Funding an "Adult Oriented" start-up?

A fried of mine is into the alternative sexscene (SM stuff...) and runs a club and a blog. Through him I hear a bit about the scene and meet some of the people. One thing I have noticed is that there is plenty of money in porn, and most of it is in specialities. The reason for this is that there is an abundance of mainstream porn available for free pretty much wherever you look, but if you're into something weird it is much harder to find, and thus there's a paying market for it. I heard the numbers for a site that does a weekly liveshow with some pretty serious SM and they are making very serious money.

I've also noticed that some of the consumers of the more specialised porn and upscale swingerclubs are wealthy individuals in their 40's and 50's. Naturally these people have a very open view on pornography and adult-oriented startups. If you try networking a bit in the upscale swingerclubs in the big cities and/or the well-run specialised sites you might find an investor. These people are mostly very open and very nice. Probably because they, like the gay community, are an outcast niche that has to constantly defend their sexuality.

If someone out there has advice but would rather remain anonymous by all means please contact us: christopher.m.pike(a)gmail.com.

This is exactly what you should do. I've got quite a few friends in the swinger crowds, and if you're going to find a good, mature, financially responsible investor for a really good adult-oriented idea, your best bet is in the upscale swinger community.

I'll confirm that they're a mostly very open and very nice crowd, and there's a higher proportion of wealthy and intelligent people among them who would love to invest in a good adult-oriented startup - especially if it's a fresh idea.

Re: "a clever idea that could change the porn industry"

I think a lot of consumers of porn are interested in short clips (5-10 min) of consistently high quality. This is a niche that isn't well served yet. YouPorn and the like is a grab-bag of short clips -- You can rummage around and find good content, but isn't a place where you can just go, press a button, and know you'll get something with good content, tailored to your tastes, with high quality sound and video, instantly the first time. An application that presented tailored "channels" as a TiVo-like application would stand to make a lot of money.

Studios and other porn content producers would like this if it could guarantee them a payment for their content, provide data on the viewing habits of users, and add user interfaces so that a consumer could click a button to buy a DVD or other product.

I don't think people will pay for it though. Streaming high quailty content requires both good source material and a lot of infrastructure - none of which are cheap.

Note that I said that the functionality was "Tivo-Like." No streaming is necessary!

You have content organized in "channels." You start out with very small resolution and short streaming "previews." But once you subscribe to a "channel" the application starts downloading longer Bittorrent "episodes" from torrents that are posted to an RSS feed. So there is an initial period when people only have access to "previews," but after the first night, it really is like a Tivo for short high-quality porn clips.

With Bittorrent, much of the bandwidth is provided by the P2P cloud. The bandwidth costs are for initial seeding and for the shorter, smaller "previews."

So really, the two keys to this idea are:

    1) Packaging - the easy place to find high quality clips
    2) The users bring their own bandwidth

I know that when I watch a porn DVD, what I'm really doing is going to my favorite one or two clips in the chapters menu. It's like in the old days when you had to buy the whole CD just to get the 1 or 2 tracks you really loved. I suspect that the market for really good, really short clips can come into being. Once one site shows that money can be made this way, then a lot of the high-quality free short clips will shift their availability to such pay channels, just like the shift from Napster to iTunes.

this + twitpay ftw

stcredzero: Are you a coder? A designer? It's obvious that you've thought about before! Would you have any free time in the next month?

Yes, I am a coder. And yes, I've been thinking about issues surrounding the delivery of content since before YouTube. And I am considering quitting my job and living off savings to do personal projects.

Like Miro for porn

Is there any "non-adult" application of your technology/process/methods? If so, one strategy may be to show that this will work with many different types of content and not just adult content. That way you go from being a purely adult oriented company to a technology company with multiple markets, one of which happens to be the adult industry.

For example, the ad network Adbrite operates one general purpose ad network under their main brand and another adult version at blacklabelads.com. They have traditional investors, including Sequoia.

There is, and we've shifted focus from the adult aspects to the non-adult aspects, but, it's not as much fun.

stop lying to yourselves. You're in it to make money, so if you have an idea that think will change porn, why not jump in head first?

