Ask YC: Would you fund an adult themed start up?

I've by coincidence and lack of foresight become the owner of a site that has an adult component, even though that was not what we had in mind when we started out.<p>We've had contact with VCs and some very large companies that we have partnered with, and invariably the one thing that floats to the top is brand damage.<p>This is the big fear of any large player, as soon as there is even the remotest risk of that you have a problem.<p>That pretty much rules out your second and third option, leaving the first.<p>And YC being a tech oriented investor rather than a media company I figure that that would not be their cup of tea either, but in the end the best way to find out is to ask Paul Graham directly or to simply apply.<p>My guess is you'll be turned down, but that's worth very little, it's just a guess. Based on the companies that they've invested in in the past and what I know about the people behind YC.<p>The first is something that you'd have to spend quite a bit of time and money on mocking up to the point where you can show a potential investor what you're planning to do.<p>The people you'd pitch to would probably be established players in the market that are looking at expanding their offering without taking on more employees.<p>Personally, I'd rather get <i>out</i> than in to such a line of business, the website that I run with the 'adult component' has been quietly on the market for years but so far no takers.

You left out a critical fourth category: the world's oldest profession.<p>* This is LEGAL just about everywhere other than the US (including Australia and the UK).<p>* The market size is huge<p>* People will pay serious cash money, unlike online porn<p>* Far less competition and tech in the business (see myredbook, cityvibe, and erosguide for the state of the art)<p>* Given the dogfooding imperative, recruiting lonely male programmers would probably be very easy<p>I say all this only half tongue in cheek. With a little bit of technology you could become the world's biggest pimp.

I wouldn't go for funding. Porn seems like the sort of thing you can bootstrap yourself. Hell, it seems like the sort of thing that would bootstrap <i>it</i>self. It also seems like the sort of thing that doesn't need a huge amount of attention (set up a simple uploading video server, set some upload caps so you don't get spam, and check back on it once in a while), so you can do it while you work somewhere else.<p>Dang, this is starting to sound like a not bad idea.<p>(I'm with vaksel too: remember Betamax? I don't, but I've heard stories that porn didn't choose it, so it died.)

In general, this conversation has left technology and gone into philosophy and ethics and some things I think I discussed in that Sociology 110 class I took in college. That's pretty much how all conversations about adult technology go for me too, though, so I understand.<p>I'm in the adult industry, and it happens. We've approached several VC's, angels, and some other investor folks, and we get a lot of "You want to do what?" or "Did you say 'adult'?"<p>We get slapped around, yelled at, and cursed, but honestly, we run a clean business. We've never had a chargeback in our 6 months with nearly 4,000 transactions. We receive a letter of praise on amazing customer service regularly, and with the exception of an eBay sale to Brazil, we've never had a complaint.<p>No matter, there's no explaining it. Most VC's and angels run away, for they have some vision of lawsuits and chargebacks, but that aint the way it works these days. Sure, we're shunned, but honestly, its a hell of a lot of fun, and we're not doing too bad.<p>So in my opinion, bootstrap it, e-mail me, or that guy who has unlimited risk allowance, and run with it. But be prepared for the fury of porn customers who will try to pretend they don't even know what exactly porn is.

You're going to face a lot of problems, mostly cultural ones.<p>Porn sites are like the "your parents have sex" realization in Internet business terms. We all know it's there and it happens, but we like to put our fingers in our ears over it. Even though most of us here are surely regular purveyors of pornography, not many people of a certain class/culture or over a certain age want to admit it or acknowledge they like porn. This love/hate relationship makes it easy to get traffic but hard to succeed (whether financially or to just get funding).

the answer is no.<p>p.s. "lack of innovation in this space"...I'm pretty sure it's the other way around. From what I understand porn has been driving innovation for a lot of things

I used to work at a content publisher with an adult focus that took in a significant amount of VC money from credible investors. It's true that many VCs will shy away from adult but not for the reasons you might think.<p>Whether or not YC will back your "hack" should be secondary to whether or not you can create a credible business. Youporn was a "hack" created by 2 guys and is now despised by the rest of the industry and is largey credited as letting pandora out of the box. They're also not rolling in cash. If you have a solution to "solve" the current situation adult publishers face then you've got something of real value.<p>The adult industry is in an awful state due to the rise of free sites and talent brain drain over the years. That makes for a perfect environment for companies to try and innovate in this sector and do what Apple did for music - but you've got to understand the business before you try to fix it. And being a consumer of the product is a lot different than creating a business out of it.

