How TNE led to Enthusiast Gaming and what the future holds (hopefully)

Discussion in 'Community Hang-Out' started by Menashe, Jul 23, 2017.

  1. Menashe

    Menashe Moderator Staff Member Moderator

    If I had to write the story out in full, it would be book-sized and too daunting. But I want to get everyone caught up on how things have evolved/progressed/regressed over the past three years. So, I'm doing a super Cliff's Notes version:

    2011 - 2014

    We launched TNE in September 2011. It was meant to be a chilled-out place for the community to bond and anyone who wanted to write on the front page of the site to do so. The quality of the writers coming organically from the community turned heads because it was often better than the 'journalists' at IGN and Gamespot. (I'm talking about EvilTw1n, juegosmajicos, and the rest of the gang. All brilliant folks.)

    We put up some Google ads to help pay the bills of the server and pay a bit to those writing regularly. Every year we more than doubled our traffic and it was clear we were building a strong readership/audience that trusted our views in the world of Nintendo media. However, the millions of pageviews were only translating to a few hundred dollars monthly in ad revenue. Not enough to invest much back into the site. None of the writers would ever be able to do this as a full time or even part time job. All it could be was a side hobby to make a few bucks to buy games or use as discretionary money. Clearly, something was wrong with the ad industry if you could have millions of readers and only earn a few hundred bucks, while Facebook and Google were raking it in from ads.

    2014 - 2015

    I moved back from Israel to Toronto, where my expenses for a wife and three kids shot up from $2k a month to $10k a month due to Toronto having insanely high rent, cars/gas/insurance, food costs, tuition, etc. (Jerusalem had a very low cost of living. But all my family and my wife's family live in Toronto, which is why we moved back to our hometown.)

    Because of that, I had to focus immediately on finding a way to pay my bills. I spoke to many other gaming site owners and it was clear that there was no lucrative gaming ad network to service the gaming sites. Throughout 2014 I tried out the two gaming networks that did exist, Playwire/Intergi and Crave, and they both performed as poorly as the other site owners suggested. I realized that wouldn't pay the bills. My business goal was to start a new ad network that would have enough sites/blogs/forums in it to approach really large advertisers and earn enough for the owners to pay their bills. In the meantime, I worked on paying the bills through running small local gaming events, which I would host in local pubs (Madison Avenue Pub, Fox and Fiddle) hotels (Holiday Inn Yorkdale, Marriot), and universities (York University, George Brown College). I scraped by but barely paid my bills.

    I stepped back from day to day content creation on TNE, which had been my focus for three years, and let a few enthusiastic news, article, and video contributors run the front page, while Mattavelle and Juegos kept doing what they had always done and enjoyed with the community in the forums. Unfortunately, I needed to focus 100% of my efforts on making a living within the gaming industry. If I couldn't figure it out fast enough, I would need to go out and get a teaching job, like I had for 8 years in Israel. (And I really wanted a change of direction in my life from that. I wanted to be an entrepreneur, not a teacher.)

    2015 - 2016

    The local events kept on growing and eventually, we tried to make a mini-convention, focused around tournaments. It ended up drawing in 1700 attendees and attracted a lot of attention from local investors and corporations. Take a look at the recap:



    The success of that mini-event helped us ink a deal to make an even larger convention 12 months later, with additional funding and marketing by a massive media corporation in Canada, Metroland Media, who became our partner in the event. That deal gave us some legitimacy and traction as a startup and helped me attract our first small round of investments, the friends and family round. I was able to draw a tiny salary from that, which helped me pay a few bills, but I was still behind every month and had a LOT of debt. We lived month to month, not knowing if we would survive to the next paycheque. I thank my wife for giving me so much leeway and letting me still pursue my dreams. There were definitely tough times, financially, throughout those years.

    However, what was to become the bigger piece of Enthusiast Gaming was beginning to coalesce: the gaming network of sites. I had spoken to a lot of site owners who also described hitting a standstill with their sites because they couldn't generate enough ad revenue to reinvest in their sites and grow them larger and hire a staff. I convinced a few of them to take a chance with us and let us try creating a gaming ad network in early 2016, trusting us to represent them with integrity and have their backs. Around five of them agreed to sign a year long contract with us in January 2016.

    Meanwhile, Nintendo Enthusiast and the other sites were not growing. They were, at most, holding status quo but no longer doubling in size each year. There was nothing I could really do at the time without more resources financially. We just needed to succeed at everything else we were doing if there was ever a hope at growing TNE with financial backing.

    2016-2017

    This was a year of huge growth but also huge pain and anxiety.

