Chatroulette CEO turns a liability into an income stream, great move!
fastcompany.com/1716690/chatroulette-andrey-ternovskiy-video-chat
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Chatroulette Founder Andrey Ternovskiy Raises New Funding: "50,000 Naked Men"
Since peaking in usership in the spring and early summer, Chatroulette has been hemorrhaging traffic, with visits plummeting close to 60% in the US, according to Quantcast. After a brief down period in late August, the site relaunched with improved saftey features, and traffic appears to have bottomed out.
Ternovskiy now shares a one-bedroom apartment with two engineers that doubles as Chatroulette's headquarters. They all sleep and work there--that's why he's whispering and slipping outside to answer his phone.
The million-dollar offers have dried up, and critics have labeled the service a passing craze. Others have blamed the site's decline on its pornographic content--it's estimated one in every eight chats yielded R-rated material.
Ternovskiy still believes he can reclaim Chatroulette's prominence and VC interest. To do so, he's worked tirelessly to sanitize its image. "Since we've implemented the content-control system, the site has become cleaner, and more people are starting to use it," the founder tells Fast Company--traffic did begin to rise in October and November. "Now it's my job to shape the business into something more sustainable."
But Chatroulette can't fully ween itself off nudity yet. "You'll still see some naked men, about one every hour," Ternovskiy says. Of the roughly 500,000 visitors Chatroulette receives daily, about 10% are males itching to show their business. So Ternovskiy parlays that business into profit.
"Everyday, about 50,000 new men are trying to get naked," he says. "What we're doing is selling the naked men to a couple of websites--it's an investment for us."
When users flag someone enough times for indecent behavior (by clicking a button), the offender is automatically transferred to a partner site. Thanks to deals with adult dating services like FriendFinder.com, Chatroulette is earning cash hand over fist from the referral traffic.
"Basically, once we detect a person is naked, he'll be kicked from our service to another website," Ternovskiy says. "So, we're actually getting revenue from naked men right now."
These exhibitionists were a major headache for Ternovskiy before becoming a major source of income. Though helping to create buzz on the site initially (for better or worse), they were also a bandwidth drain, often nexting through as many as 800 users in just 15 minutes. According to Ternovskiy, Chatroulette is now earning $100,000 per month due to its refined business model and content-control system--all from "naked men." That's triple the site's monthly "mainstream" or "normal" revenue, as Ternovskiy refers to it.
It's also Ternovskiy's answer to whether he'd finally accepted outside investments. "50,000 naked men" has become "our investment," he says.
"I just didn't want to take investments--I feared that if I did the deals, my ideas would get pushed away. There are still offers, but they're valued proportionally less than offers back then, in terms of our traffic. So I think at this point, it's better for me to go on by myself."