Who said we were lying to ourselves? Of course we'd like to make money, we hate our jobs and the soul crushing banality of the 8-6 workday, but, enjoy eating.

We have no real moral object to porn or the porn industry.

We have a proof of concept, we just can't continue to do our jobs, work on FOSS, and work on this indefinitely.

We need funding to realize our dreams, hence the title. :D.

Why not work part-time on it, then once you get a bit of traction, then look for investment?

I mean... if you work 8-6, what do you do from 6-12? Just a thought...

Spend time with friends, loved ones, other hobbies? Life can't be all about your work, even if you do truly enjoy it.

A friend of mine did research about exactly this topic as she ran a startup in that same space. She wrote a thesis about it. Send me an email and I'll glady put you in touch with her: vincent /dot/ vanwylick /at/ gmail /dot/ com.

I don't think the respectable investors would want to sully their reputation by funding porn.

Not quite true. Zivity.

well they aren't an XXX porn site. More of a modeling site that allows nudity.

Still, "no adult stuff" is pretty much the rule in Silicon Valley.

Who said respectable investor means Silicon Valley?

You might want to read <a href="http://www.portfolio.com/culture-lifestyle/culture-inc/arts/...">this article from Portfolio magazine</a> before you approach investors: they read plenty of things too and are well-aware of the problems with the industry. The big question you have to answer is whether you can make money in the kind of environment described by the article.

Anyway, not to ask the obvious, but have you applied to YC?

We did. More as a lark than anything else. We weren't surprised when we received the rejection letters.

You seem to have some unrealistic expectations about the pornography industry.

Not true. We just don't want to lie down with the wrong dogs :).

There are so many dirty connotations in this thread. I don't even know where to start.

On one hand, this should be similar to finding investors in any industry: Look at work that you admire. Figure out who built and funded it. Figure out how to get into their social circle -- start where you can, and work your way to the right people by earning respect. And make sure you live in the right town (Van Nuys?) so you can be around the critical mass of people.

On the other hand, porn is special. The heroes of porn don't get famous for being smart or having great blogs. You probably have to wade through a lot of seedy people and organizations to find people whom you consider like-minded. You might never find them; perhaps you're better off working on a new-to-porn investor.

They don't have blogs, but there are a couple of big adult webmaster forums where they hang out.

Maybe I am going to burn a few karma points now, but my advice would be - don't do it at all. If you put a leg into porn industry, it will leave a stigma that you will not be able to get rid of for the rest of your life..it will forever be attached to your resume.

>> Mixing money and sex has always been a recipe for disaster.

Well said. ;-) You can obviously make money with sex, but you will pay the price after all. No loss, no gain.

I don't know if I would go so far. But I agree that a certain amount of caution should be applied here because of the obvious career risks to a move like this. However, one strategy someone could take would be to conduct their porn experiment simultaneously with a legitimate venture so that there are no experience gaps to account for later - just one example.

If someone out there has advice but would rather remain anonymous by all means please contact us: christopher.m.pike(a)gmail.com.

Talk to the Kink.com guys.

The story of the "Wanted List" guys might be of interest: http://www.wired.com/wired/archive/13.11/porn_pr.html

We're familiar with the article. We actually have that issue of Wired in our bathroom right now.

Maybe you should get in touch with Kink.com. I know a number of people who work there and it seems to be a good organization, and in its own way very scrupulous.

They're on my shortlist to contact!

Is there anyway that you could arrange an introduction? I would appreciate it immensely!

I can't promise much, but I could gurantee free porn for life to you and your children (though your grandchildren will have to fend for themselves) should anything come of it. christopher.m.pike(a)gmail.com

I don't know who you are, so I hope you don't mind if I decline to introduce you. Besides, the only people I know are website programmers and helpdesk people. If you are serious about your proposals you will find some way to contact the business side of the org.

Lucky for you, by law they have to post their mailing address (and, for what it's worth, these are the real offices.)

http://www.kink.com/2257statement.php

Hi there--please email me your contact info to: nick_hudson22@yahoo.com. We can carry a conversation from there :)

what type of money are you looking for?

Angel.