Good news for iLogon, pay sites on the rise

While working on the business model for iLogon, I noticed an interesting trend developing on the web. Is Web 2.0 a repeat of the dot com crash? Once again we started seeing ridiculous valuations on companies that generate little or no revenue. The difference this time? Users are King. If you have a lot of users, and more specifically, a lot of key information about the users, you may have been sitting on a gold mine. Look at the valuations for Facebook, Linkedin, and MySpace. While constantly watching the VC activity throughout ‘08 (preparing for my own funding campaign) I saw one “cool” or “sexy” Web 2.0 application after another get funded. The problem I saw was, cool and sexy is not a business model. Where was the revenue going to come from? Even Facebook, with their 120M users can’t sustain themselves on advertising alone. When you read between the lines, you realize pretty quickly that the plan is to go get a bunch of users and figure out how to monetize them later.

So this brings me to my earlier point. When I saw this developing over the last few years, it made me even more confident that the iLogon model was rock solid. While ‘08 was not necessarily the best time to get funded if you didn’t have the next “me too” social network or freemium web app, it was a great time to bootstrap iLogon. And a funny thing happened on the way to the iLogon beta launch. The economy tanked, the stock market took a crap, and VCs closed their wallets. This lead to increased pressure to generate revenue for startups AND established companies, which in turn forced these companies to scrap the free model in many cases. Google and Jott Networks are 2 examples that stand out for me, but there are many more coming.

http://www.techcrunch.com/2009/01/23/google-puts-the-squeeze-on-free-apps/

http://www.techcrunch.com/2009/01/13/no-more-free-jott-for-you/

So, how exactly does this help iLogon? For those not familiar with the iLogon solution, it’s a web application for aggregating and managing online subscriptions, more specifically, fee based subscriptions. We’re signing up partners who offered fee based services at a steady pace, and are in the process of becoming a Google reseller. The iLogon app let’s users build a “package” of subscriptions sites, and provides single sign-on, consolidated billing, reviews and recommendations, and perhaps the best feature – gives the user a discount on the subscription fees. The more sites out there that are fee based, the better for iLogon, especially if the industry continues to move in that direction.

The bottom line? The web appears to be trending towards fee based content and services over free, and iLogon is positioned well to take advantage of this trend. We launch our beta release by the end of January, and will be in full production by the end of Q1. Perfect timing?

http://www.ilogon.com/default.aspx

iLogon Update

I recently sent an email to everyone who has contributed to or inquired about the status of iLogon since we started last summer. I thought I would post a copy of that email here to record our current status and get access to anyone who is interested. Many people have helped iLogon out in one way or another, and for that I am forever grateful! 2009 is shaping up to be a great year for iLogon, and I have very aggressive goals that I am confident we can achieve.

Below is an update on our status and plans for the year. For those who are interested, please read on and provide any feedback you may have. I’m always looking for advice, thoughts and ideas on the business. If you only had minimal interaction with iLogon or don’t even remember who we are (could that possibly be true?? I offer thanks for any help you have provided, and won’t take any more of your time.

-      We are launching our Beta Release later this month. By the end of Q1 we will start signing up production users and generating revenue.

- We have about 10 partners with signed contracts, and more coming in every week. We are well on our way to the goal of 100 by the end of ’09.

- We are finalizing a deal now with Merchants Information Solutions (Identity Theft Protection/Credit Monitoring) to include their basic monitoring service for free when users sign up for iLogon. This is a great deal for us and our customers and will contribute to our viral marketing campaign.

- We are closing a deal now to bring in a Chief Strategy Officer who will help us land some “big name” accounts we have targeted. I’ll provide more detail here later.

- Some of the key accounts we have signed up or are in progress of signing up include: ESPN, Rotowire, TrainingPeaks, Dimdim, Photobucket, Merchants Information Solutions, Wine Library, Box.net, Britannica, Zagat, Motley Fool, Wall Street Journal, and many others.

- Our Marketing Campaign has started, but will pick up in full force once we launch. This includes viral, word of mouth, traditional marketing, social media, and every available channel for getting the message out and acquiring users. We’re growing our presence on social media platforms, building relationships with bloggers and press, collecting beta users, and getting the word out, all in anticipation of the launch.

- Funding continues to be a challenge, but we have some good prospects, and continue to work hard on extending our runway. Between our early stage status and the state of the economy, it has been difficult to raise money. However, we have secured enough seed funding to bootstrap our way to launch. Hitting these key milestones gets us closer to revenue and funding, both of which will enable us to grow faster and hit our goals.