Entrepreneurship Discussion for Innovation
- Miguel Virgen, PhD Student in Business
- May 7
- 7 min read
Discussion questions presented by:
Dr. Eugene Kaufman
Answers by:
Miguel Virgen, PhD In Business Administration Student
In affiliation with:
American Military University
Your Market and Your Customers
Evaluate your market and specify who your target customer is; be very specific. Apply information for the primary and secondary research you used to identify your target customer from your prior coursework. Explain why your target customer would be interested in your product or service.
When launching a business venture in the internet publishing industry, my business will target industry leaders, corporate executives, entrepreneurs, academic faculty, and graduate students looking for credible information. The targeted customers will be the type to turn to the internet and search on Google for data driven insights on topics in business, finance, economics, and the stock market. They will be within the ages of 35-65 and live in urban centers., such as in financial and innovation hubs, like San Francisco, New York, and London. The target customers psychographics will be in the realm of being time-sensitive and hold expert insights within their field to a high regard. Their mentality is set on having an economical outlook and have a natural curiosity as to what is occurring in the world we live in that affects the stock market and the economy.
The targeted customers explained will be interested in the content my internet publishing company will be releasing in online articles, YouTube videos, and Podcasts because they are seeking expert insights and credible information that breaks down complex lengthy analysis in short consumable content, saving them time, and leveraging factual information to make decisions. With the rise of artificial intelligence, and the deception of making public figures seem like they are the ones speaking through deep fake AI, and the lack of trust of headline news from large media companies that are influenced by money, there is an opportunity to step in and address these pain-points. This group is willing to pay for quality, and they demand credible content that is fact checked and relevant to their interests.
Your Funding
This topic is about the funding for your venture, whether it's personal savings, a bank loan, crowdfunding, or an investor. For this week's discussion, explain your financial needs for your business. Evaluate the route(s) you plan to take for funding and prioritize in which order you would seek funding. Explain your prioritization.
The breakdown of the financial needs for my business is as follows:
1. Hiring skilled writers and content creators to publish online articles, YouTube videos, and audio content.
$210,000 1st year
$480,000 2nd year
2. Website development and partnering or purchasing rights to use financial data technology on the website homepage that reflects the stock market prices in real time.
$10,000 1st year
$2,000 2nd year.
3. Paid online ads on Google.
$20,000 1st year
$4,000 2nd year.
4. Office Space Lease and coffee to provide to employees.
$28,000 1st year
$42,000 2nd year.
5. Laptops and computers.
$12,000 1st year
$0 2nd year.
Total financial needs: $280,00 1st year - $528,000 2nd year.
The first year, I will rely on raising funding from investors, while the second year, I will be able to reinvest the earnings from the business and use the additional funding to scale and grow further. The plan to generate revenue is through subscriptions and ad revenue by creating a subscription model for premium content and displaying ads through Adsense. With competitors like MarketWatch making approximately $400 million per year and The Economist approximately $500 million per year, there is an opportunity to take some of their readers and subscribers through effective marketing techniques.
The funding route I plan to take to secure capital for my startup venture is through seed funding from investors. I do not see my venture taking on debt in the beginning stages, as the focus will be on equity investment. The steps I plan to take by priority first are as follows: Developing a business plan, preparing a financial forecast, building a team of founders, creating a prototype website, identifying potential investors in San Francisco, pitching to these investors, negotiating the deal, and finally closing the deal to execute. Securing funding will be necessary to fuel my entrepreneurial ambitions and launch an internet publishing company with aspirations to surpass big players like the Financial Times, MarketWatch, The Economist, Reuters, and Bloomberg.
Marketing and Advertising
Create and post one of your marketing or promotional messages. Assess the potential success of the marketing channel you intend to use for the marketing message. Explain the purpose of your message, who your target customer is, and the ROI you anticipate.
Marketing Message: “Read in-depth insightful articles covering topics in business, finance, economics, and the stock market to improve business acumen.”
The purpose of the Google advertising campaign would be to gain new subscribers. The ad message will be created to encourage the targeted audience to read articles and subscribe. With advertised messages on Google, the startup can be better positioned as an alternative to established companies like The Economist or The Financial Times. The target audience for the ad message would be investors, business executives, financial analysts, and academics searching for information on Google.
ROI and Break-Even Analysis
Google charges for their advertising depending on several factors such as keywords, geographic, and the amount of people that click on the advertisement. The cost per click (CPC) in finance and business-related advertising can range from $2 to $15. For calculation purposes, I will assume a CPC of $6. Assuming an average conversion rate for a reader's subscription type of businesses to be between 1% to 5% I will base calculations on a conversion rate in the lower end of 2%. If I price the subscription at $20 per month, and a subscriber stays for about 12 months, this would generate a lifetime value (LTV) of $240 per subscriber.
For calculation purposes, I will assume that $20,000 will be initially invested in the Google Ads campaigns.
