[Posted on January 11, 2008 - 8:00 AM]
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DiggUntil 5min.com earlier this month raised $5 million from Spark Capital, the rapidly growing online video instruction startup had spent a grand total of $400,000 to get off the ground, says co-founder and CEO Ran Harnevo. So why the new dough? Speed.
"Time to market in this sector is very short," he says, adding that 2008 will be the year when we see a shakeout among the many video tutorial players. "It will be no more than 12 months to 18 months before we have a winner."
To that end, 5min, which launched in April 2007, is rolling out new features in March, although Harnevo declines to say what the company is planning.
The entrepreneur, 33, formerly a journalist with Israeli news daily Yedoith Ahromoth and a pilot in the Israeli military, says success depends less on offering access to the best or widest range of content than on developing a superior technology for presenting instructional video. "A lot of content is becoming a commodity," he says. "But how you present that content will remain meaningful."
This explains 5min's focus on its "smart player," (click on the smart player icon to the right of the volume to see a demo on how to do "pegless grind tricks" -- trust me, it's not as fun as it sounds). The player, which lets users slow a video down, watch it frame by frame and otherwise control the viewing experience, is a powerful and distinctive feature from what most of 5min's rivals offer. It will be that much more compelling if 5min succeeds in liberating the player from the site by letting people embed it where they wish. Business partners, meanwhile, could get a white-label player to use for their own purposes.
Since 5min.com faces a crowded field, it has to move fast. Competitors include Scripps Network LLC's DIY Network, eHow (formerly funded by Hummer Winblad), Demand Media Inc.'s Expert Village, E-Knowledge Solutions Inc.'s SuTree, Graspr, Sclipo, Squid Labs' Instructables, Squidoo, TeacherTube, VideoJug and ViewDo LLC. Then there are heavyweights such as About.com and YouTube, which also offer how-to video.
Despite the number of instructional video companies (although there aren't that many compared with text-based how-to specialists), leaders have emerged. Alexa (with the usual caveat about the questionable accuracy of its data) at least offers a place to start in comparing traffic. It shows 5min making significant gains against leading rivals DIY Network, Expert Village and VideoJug, although DIY has by far the biggest audience (VentureBeat recently offered a more thorough comparison of the top sites):
Harnevo won't disclose 5min's number of unique visitors, saying only that the company had 5 million page views in December and is averaging 2,000 video uploads per month. But for now the battle may be less about traffic than, as Harnevo suggests, the race to become the de facto standard for people wishing to post, edit, transmit and recommend how-to material. In short, it's key to control the technology for engaging with such content. In attracting users, "That lets you reach a tipping point much more easily" than producing content, which is increasingly commoditized, he says. The goal: to become the dominant vertical video player for online learning.
Another pillar of 5min's strategy is to define itself squarely as an instructional video provider and to segment its video offerings to reflect consumer interests. "We're not doing entertainment," Harnevo says. "If people want Borat there are a thousand other places to get it."
That's essential if 5min is to capitalize on attracting users who in selecting a video are making what Harnevo characterizes as a "purchasing decision." They want videos "for specific reasons, not for fun," he says, emphasizing the importance of swiftly connecting 5min visitors with their exact areas of interest.
To that end, expect 5min to recruit more professional content producers -- it already partners with Encyclopedia Britannica -- to fill out the startup's large volume of user-generated pieces. "UGC is burdened by bad branding," Harnevo says. "No one knows how to monetize it."
Seeking more salable content, 5min is in talks with potential sponsors for some of its channels. Harnevo won't divulge names, but the idea would entail, say, Absolut Vodka working with 5min to produce a series of videos on mixing the perfect cocktail.
