Inside TSL: Crunch Time
by Will Stewart, TechSideline.com
TSL Extra, Issue #10

From where I sit, the next sixteen months will determine the future of Tech Sideline. I figure we've got two more football seasons for this business to either take off and be a raging success, or for us to decide to hang it up and go do something different.

As a business entity, Tech Sideline has made great strides in the last year alone. Revenue is up about 250% over what it was last year, but the problem with that is that last year's revenue was so low that it's not even worth discussing.

Even though we have pumped revenue up considerably, we've still got a way to go to break even. To give you some idea, we lost six figures last year as we established our business and weathered the dot-com collapse, and despite revenue rising considerably this year, we'll likely lose tens of thousands in 2001, barring a Christmas miracle at TechLocker.com. But overall, we're on a trend that clearly points towards next year (2002) as the year that we either break even or stop banging our heads against a wall.

Here's how it works: after much flailing around in the dot-com world, we have watched the trends and watched our own business, and to support it, we have set up three revenue streams: TechLocker.com, the TSL Extra, and advertising revenue.

TSL went full-time (as HokieCentral.com) back in August of 1999. We introduced TechLocker.com in November of 1999, and we spent the first year establishing it and ironing the bugs out. Then, in November of 2000, we added the TSL Extra. We have spent nearly a year working on the TSLX and improving it, all the while trying to build the subscriber base.

Along the way, we also added banner ads and pop up ads, in an attempt to build that third revenue stream, advertising. That hasn't gone very well. It started off halfway decent, but over the last six to eight months, third-party banner advertising has fallen off a cliff, and the revenue is so small now as to be negligible. Not to mention the problems that the ads (pop-up ads in particular) have caused with out readers. It has actually gotten so bad that last I heard, our ad company was going to drop us in favor of pursuing larger, more national sites. So to this point, the "advertising revenue stream" has been a bust.

We feel the best way to make good advertising revenue is to ditch the third-party banner ads and hire a dedicated ad sales person that can pitch our site to advertisers who want to reach Hokie fans. So we did just that, adding a full-time ad salesman in early August. Since he works for us, selling only our web site, our ad salesman can provide prospective advertisers with personal attention and can tailor ad packages to meet their specific needs and give them a lot of bang for the buck.

I've always thought that the thousands of Hokie fans who visit TSL on a regular basis are an advertising powder keg waiting to be detonated, and now that we've got a dedicated salesperson on the job, we'll find out if I'm right.

Where We Are and Where We're Headed

Here's a recap of how everything stands:

1.) TechLocker.com

The store is doing well, but not spectacular. It's slowly building a reputation for quality products and extremely fast delivery. As I detailed in "Inside TSL: What TechLocker.com Has Taught Us" in TSL Extra #6, we need to freshen up the product lines, and that job is almost done. We'll be introducing new products very soon, and the rollout will continue over the next two months, as we bring you more of what you want and need.

We're also working on making TechLocker.com more of a gift fulfillment center, with give-as-gift capability. Again, I've told you about that before (TSL Extra #6), and that capability will be in place well before the Christmas shopping season.

In short, over the next few months, TechLocker.com is going to get where we want it to be, and heading into 2002, it will be going full-bore.

2.) The TSL Extra

The TSLX is doing pretty well. On August 10th, we logged our 1,000th subscriber, and it continues to grow. After just ten issues, that's not bad, because the company goal was 750 subscribers in the first year.

But we really need it to reach 2,000 or 3,000 subscribers at a minimum before I consider it to be a success. The TSLX "give as gift" function is ready to put in place as I write this, and it should be done very soon (it's going to have to wait until this issue gets out, and then I'll be able to give it some time and finalize it). We figure that will give us a nice subscription boost, as the more enthusiastic of you send 1-3 subscriptions to friends as gifts.

In short, I'd like to hit at least 1500 subscribers by summer 2002, and at least 2000 subscribers by the end of 2002. Anything less than those two goals will (a) disappoint me and (b) be a bad thing for the company bottom line.

3.) Advertising

This is the great unknown. While the addition of our new ad salesperson will hopefully enable us to add significant advertising revenue, hiring him means that we have taken on another salary and the overhead associated with adding an employee.

The good news is that our new guy is a born salesman, and he also has experience working with us and selling advertising in the past. We dabbled in dedicated ad sales for a while in late 1999 and early 2000, and our "new" guy handled it for us back then, so he's familiar with the sites and the clientele, and he knows what he's doing. He can hit the ground running, more or less. He feels that he can quickly make enough in sales to cover his salary and expenses, and before long, he will be contributing black ink to the bottom line.

It may be a little late for him to take full advantage of this football season's potential for ad sales and sponsorships, but by mid-2002, he's going to be going full speed and will make the most of the 2002 football season.

Beyond the Numbers

As you can see, all signs point to 2002 as the year to make a go of this thing. TechLocker.com, the TSL Extra, and advertising will all have a full head of steam during the year 2002, and we'll know by the end of that year whether or not we're fighting a losing battle.

