Monday, May 30, 2011

Yourekas Business Model

So why do I think Yourekas has an opportunity to outperform its competitors? I think that the current video-making websites all have their flaws, and that the best methods of creating user-generated videos in use today can be improved upon. Basically, Yourekas will compete with competitors using two types of business models. One consists of big companies that use search engine algorithms to find popular topics. Then, they project a value for the ad revenue from a video on that topic, and pay filmmakers to make a video about the topic for a sum of money less than the expected value. The payment is usually something like $50, and the filmmakers can make as many films as they like. The other business model is to get big companies to post a reward of several thousand dollars for a contest in which anyone can submit a video. The company then picks their favorite, and gives the money to the winner after the website takes a cut of it.

Like I said, both have their flaws. The first model fails to create enough incentive to make quality videos. They are often full of superficial content, lack important content and are far from entertaining. This method fails to utilize one of the Internet’s most valuable characteristics: the ability to make a video go viral. Also, Google recently announced that it is changing its search algorithm to punish so-called “content farms” that simply publish as much content as possible without much regard for quality. The second model does save companies money by getting amateurs or small studios to do what big, professional studios did before. However, they still rely on an individual or team with limited capabilities and resources. Also, some of them have all-or-nothing payouts in which a contestant can submit a remarkable video, and not receive a dime for it.

The Yourekas model is supposed to improve on these limitations. First, users will submit yourekas, which are original ideas about how to use products in ways most people are not familiar with. These will be screened by me, but only to remove submissions that don’t have enough content. Then, the person who submitted the youreka will be responsible for make contests need to create an entertaining how-to video of the youreka. These contests will be for things like music, illustrations, graphics, and acting. Users will submit works to be considered. The user running the contests will select a few favorites, and then let put them up for a vote by the public. Think of this stage like American Idol where judges pick the contestants who go to Hollywood, and then let the audience vote. The user running the contest will then have the choice to go with the crowd’s selection or pick his own. Think of this stage like the lifeline in Who Wants to be a Millionaire, in which the contestant can pick the choice the crowd thinks is the answer or go with his gut feeling. Finally, the winners of each contest collaborate to make the video and share the revenue, with Yourekas taking a cut.

I did not come up with this method out of the blue. It is the result of several iterations and makes use of a concept I learned while getting my MBA at Rider. It is a derivative of the method for coming up with solutions to problems called nominal group technique. Basically, employees are told of a problem before a meeting and asked to come up with solutions to present at the meeting. After all the potential solutions are presented, all of the employees discuss the strengths and weaknesses of each idea, and then rank them. Nominal group technique has been shown to work better than brainstorming in coming up with effective solutions. I learned about it in both of my Organizational Behavior classes, and had the chance to discuss how it relates to Yourekas with one professor, Dr. Promislo. We discussed how crowdsourcing can increase the creativity of the films, but how each project still needs a leader to guide the process.

There are a few reasons why I like the Yourekas method. One, artists can specialize in what they do best and only focus on that one task. In the other methods, an artist in a small team may have to fill gaps in the team’s abilities and work on something that their heart is not into. Two, artists don’t have to create something entirely new for each contest. They can submit something from their portfolio, and then explain how something like it can be used for that particular video. This means that they don’t have to risk putting out a lot of effort without winning anything. They only have to work on the project once they know they have won the contest. This reduces their risk compared to other methods. Three, once they have won the contest, the artists can work on the project as much or as little as they want because there is no set reward. The artists earn a share of the ad revenue, meaning that Yourekas is more of a meritocracy in which the money users make should correlate more with their effort than it does at other sites. Four, this method creates virtual teams, unlike other sites that mostly rely on one individual or studio to make the video. This should lead to more creativity and better quality videos because the talent pool is bigger and more diverse.