Posted on July 10, 2007
Filed Under Easy VC Money |
This is the first in a new Drama 2.0 Show primetime series entitled Easy VC Money. In it, I present concepts for Web 2.0 startups that VCs will absolutely love. At the end, I reveal which VC firm will be getting an email from me with the pitch. I will post any responses I get.
Prostitution is the oldest occupation in the world and the prostitution industry is a billion dollar business. The International Labor Organization, for instance, estimates that between 1993 and 1995, prostitution in Thailand alone generated between $22.5 and $27 billion.
Pimps are a crucial component of the prostitution business. They are responsible for finding and managing clients for prostitutes that they represent. It is a lucrative business and top pimps earn considerable amounts of money. However pimps will be the first to tell you that “pimpin’ ain’t easy.” Pimps face a number of challenges, including:
- Obtaining prostitutes. Prostitutes choose their pimps, so marketing oneself effectively is important to a pimp.
- Managing prostitutes. Maximizing profits requires that pimps effectively manage and track their prostitutes.
- Acquiring and managing clients.
- Dealing with other pimps. For instance, when a prostitute chooses a new pimp, there is typically an exchange of money between the new pimp and the old pimp.
Each of these challenges often requires considerable labor to deal with. There are a significant number of inefficiencies in the pimp business and there is a great opportunity for technology to reduce or eliminate these inefficiencies.
PimpSpace is a social networking platform for pimps and prostitutes. It enables pimps to:
- Post a personal profile, detailing the pimp’s services and listing the prostitutes currently residing in his stable. This allows prospective prostitutes to evaluate his services before “choosin’.”
- Interact with other pimps through social networking tools found on services like MySpace and Facebook, including PimpFeeds, which provide a news feed of updates from the pimp’s social pimp graph.
- Manage and track clients through an integrated customer relationship management application called Pimpforce.
- Keep detailed accounting records through an integrated accounting application called TurboPimp.
- Conduct transactions with other pimps for the sale and acquisition of prostitutes through an auction-style platform called PimpTrade.
- Purchase pimp-related merchandise, such as pimp clothing, jewelry and weaponry through affiliated ecommerce outlets participating in the PimpSpace marketplace entitled Mack Marketplace.
PimpSpace will make money through advertising, subscription services, transaction fees and affiliate commissions:
- Social networking: advertising supported. Pimps represent a lucrative demographic, and frequently spend money on luxury items, such as jewelry and cars.
- Pimpforce: subscription-based. A tiered pricing structure is tied to the number of clients each pimp needs to track and starts at $4.99/month for the introductory tier.
- TurboPimp: subscription-based. Planned pricing is $29.99/month.
- PimpTrade: transaction fees. PimpSpace will receive a commission of 5% on all transactions.
- Mack Marketplace: affiliate commissions.
PimpSpace’s multiple revenue streams have the potential to drive significant business. PimpSpace estimates that it will generate $1.25 million in revenues in the first year of operations and will become cashflow positive in month eight of operations. By year five, PimpSpace anticipates that it will be the go-to platform for pimps around the world to conduct their business and will generate profits of $25 million on revenues of $40 million.
PimpSpace will engage in large-scale marketing initiatives to drive awareness of its services amongst the pimp community and to explain the value proposition of PimpSpace to this target audience. The primary marketing initiatives consist of:
- Endorsement deals with pimps, former pimps and prominent celebrities within the pimp culture such as the Archbishop Don Magic Juan, Snoop Dogg and Lil John.
- Sponsorship of pimp events, such as the Pimp ‘n Ho Ball and the Players Ball.
- Recruitment of early adopter pimps who will evangelize PimpSpace on the streets.
- An affiliate program that enables pimps to earn money for recruiting other pimps.
PimpSpace believes that these marketing initiatives will enable it to rapidly gain mindshare in the pimp community. Within the first year, PimpSpace expects pimps will understand that “If you ain’t on PimpSpace, you ain’t pimpin’.”
There is little competition for PimpSpace. While some pimps, like Archbishop Don Magic Juan, have MySpace profiles, services like MySpace provide little benefit to the pimps’ actual businesses. No other service offers an integrated suite of applications for customer relationship management and accounting, for instance, that is designed to increase efficiency and profitability in the pimp game.
Challenges & Risks
PimpSpace faces two major challenges and risks:
- Prostitution, and thus pimping, is illegal in many countries, including the United States. PimpSpace avoids legal problems by being organized as an offshore corporation in a laizzes-faire island nation and hosting its servers in Panama. Monetary transactions are routed through multiple countries with flexible banking systems making it nearly impossible for the “po pos” to track the company’s activities.
- Pimps and prostitutes may be weary of using a system that could expose their criminal activities. PimpSpace is a closed, invite-only social network and thus is less easily infiltrated by law enforcement. A proprietary patent-pending activity tracker enables the company to locate and ban infiltrators. Where necessary, PimpSpace may also pay bribes or provide “services” to relevant law enforcement officials in exchange for lax enforcement of law.
PimpSpace seeks $2 million in seed funding. Proceeds will be used for product development, marketing, operations, executive salaries and
perks quality assurance.
Who I’m Pitching
The Founders Fund
Why: The Founders Fund understands social networking, being an early investor in Facebook. Additionally, that Founders Fund whiz kids Sean Parker, Ken Howery and Luke Nosek have a penchant for the playboy lifestyle. All they need now is some women, and I’m sure the pimps on PimpSpace would be glad to deliver. PimpSpace is a lifestyle investment that’s sure to deliver a happy ending, even if it doesn’t deliver an IPO.