9thXchange.com

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John Bonaccorso, founder of 9thX.com, discusses the different financing options they considered when founding the business. They chose to pursue financing from friends and family, one of the hardest things he had ever done.

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Filed under: 9thXchange.com | Ann Arbor, MI | Financing Innovation | John Bonaccorso

John Bonaccorso, founder of 9thX.com, has a long history raising money for ventures. Twelve years ago he raised $1 MM from Apple computer, and in 2000, he raised $4 MM in venture capital financing for another entity. However, for 9thX.com, he and his partners decided to go the friends and family route. He put up his house and asked his family members if they had any extra cash to invest, one of the hardest things he has ever done. He offers the following observations:

• As mentioned by Charlie Penner of SBTDC in a previous segment, you must put your own money in the business, so others will take you seriously.
• The main value in attending meetings of angel investor groups is to make contact with individual angels who might invest. The groups themselves do so much more rarely.

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Content producers do not produce their material without cost. The 9thX.com platform allows small, niche content producers to market and sell their material to support further production.

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Filed under: 9thXchange.com | Ann Arbor, MI | John Bonaccorso | Network Businesses

John Bonaccorso, founder of 9thX.com makes a good point: Content on the Internet is not produced for free. However, small scale producers not producing entertainment such as music have had a hard time selling their content because  there has not been a venue for them to do so. 9thX.com has targeted this market as follows:

• It specifically targets niche educational material such as golf how-to's, motivational speakers, teachers, and others.
• The system does not require tech savvy for someone to use it effectively to market.
• Digital rights management, a system to prevent unlicensed copying, is built in. The DRM system is also flexible enough to accommodate a number of potential business scenarios.

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9thX.com kicks off our Network Businesses series. Its technology allows digital content creators and distributors to create their own shops for buying and reselling that content. 9thX.com makes its money by taking a 5% cut each time digital content is sold through its system.

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Filed under: 9thXchange.com | Ann Arbor, MI | Digital Distribution | John Bonaccorso | Network Businesses | New Enterprise Forum

9thX.com kicks off our Network Businesses series. For our purposes, Network Businesses are those that exploit unique features of the Internet in their business model. Often these businesses have a unique information asset that they are able to charge for. Further, they then exploit the network to make that asset even more valuable. This model lies at the heart of major upheaval in many industries.

As explained by John Bonaccorso, 9thX.com's CEO, the 9thX.com allows people to buy and sell digital media. They are an "end-to-end" solution that allows content producers and distributors to sell their content and receive royalty payments each time the content is resold. Some highlights from this conversation:

• 9thX.com allows content producers to be paid directly for their work. Most niche content producers have too small a market for an advertising revenue model to work.
• 9thX.com spends no money on marketing. All marketing is done by word of mouth through the web site and distributors.
• 9thX.com makes its money by controlling the digital rights management system that makes royalty-based payments possible. Each time an asset is purchased or resold, 9thX.com gets 5%.
• 9thX.com's computing infrastructure is supplied by Amazon's EC2 and S3 services.