keep them coming back. How do you make it available to users at no charge, but still create a sustainable and profitable business? What Rademan and Van Ginkel have done very successfully is to build a range of revenue streams that have concurrently enabled them to generate loads of free, relevant content. One of their main products is the press office, a micro-site that is branded with the client’s own logo and corporate colours, and allows them to distribute press releases to subscribers daily or weekly.
The company’s news is published on Bizcommunity and in the company press office showcase. Search engine optimisation ensures that articles in these press rooms are easy to find via the search engines. A total of 450 of the largest companies in media and marketing in South Africa have a Bizcommunity press office, all of them contributing content of value to users, and at no cost to Bizcommunity. Also popular is the recruitment section which advertises jobs in the various industries, again attracting users with valuable content that comes free of charge. For businesses that want to advertise on the site, Bizcommunity offers animated and text ads, or they can choose newsletter advertising and place banner ads in the daily industry newsletters which go to all 93 500 subscribers. Advertisers can also sponsor one of 60 website sections focusing on specific industry topics.“We also have more than 12 000 companies listed in our business directory,” says Rademan. “Some have free listings, and others have paid-for full page or multipage listings. It’s a good strategy to first offer something for free, and then have a premium option available to companies wanting higher visibility.” Rademan and Van Ginkel agree that it’s wise to have a variety of revenue streams. If one drops, then overall revenue is supported by the other business units. “Our products have evolved over the years,” Rademan adds. “We listen to our customers and the market and change them to suit their needs. When launching a new feature or product, we research and develop it as best we can, but we are very attentive to the feedback we get after its launch.”
Growing the business
Bizcommunity’s growth from day one was based entirely on word-of-mouth. “When we got the site up, we sat back and waited for traffic to come, but it did not happen,” says Rademan. “That’s when we started inviting people to visit through a concerted campaign in which we emailed industry leaders and sent out press releases. We were confident that the product was so good that they would refer others to the site.” Growth was slow in the beginning, but once the website gained traction, the numbers multiplied. In year one, Rademan recalls pitching to an agency when Bizcommunity had only 87 subscribers. “We always had a long-term vision and faith that the website would eventually be a success, although it took much longer than expected. We were never fixated on competitors; instead we focused on improving our product and giving the reader and advertiser as much value as possible. ”This paid off and we passed the circulation of our largest competitor – which had 10 000 subscribers at the time – 18 months after launch.”
They employed their first member of staff, in sales, in 2003. It was at this time that they realised they needed to grow press office and advertising sales to provide the resources to fund growth in the rest of the business. Once sales increased, a production manager was brought on board in March 2004. That same year, experienced industry editor Louise Marsland joined to head up editorial, which had been managed solely by Van Ginkel up to that point. In 2006, Robin Parker was appointed as MD. “We realised we needed someone with experience and industry knowledge to grow the company to the next level,” says Van Ginkel. “The result was an immediate increase in revenue. It also allowed the two of us to focus on what we are good at in the editorial and technical areas.” Another coup for the business was the appointment of Chris Moerdyk as chairman. “He has many years of experience and is very well connected in the media and marketing industry,” says Rademan. “I think at this point we felt as if we had grown up. Although we had monthly management meetings in the past, board meetings were a bit more formal, progress reports were better presented, and decisions were taken by the board, not by Ken and myself. I think this is the final growth phase that any start-up company needs to go through.”
Replicating the model
It was only after six years – and the certainty that they had a working business model – that Rademan and Van Ginkel looked at expanding into other industry sectors, and so Media and Marketing Africa, Retail South Africa, and Medical South Africa sites and newsletters were launched in 2007. Like other successful online businesses, they have been able to replicate their original model, grow the business into new channels at a relatively low cost, generate new revenue and amortise their costs.
Looking to the future
Like most South Africans, Rademan and Van Ginkel have been waiting patiently for bandwidth costs to come down. “Once there is greater access to the Internet, we can expect to see a radical increase in the number of users in South Africa,” Rademan says. “The opportunities for online businesses are limitless, provided you remember that an online business is still a business, and all the normal rules apply, such as having to research the gap in the market and providing a unique product that is different to what is currently available.
They agree that growth of the online industry will be two-pronged. On the one hand, there is no business in any industry today that can afford not to have a website; on the other, growth is set to be fuelled by consumer demand for online products and services. “There is massive scope for media businesses at the moment,” says Rademan. “You only have to look at how huge 24.com has become. News24 has over two million unique browsers and 24,3 million page impressions per month.” Van Ginkel says they were lucky that Bizcommunity had no competitors, but he also has the widely-held view that the Internet environment – unlike the brick and mortar world – is one of cooperation and pooling of resources. “It’s changing the way people view things. To focus on culling competitors is not very progressive in online. It’s far more valuable to find ways of working together to grow the number of users.”
Bizcommunity website Stats
- Unique browsers (readers) per month: 311 792
- Page impressions per month: 3 421 522
- Ranking: One of the two largest websites focusing on industry news in South Africa
- Press offices: 450
- Business directory: 12 000 companies listed
Bizcommunity.com is a member of the Online Publishers’ Association of SA (OPA)Statistics quoted are for January 2010.
Bizcommunity Newsletter Subscribers
- Media and Marketing South Africa: 87 000
- Media and Marketing Africa: 36 000
- Retail South Africa: 26 500
- Medical South Africa: 14 500
- Total number of unique subscribers: 93 300
- Subscriber growth: 1 000 new subscribers per month (consistent over a number of years)