Ad Spend: $20,000 / $6 CPC = 3,333 clicks.
Conversions: 3,333 clicks * 2% conversion rate = 67 new subscribed readers.
One Year Revenue from 67 Subscribers: 67 subscribers * $240 LTV = $16,080.
Since the ad spend $20,000 is more than $16,080 from the new acquired subscribers, I would not break even in the short term. However, if the readers were to remain subscribers for more than a year, the business would recoup the costs over time, especially if the subscriber retention is high. This would mean that organic subscriber growth would be the best way to acquire new subscribers, and the funds spent on Google advertisements should not only be seen as to gain new subscribers, but also build brand awareness. Depending on who you ask is the $20,000 investment in advertisement worth the $16,080 return in paying subscribers, you might get a different response. For example, an accountant might advise against this if the business is cash-strapped since we would not see a break-even until after one year has passed. On the contrary, a marketing specialist might argue that the unseen quantitative dollar value is the brand recognition the advertisement would create by putting the brand's name in front of consumers for them to recognize, and build awareness as a young startup the industry.
Structure and Growth
After an entrepreneur develops an idea, he/she has to grow the idea into a business concept. Providing structure to the new business venture suggests that the necessary foundation on which the business grows must be effectively organized by the entrepreneur. This planning stage allows for the business to start to take life and become an implemented business. Research the methods that entrepreneurs may use to fully develop the concept. Which one is the best option for you to apply to your venture enabling alignment to your mission and vision? Explain.
Some Methods for Developing a Business Concept include, Lean Startup Method, Blue Ocean Strategy, Traditional Business Plan, and the Business Model Canvas (BMC). The Business Model Canvas seems to be one of the better options for my startup because it can make it easy to write and explain how I plan to deliver valuable content and also how I plan to build sustainable revenue streams, such as paid subscriptions and advertising. When it comes to presenting my business idea to others, those who prefer short and to the point information rather than reading extensive information, the BMC allows me to easily share how every element of the business fits together and allows for more creative development.
Furthermore, The Business Model Canvas can provide a visual way of outlining my business venture, which is crucial when launching a new internet publishing company that relies on multiple revenue streams like subscriptions and ads. As a startup I believe it is important to be able to easily and quickly make changes to my business concept. Hence, utilizing the BMC which is flexible and adaptable to future pivots from market feedback is essential for early stage survival.
What also attracts me about the BMC is how all the essential business functions can be seen on a single page in 9 categories. These include customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. I have even seen some examples of BMC’s with small drawings for each category, which helps create an even more creative visual representation of your business concept ideas and functions.
Control Scheme to Manage Growth
As a new business venture grows, it is important to establish mechanisms that can effectively answer the need to control the growth. Control can be both preventive and corrective measures that nurture the growth of the venture while making sure it doesn't develop ineffective habits or ideas. Applying control recognizes that the entrepreneur puts in place the checks and balances to monitor the growth patterns. Research and provide examples of at least one control scheme applied by a new business venture in your industry to have a managed growth pattern. What were the successes? What were the failures? Explain.
The control scheme needed to turn an online publishing website profitable would be to offer limited content for free but charge a subscription fee for further reading. For businesses like The Wall Street Journal and The Economist, that are in the internet publishing industry, they can face several challenges in maintaining revenue streams in a subscription and advertisement-based model. Metered paywalls give website visitors a limited 'allowance' of accessible content for free before being asked to subscribe (Zuora, 2024). A metered paywall offers users free access to a certain number of articles per month, then they are required to pay for a subscription to access more content. This approach balances the need to attract new readers while encouraging them to become paying subscribers.
Successes of the Metered Paywall Scheme
News Corp, the New York based company, which owns The Wall Street Journal (WSJ), said revenue rose 2.6% to $2.59 billion (Trachtenberg, 2024). By offering a mix of free content and premium pay-walled content, WSJ has been able to attract casual readers and gradually convert them into subscribers. Subscribers are more likely to remain loyal due to the specialized, authoritative nature of the content, which is a major factor in their decision to pay for the service. Unlike businesses with logistics or inventory management, having an online publishing website as a successful launch will require a unique approach to control schemes.
Failures and Challenges of the Metered Paywall Scheme
For users who are unwilling to pay, WSJ may lose out on casual readers, especially for younger demographics who are more accustomed to free online content. Readers were, for a long time, used to accessing content for free on the internet, and convincing them to pay for news can be a challenge. Even now, The Wall Street Journal faces competition from free news sources like Reuters, CNBC, and Bloomberg, which offer business and financial news without paywalls.
References
Zuora (Accessed, 2024). What is a Metered Paywall? Retrieved from,
Jeffrey Trachtenberg, (Febuary, 2024) News Corp’s Earnings, Revenue Rise on Subscription Growth. WSJ. Retrieved from,