This doesn't answer the question about YC, but adult web startup Zivity started with real Silicon Valley VCs behind them. It looks like that relationship didn't last though.<p><a href="http://www.dailyfinance.com/story/company-news/amicable-split-for-zivity-and-vc-investors/19109225/" rel="nofollow">http://www.dailyfinance.com/story/company-news/amicable-spli...</a><p><a href="http://techcrunch.com/2009/07/23/zivity-splits-employees-execs-venture-funding-into-two-companies/" rel="nofollow">http://techcrunch.com/2009/07/23/zivity-splits-employees-exe...</a>

I have also thought about this as well as many other people I guess: A porn site or Netflix-like company but run by techie people, not industry insiders, a Google-like no-nonsense approach if you will. Apart from the investor killer aspect (as well as the social stigma: e.g. how many women can accept that their fiancee/husband are the owner of a porn startup) that most people point out there are other problems: 1. Customers are indiscriminate: There are many well photographed sites but how many of your prospective customers are willing to shell out monthly fees when bad quality content also "does the trick". 2. Service providers may be jumpy. You might have difficulty using some of the channels that are common to early startups, e.g. Amazon's S3 once prohibited "obscene" content; they now have:<p>11.6.3. ensuring that any materials posted on your site or within your Application are not illegal and do not promote illegal activities, including without limitation any activities that might be libelous or defamatory or otherwise malicious, illegal or harmful to any person or entity, or discriminatory based on race, sex, religion, nationality, disability, sexual orientation, or age;<p>What if someone at Amazon decides that some of your content falls into this category and yanks it off. Remember how quickly Apple booted off iPhone apps with such content.<p>I think the best way to go about this is: (1) Go after a niche area to reduce the huge amount of competition, e.g. "porn for women" and (2) partner with a content provider so you don't get into the intricacies of producing content. I thought the Fyre Box (<a href="http://www.usatoday.com/tech/products/services/2008-01-10-porn-set-top-box_N.htm" rel="nofollow">http://www.usatoday.com/tech/products/services/2008-01-10-po...</a> had an excellent idea (streaming movies with detailed search functionality) but they have disappeared.

I doubt YC would fund an adult site, but who knows?<p>I'm not categorically against it though. For one thing, porn is a proven money maker, and as evidenced here at least some of your potential competition won't touch it.<p>Regarding the 3 styles, I think #3 (hardcore) is the only one that would work as a startup. To be blunt, the less hardcore the porn the prettier the models have to be, and you can't afford Maxim or Playboy tier models.

The investors I've heard speak on the subject have pointed out the unlikelihood of an exit, though that has very recently (as in the last five years) begun to change, though very slowly. Since VCs and angels in the valley need an exit to make money, they don't invest in porn. Given that we can count the number of really good exits for porn companies on one hand, and have fingers left over, I think it'll be a while before current tech investors start falling over themselves to get in on the trend.<p>I don't think ethics, brand damage, or any other factor would keep investors out of the field if they thought they'd make a lot of money on a porn investment. Thus, I think investors still doubt the ability of most porn companies to have an exit. It doesn't mean porn companies aren't or won't make money, possibly even a lot of money, just that they probably won't do it in a way that leads to the investors making a lot of money.

This question has come up before, and IIRC the answer was "no, because VCs don't want to touch porn sites".

The adult industry seems pretty good, anywhere you have people acting economically irrational is an opportunity to make money.

Hey smakz, I'd be interested in getting in touch with you (see email in profile). I might have some things you'd be interested in.

No

No, I wouldn't. I believe that peddling pornography is the same as peddling drugs -- both are addictive, dangerous substances that do great harm to families. No matter how much easy money is in it (and there's a lot), I would keep my name and any money I had as far away from it as possible.