    After contracts were signed in the beginning of 2016 with other sites that we would now represent, we launched the network in April and were off to the races. We were suddenly a company earning tens of thousands in revenue monthly but also had lots of expenses. We had no clue how to monetize well at the beginning, causing us to bleed more expenses than the revenue we were earning. 50 million ad impressions were being served through our network monthly and we had no idea how to monetize them well. This was our first experience being an ad network. We had to find a way to float ourselves and the bleeding cash while we figured it all out. Thankfully, investors liked the fact that a lot of top-line revenue was coming through, which promised potential for the future if we could figure out our margins and scale larger. Also, EGLX came at the perfect time. This was the evolution of the event we had done the year before. But this time it was done right. We had big sponsors, lots of exhibitors, and 12,000 attendees. You can see the recap here:



    The event's success + the growing ad network = more investment.

    Our seed round of funding was the hardest thing I've ever pulled off. There's so much risk in the company at that stage that the terms of the investment are rarely favorable and it takes months of hemming and hawing to get a potential investor to write a cheque. If we would have raised the entire amount of our seed round right at the beginning of the year, I would have been able to relax and focus on just running the business without anxiety. Instead, we had a 'rolling close', which means investors one by one join your seed round throughout the year when they finally decide to say yes. We began our seed round in February and didn't finish it until a year later. Many times we thought we'd run out of cash and then a new cheque would come in and we could keep the lights on a few more weeks. I was constantly out pitching the story and trying to reel in more investors. I was living in a state of anxiety. It was a very tough market out there. For months at a time, I'd toss and turn in bed, thinking the next day might be the last for Enthusiast Gaming. I'd break out in a sweat at 3 am and feel like throwing up. I didn't want to let down all the investors who had already trusted us with their money, the full-time staff who were working round the clock as part of my team, or the community who believed in us.

    On the other hand, the actual company was growing with a lot of promising potentials. We had a great event which had the potential to turn into a PAX-sized event one day. And every month, more gaming sites joined the network and would help our revenue grow higher. And best of all, we were slowly but surely figuring out the monetization game. Our ads were starting to earn more money each month. We were slowly improving, month at a time. We could pay the site owners and ourselves a little more. And we were forced to learn how to operate very lean, cutting costs wherever we could.

    Somehow we survived the year. Cash flow was our biggest enemy. Time was our biggest commodity. With time, we grew. More sites in the network. More revenue. More experience and insight into how to turn our little start-up into a healthy business. We just needed to find a way to buy ourselves more time, and cash flow was needed to make that happen.

    2017 -

    2016 was over. The network had launched in April 2016 with five sites, and now a year later, we had 50+ sites and were reaching over 50 million unique gamers a month. Our insight into how to improve ad monetization was growing by leaps and bounds. By May, our revenue started to do the 'hockey stick' growth trajectory.

    In June, we earned pretty much the entire amount we earned in 2016. We had 60 sites in the network and were reaching 80-90 million uniques a month. We were finally profitable!

    Our monetization had come a very very long way. We felt confident that we could generate more revenue for a gaming site than any other network out there and offer them a better rev-share split. We had a sales team of seven people, with representatives on West Coast USA, East Coast USA, Canada, and UK. Larger sites were beginning to trust us based on word of mouth and referrals.

    So much had changed in just the first 6 months of the year. We had a healthy stable business as opposed to a risky startup still struggling to figure itself out. And because of that, we were able to grow and scale much more rapidly.

    Investors started getting excited too. They bought into our thinking regarding acquiring strategic gaming sites. They helped us to buy OnlySP.com in January and Destructoid.com in June. Now we have three more acquisitions in the works and hopefully, will add a lot of other amazing sites into the network throughout the next year or two.

    As the potential growth is becoming clear to investors, we hope to scale rapidly with their assistance. There will still be a lot of ups and downs, like in any business, but I'm happy that through the persistence of the team, we at least made it this far and I think we have a bright future.

    HOWEVER:

    I didn't mention Nintendo Enthusiast in the summary of 2016 or 2017. Why? I'll get back to that now. The bottom line is, not only did the Enthusiast sites not grow, they declined majorly. Traffic sucked. The news and articles became more vanilla, less vanilla-chocolate swirl with sprinkles. More like a blog that could be found anywhere, nothing unique. Readers didn't appreciate that. And then we tried making the move to enthusiast.gg mid-2016, but it was still a beta product and unfinished. We didn't have enough funding throughout 2016 to keep on developing it at a fast enough rate. So, traffic on the Enthusiast sites took a nose dive. Right now, they are on the mend a bit. Rising again for the first time since 2015. But it's not enough.

    But we finally have the resources to invest a bit back into the site, even if it isn't a top priority for investors and the business side of the company. But it's a priority for me because it's my baby. We know how to monetize really well now, so if we had the same kind of traffic we once had, we would easily be able to pay the staff enough to make this a part time job for a few of them. (Or full-time job if you live a life with low expenses or live in a less expensive economy.)

    So, here's my plan for second half of 2017:

    I'm giving the site's front page back to the community. I'm letting Alex B (juegosmajicos) lead the site, come up with its content strategy, and hire staff. He would like to keep on some of the existing writers but guide them better, and he'd like to figure out who in the community wants to write as a part of his team, whether frequently or infrequently. Initially, I'm going to give him a set a budget which he can deploy at his discretion, and then when the site's ad revenue exceeds that because of rising traffic, he can use the revenue towards the staff and site as well.

