Are you fanatical about Footballers’ Wives? Are you dying to comment on the latest episode of Hell’s Kitchen?
If so, BuddyTV, an interactive website targeted at die-hard TV devotees, might be the answer to your small-screen prayers. The site offers news on a range of television shows, as well as forums where fans can “chat” to each other to discuss their favourite programmes.
“The purpose of the site is to build communities around popular TV shows,” says Andy Liu, one of BuddyTV’s founders, who earned his MBA at the Wharton School at the University of Pennsylvania. “It’s meant for people who are passionate about television.”
Although BuddyTV – which was started two years ago by Mr Liu and his partner, David Niu, also a Wharton MBA – has yet to turn a profit, its outlook is promising. During the normal TV season, September to May, the site averages 3m unique users a month, with more than 10m page views.
Recently, the Seattle-based company took in nearly $3min funding in a round led by Gemstar-TV Guide International, a serious player in the television industry. The investment by Gemstar, best known in the US for its TV Guide publication, has captured attention in the media industry.
It would not be the first time the two entrepreneurs had success in the start-up world. Mr Liu and Mr Niu – who met in the spring of 1999 at a “welcome weekend” at Wharton for admitted students – started their first company while at business school. The company, NetConversions, which provides technology that helps websites increase their sales, was based on the research of Peter Fader, one of their former business school professors. It was sold in February 2004 for $7m.
After the sale, they stayed with the acquiring company for 18 months to ensure a smooth transition, before taking a step back from the start-up scene for a while. “We had some liquidity so we decided to take some time off,” says Mr Liu, 31.
They went to Peru to visit friends and over beers in Machu Pichu considered ideas for a new venture. “We had a couple of conversations about convergence between television and online, but we didn’t have a clear idea exactly where we were
going to go,” recalls Mr Liu, who is the company’s publisher. “What we did know is that
young people don’t watch TV passively anymore. They’re on the phone . . . instant messaging with their friends, or on the internet. There’s a big shift that’s happening and we wanted to be part of it.”
They returned to Seattle and started working on their idea. They used some of the proceeds from the NetConversions sale as start-up capital and raised $1m from investors. The two built a team using contacts from their previous company, as well as a couple of new recruits.
Both Mr Niu and Mr Liu credit their years at Wharton for teaching them the fundamentals of how to start and sustain a successful company. Perhaps more importantly, says Mr Liu, Wharton instilled in them how to make business contacts and use them to their advantage. “What I take away from Wharton is the importance of networking and connections,” says Mr Liu.
Mr Niu, 33, the company’s editor-in-chief, seconds that. Indeed, his advice for today’s Wharton students as well as other budding entrepreneurs populating today’s MBA programmes is this: “Keep an eye on the people you like or think are talented,” he says. “You never know where your paths might cross.”
Of the classes he took, one that still stands out is Negotiations, which he says was one of the “most fun, useful, can’t miss classes”.
“I learned the philosophy and strategies behind different types of negotiations and learned more about my style and how to adapt it.
“At the end of the day, almost everything is negotiable, especially for entrepreneurs.”
Mr Niu says the fact that this was not their “first rodeo” was critical to their first phase of development. “We could plug and play from our last experience,” he says. “We knew who we wanted for legal representation, for accounting and for payroll. We had a network that allowed us to eliminate a lot of that due diligence grunt work you have to do in the early stages of starting a company.”
They launched in October 2005, and today the site employs 12 editorial staff writers, five technical staff members and a team of four who handle sales and marketing. It is a small office and the two admit that they have their moments. “We both have sharp elbows and sharp tongues, but over the past five years we have a pretty good dynamic going,” says Mr Niu.
The goal of BuddyTV is to “bring entertainment and content closer to fans” by providing original news, spoilers and interviews on a range of television programmes – from reality TV talent shows such as American Idol to old standbys such as
The site also provides numerous forums where fans worldwide can gossip, chat and connect with other fans about their beloved shows. The company is also developing technology so users eventually will be able to turn on BuddyTV commentary on their televisions – rather than their laptops – during shows.
The entrepreneurs say their target audience is anyone who enjoys watching television, but the average user is about 15 to 34 years old. “The average person watches two to four hours of TV per day, but some of our users are off the charts,” says Mr Niu.
He accepts that the rise of reality TV has helped make BuddyTV a success, as viewers love to speculate about who will be the next one booted from Pop Idol. “But BuddyTV’s success isn’t predicated on the success of reality television. As long as people have the urge to know [more] beyond what’s on their screen, BuddyTV will [prosper].”
The site, which is not profitable, makes money on advertising. The men are focusing on growth and are not currently seeking more investment. Nor are they planning an initial public offering in the near future.
“One of the things we took away from our first company is that we should try to build a sustainable, highly profitable company,” says Mr Liu. “That’s when good things happen.”