They have a very smart business model that we’ve seen several times recently:
People launch a site using an Open Source platform such as Joomla and then move to a custom site later on. Using Joomla allows them to test the viability of their idea at a very low cost.
- If things work out well, they can build a userbase, understand what the users need and start to bring in advertisers. When they’ve proven that their idea is viable, they’re able to attract more money and move to a highly-customized website built with Ruby on Rails or similar platforms.
- If the idea doesn’t work, they’ve spent a fraction of what traditional startups do.
Bleacher Report worked this business plan very successfully. On the same day they announced that not only was their new Ruby site out of beta, but they’ve attracted Venture Capital funding. Congratulations to all involved!