    I trust him and I think he'll help TNE get back to its former glory. Maybe more, maybe less. We'll see what the future holds.
    • R.A.P. R.A.P. x 10
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    Last edited: Jul 23, 2017
  2. mattavelle1

    mattavelle1 ARMS is like breathing.......but more important Staff Member Moderator

    This is a great recap Menashe and thank you for providing it for everyone.

    Also I greatly appreciate you choosing to put Jueg at the head of the front site. It's funny that your post starts with you guys in it, and ends with one of those guys getting the shot as the head of the front page.

    Jueg is a huge bridge and with your backing I will do everything in my power to help him with anything he needs. And hopefully the community here at TNE will aswell.

    It's been a long time coming. I'm personally very excited for this next chapter and seeing where we can go from here. @Juegos anything you need you just ask and I will be here to do whatever it is I can moving forward. Congratulations your ready for this!:mthumb:
    • R.A.P. R.A.P. x 6
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  3. Koenig

    Koenig The Architect

    Looking forward to what the future holds for TNE. Here's hoping for the best.
    • R.A.P. R.A.P. x 3
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  4. theMightyME

    theMightyME Owner of The Total Screen

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  5. Goodtwin

    Goodtwin Well-Known Member

    This is excellent. I think a lot of us here are passionate supporters of this community and want to see the site/community flourish. The better the front page does the more people we will see contribute in the forums, and the more people we have contributing in the forums the more likely it is for front page material to materialize from the discussion. There is a lot of good discussions here in the forums, but not everybody can take that and turn it into front page material. Then there are those who can, and with Jueg in the driver seat, I think the talent here can get reengaged with creating content.

    This comes at a perfect time. With Switch doing so well, and Splatoon 2 giving the community a huge boost of enthusiasm, I really think things can get going again.
    • R.A.P. R.A.P. x 4
  6. Karkashan

    Karkashan Well-Known Member

    Good to see you're doing well.

    ~glorybetogrima
    • Like Like x 3
  7. Majorbuddah

    Majorbuddah My real name is Dolemite

    I'd like to take this opportunity to announce that Doritos Enthusiast will be launching full steam ahead in Q4 with the full cooperation of Nike, Oprah, and Def Jam Records.

    FOR THE BOLD.
    • LOL LOL x 5
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  8. Juegos

    Juegos All mods go to heaven. Staff Member Moderator

    Are you looking for writers?? $$$
    • LOL LOL x 2
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  9. Majorbuddah

    Majorbuddah My real name is Dolemite

    Yeah, just have your people reach out to my people and we'll make this work.
    • LOL LOL x 3
  10. Superfakerbros

    Superfakerbros ECE 2018 Staff Member Moderator

    Well it's good to hear that things are starting to look up again for Enthusiast Gaming and, hopefully, it'll only get better
    • Like Like x 2
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  11. Odo

    Odo Well-Known Member

    That's great news.

    I'm happy to see the company taking off. I didn't come from IGN and as a guy who just found TNE on Twitter back then I can say that the aspect that most brought my attention to TNE is passion. I could see a smaller but passionate community both here in the boards and on the main site.

    I'm no writer (I used to write some stuff in some personal blogs back in the day, but I'm no writer), so I'm afraid I can't help the content department. If Enthusiast Co need an IT guy, though, let me know. I've got experience in web development.

    I wish the best. It's a great time to be a gamer and I'm sure a great time for Enthusiast Co.
    • Like Like x 1
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  12. BobSilencieux

    BobSilencieux Well-Known Member

    What a recap. And what a man, @Menashe. I don't know how you found the belief and the resilience to make this work... I would have literally died if I'd had to deal with so much stress and anxiety. It's nice knowing I've been here (with the occasional hiatus) from the start, watching the evolution of the idea, from the IGN Wii lobby to here to who knows where in the future. GG's.
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  13. sjmartin79

    sjmartin79 White Phoenix of the Crown

    Congrats on your success and that all your hard work and sacrifice are paying off!
    • R.A.P. R.A.P. x 1
  14. simplyTravis

    simplyTravis "A nice guy, but looks like a f'n Jedi!"

    This is all great to hear! I know I had the wind knocked out of my sails with the Enthusiast.gg project but am glad TNE will get to live on. I'm game for helping out by writing once a week (editorial, review, etc...) , and maybe even doing a podcast monthly. I don't know if I can offer more than that with my other jobs once they get in full swing.

    On the community side we're running the Tuesday Night TNE's as a way to get some actual gaming nights on the calendar with everyone and it seems to be growing. @Juegos has been awesome helping get the word out and it has been a real blast. I also think the Discord voice/chatroom integration will be a big help to TNE in the long run. It also helps solve a problem Nintendo created.

    I look forward to finishing out 2017 strong with TNE and maybe shaking things up in 2018. VIVA LA TNE!
    • R.A.P. R.A.P. x 1
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