But the decision to continue forward with Tech Sideline goes beyond just the numbers.

I started this web site in March of 1996 as a once-a-week hobby, and I've watched it grow and mature for well over five years now. Back in the beginning, my goal was to have a popular, well-read, well-received web site. I enjoyed Hokie sports, and I enjoyed writing about it and having people read what I wrote.

But over the years, as it became too big to do as a hobby, I had to take it on full-time, and thankfully, that opportunity presented itself. Now the goal is different: it must become a profitable business. It is now what I do for a living, and ultimately, what we all do for a living must be profitable, or our opportunity to do it ceases to exist (at least, if you're in the private sector, that's the rule). You can't lose money forever.

But beyond the numbers, the simple truth is that Tech Sideline is approaching the end of its evolution. There's nowhere left to go, and there are precious few ways we can morph this business, if it doesn't work as it's currently structured. Sure, we can turn it into a pay site, we can start charging for recruiting information, we can do this or that, but whether or not we'll be willing to do all that is another thing entirely.

For a long time now, the road ahead has been long, but now I'm starting to see the end. I have always thought that the web site had great potential to be a successful, self-supporting business, and I firmly believe that we have structured it to do just that -- succeed. If it doesn't, I think there's a part of me that is going to accept that I've done all I can, and that perhaps it's time to do something else.

Every year, for those of us who work on the web site and invest in it, the work and sacrifices associated with it increase. The traffic increases, and therefore the workload increases, we have to buy new servers and invest in other ways, and we have to give up a little bit more personal time to the monster. We do it because we love it, and we want to do this for a long time and see it succeed. But ultimately, you have to draw a line in the sand and say, "If I cross this line, and the sacrifices are still occurring, and the rewards aren't, it's time to quit."

The investors and accountants measure the sacrifices and rewards monetarily. I measure them in other ways, the large majority of them being personal. And as this business grows and matures, I feel that all of us are mentally drawing our line in the sand at the end of the 2002 football season. We donít talk about it, but if we did, I think that's the point in time we would all gravitate to. It's the time that makes the most sense, both financially and emotionally.

So What Now?

On our end, we'll keep doing what we're doing, which is improving the store, the TSL Extra, and selling some advertising Ö and giving it time. This football season is going to be very interesting here at Tech Sideline. I can't wait to see what August-December brings in the way of store sales, subscriptions, and ad sales.

Or maybe I can wait, ha-ha. But no, I've got a good feeling about things. I like where we're headed, and I expect to see some good numbers. Profitability? Not yet. Progress? Yes.

But I find that one of the biggest obstacles we battle is that old "The Internet is free" mindset. I see it every day: some of our busiest message board posters and most frequent site visitors are not TSL Extra subscribers, and they've never shopped at TechLocker.com.

The reasons why people don't spend money on certain things are complex and varied, but in our case, many times, it just never occurred to them. After all, ESPN.com, USAToday.com, and all those newspaper web sites are free, so why should TSL require some sort of Ö contribution? These folks are not freeloaders who expect something for nothing -- they're good people who love Tech Sideline, and it just never occurred to them that this site costs massive amounts of money to run, and therefore requires significant revenue to stay afloat.

Combating that mindset takes a lot of time and effort. As TSL Extra subscribers, I count the thousand or so of you, as a group, among the ones that "get it" and understand this web site a little better. And in this very article, you have also just been treated to some details and facts that I would not post out on the free area of the site, which by definition gives you a better handle on what's going on than the non-subscribers.

So, on your end, I'm asking you to be TSL's foot soldiers and to spread the word and work against the Internet-is-free mindset. Do it quietly (the last thing I want is people screaming on the message board "TSL IS LOSING MONEY, SO YOU PEOPLE BETTER PONY UP!"), but be persistent and persuasive.

The next time you're talking to a friend, and TSL comes up, and your friend says, "Yeah, I love that web site!" just reply casually, "Me too. Do you subscribe to that TSL Extra thingy?"

If they say no, you know what to do: tell them to give it a shot. If they can't afford it, that's one thing, but if they say, "No, I'm too busy to read it," then just say, "Well, you can give it as a gift you know. You ought to send it to your brother/mom/cousin, the big VT fan." (But don't do that until the "give as gift" function is ready.)

Next time you see a friend who's talking about buying some new Tech stuff, ask them, "You ever try TechLocker.com?" If they say no, work on them. Tell them about those insanely fast delivery times.

The next time you hear someone complaining about Christmas shopping, tell them, "Do some of it at TechLocker.com. You can send a sweatshirt to your brother/mom/cousin in Hampton without even having to get out of your chair."

Work on 'em, folks. We're setting things up on our end and turning up the volume on our marketing efforts, and with your help, we can get over the hump -- and hopefully, never have to talk about this stuff again. I don't like talking about it.

The clock's ticking, folks. It's crunch time. Let's get it done.

 

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