Internet Startup Has A Clue

This has all the making of an Internet thriller — Can you follow these mysterious clues?

The majority of visitors to this Web site are women.
It attracts 300,000 visitors a month.
It has signed an exclusive deal with one of the best-selling authors of all time.

What is it?

The name is Mysterynet.com, a Web site dedicated to providing mystery fans with a taste (and more) online of what they love in print, audio and video.

You don’t have to be a rocket scientist, or even George Gallup, to know that mysteries are one of the favorite entertainment genres of escape. Whether it’s books, movies, TV shows, or computer games, millions of people curl up on the couch, or recline in the cineplex to enjoy a good mystery every day.

Enter Mysterynet.com, the inevitable Internet ‘solution’ to bringing mysteries online. Mysterynet started four years ago as thecase.com, which remains a part of the larger, chock-full-of-mysteries Web site. The initial concept, still in place, was a free e-mail sign up. Subscribers are sent a mystery every week to their inbox, and can find the answer back at the Mysterynet Web site. Among other highlights at the Web site are chat areas, trivia, and real time mysteries where users get to vote on how certain aspects of the plot develop.

Mysterynet is the brainchild of Steve Schaffer, a veteran marketing maven for several software-related enterprises. Schaffer believes Mysterynet is ready to tap into the third wave of Internet growth, specialization. “The first Internet users were geeks,” says Schaffer. “Then we saw order from chaos as portals and other general interest sites sprang up. And now there’s specialization.”

As quickly as the Internet has evolved, Schaffer admits he thought the first two waves would come faster. He had the idea for thecase.com in 1995 which was quietly released in “stealth mode” to get feedback and work the kinks out. “If you focus on a special interest, you have the opportunity to form a long lasting relationship,” Schaffer said.

It’s a special interest with a demographic that marketers should find attractive. Schaffer says the core audience for Mysterynet are college-educated females, age 18 to 54, with annual income of over $55,000. The preponderance of women visitors is surprising for a site without explicit female appeal. According to a Media Metrix analysis in March, MysteryNet has 275,000 unique visitors a month, 79 percent of whom are female.

Schaeffer’s Newfront Productions Inc. controls Mysterynet and plans to announce other specialty sites next year. The company was started with $350,000 in capital from Schaeffer and friends. San Francisco-based Jesse Hansen Capital kicked in $1.85 million in a second round of funding in September. Hansen specializes in helping small privately held growth companies. Among its early investments was Wired magazine.

“We try to stay out of day to day operations, but we work closely with senior management on keeping a laser focus on the important improvements,” said company executive John Hansen. One of the key decisions was to exploit what people like about and use the Web for, rather than simply bring a literary medium online. “Nobody wants to read a novel on the Web.” That’s why Mysterynet includes so-called “mini-mysteries,” as a lunch or leisure time diversion.

No revenue figures are available. Schaffer says he has a three-tiered strategy for generating revenue: ad sales/sponsorship, e-commerce, and the sale/distribution of digital products and services. Keeping a focus on what works on the Web is seen as key to Newfront’s growth. Mysterynet has to leverage and grow its first mover advantage because there isn’t much else to keep would be competitors at bay. One way the site has done that is to lock in such well known (if ancient) mystery icons as Agatha Christie and Nancy Drew. But the world of mystery is br

immingwith newer, top talent (even Robert Ludlum is new compared to Christie and Drew). Fast forward to the ’90s and it seems inevitable that best-selling authors like Patricia Cornwell and Sue Grafton will find their way to a Mysterynet-like Web site if Newfront can’t grab them first. A site called themysteryreader.com lists the Web sites of well known mystery writers such as Grafton.

Mysterynet has 20 employees, almost half of which are contractors. The current Internet focus may eventually lead its reach beyond the PC. As post-PC handhelds and other digital products evolve with wireless Internet access, Schaffer sees an opportunity to at least augment what Mysterynet does now. He may also start charging for certain new elements of Mysterynet.

Schaffer argues that past efforts to charge for Internet content, such as Slate, failed because they tried to collect for something that was initially free and users felt ripped off. Schaffer says any fee-based element or service has to be a richer, more personal experience for the user than what they get for free. Without getting specific about content, Schaffer says what he has in mind will require a high-speed connection.

An IPO is a possibility, though it doesn’t seem near term. Schaffer says it’s hard to put a time frame on when he might go public, as the focus now is on building the business. He’s also not ruling out being acquired. What will happen remains to be solved.

IN A NUTSHELL:
Company Name: Newfront Productions Inc.
Address: 139 Townsend Street #101
Phone: (415)-284-5400
Fax: (415)-284-5401
Contact e-mail address: [email protected]
Web Address: http://www.newfront.com
Employees: 20 (including contract workers)
Total Funding: $2.2 million
Investors: Jesse Hansen Capital Partners


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