Brandon Paton

I can’t believe it’s been over a year since I founded Impact Eleven. At its inception, I honestly believed that ImpactEleven would be my first real success. A year later, I can comfortably call it a failure.

Impact Eleven was born during January 09′ while I was lying in bed. With the TV on, I was slowly drifting into sleep. For the better part of an hour I was fighting to stay awake to make it to the end of the show. On that January night, while half asleep, I had my first “Ah-hah!” moment.

You may have experienced something similar. While on the phone, taking a shower, or cooking dinner, a light bulb flashes above your head…

I Suddenly Envisioned the Next Big Thing!

For the following week, I did nothing but think about the idea. I damn well thought that this idea could be the next million-dollar, industry-changing company. But money wasn’t my main motivation. My excitement was fueled by the prospect of entrepreneurial success.

Impact Eleven was supposed to revolutionize advertising on YouTube. My vision for the business was to connect major advertisers with YouTube publishers, providing publishers an alternative to the YouTube Partner Program (which overlays ads on popular videos and gives a [low] percentage cut to whoever uploaded the video). Impact Eleven’s main advantage over the YouTube Partner Program would be that there would be no minimum channel popularity pre-requisite, and that the average revenue per 1000 views would be much higher than the Partner Program currently delivered.

The business model I envisioned for Impact Eleven relied on short pre-roll video advertisements that publishers would manually insert at the beginning of their videos before they uploaded them. An example of a 15 second pre-roll is embedded to the right.

The YouTube publishers would download the 5-20 second pre-roll video ad and insert them at the beginning of their videos that they upload. Advertisers would sign contracts with Impact Eleven agreeing to pay $xx CPM for the first 15 days, with an initial X number of target video views. We would attempt to match their target impression count by predicting the amount of views each of our publishers usually delivered. The advertiser would agree on a CPM for the first 15 days, a lower CPM for the following 3 months, and an even lower CPM for the following 6 months, since there is no way to remove the ad once it is attached to a video without removing the video altogether.

Finding Our First Customers

As a naive, inexperienced junior in high school, I went directly for the big fish. I thought the best way to find my first customers was to get some popular YouTube publishers to agree to include a pre-roll ad in their video. From there, I suspected I would be able to approach companies and offer them a couple million video ad impressions on popular YouTube videos. This, unfortunately, did not work as well as I thought it would.

I did, however, make some relatively impressive progress. After sending an email to many of the most popular YouTube users, I was getting replies from users like Fred, SMP Films, Dave Days, Household Hacker, and Kevjumba. I didn’t hear back from the majority of users I emailed, including Chris Pirillo of lockergnome. To the left is a screenshot of him reading the email I sent him, taken off his live video feed (haha…). Despite me being ignored by Chris Pirillo, I remained encouraged when Dave Days subscribed to Impact Eleven’s YouTube account (our one and only subscriber!).

In February of 09′, I scheduled my first sales call with Household Hacker, whose videos had received millions of views on YouTube. Dialing their number made me extremely nervous. Luckily, my nerves died down once I started talking. While on the phone with the two guys behind Household Hacker, we talked about the current state of the YouTube Partner Program and whether Household Hacker would be interested in a deal with Impact Eleven. To my advantage, the conversation turned into them giving me their input on the concept of Impact Eleven, since they knew it was a new “startup.” My conversation with them gave me a better understanding of the YouTube advertising ecosystem.

Inexperience, Naivety, and Blind Passion

In my conversation with Household Hacker, I realized the following:

• Advertisers would not want to be associated with sandy balls or Chris Crocker
• YouTube could easily put us out of business at any time
• The video quality of the ad depends on the individual publisher’s editing & uploading know-how
• There’s no way to remove or add a pre-roll ad after the video is already on YouTube
• Lack of a reliable method of measuring view views, aside from YouTube’s view counter

If I wasn’t so naive, I probably wouldn’t have spent the $10 to registered ImpactEleven.com. My inexperience led me to spend many hours working on Impact Eleven, which never financially paid off. Do I regret the time spent? Of course not! It was a fun experience, and it has taught me things that I will remember the next time I have another “Ah-hah!” moment.

Failure is something that I appreciate. The only time that failure becomes dangerous is at the point that you decide failure is not an option. Failure is always an option. Keeping this in perspective can be motivating, and can help prevent one from becoming too heavily vested in a business that has shown significant signs of weakness.

After a couple months, I realized that I did not have the pieces in place to make ImpactEleven a success. Developing the idea taught me a hell of a lot about business, and for that, I was successful.

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