How One Company Squandered Over $250MM Per Month in Recurring Revenue

The days have past and to most it seems like no big deal or “something they expected.” For me I am still feeling somber and it’s because what was “potentially the greatest social media platform ever created–for real connection moments” is gone.

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That’s right… Blab is dead and in their effort to pursue the true dream and vision that creators Shaan Puri and team of hackers stated:

Blab could have pivoted into being the best webinar tool ever. Or a niche live streaming tool for Facebook. Or stayed small. But that wasn’t the bargain I struck with my team.

For us, we would rather fail trying to achieve our mission, than succeed at someone else’s mission.

In their recent “Full Story” Blab Is Dead post. The sad part remains that HUGE OPPORTUNITIES were lost! Instead of being successful at the work that Blab had done already they decided to scrap it all and go back towards the original goal of an app for millennials. I personally see this lesson learned over and over again on Shark Tank and it surprises me that a website with over 334,000,000 users would turn around and walk away. Mr. Wonderful would be screaming at them “take the money you crazy chickens.”

What did Blab Do?

Shut it all down to chase the millennials and the gen z “popular crowd” attention in hopes that the second try at an app for them will work. After School (a teens and tweens app recently featured on CNBC’s Follow The Leader) is poised to eat Blab’s lunch in that category and FB Live is taking what little attention remains for millennials after considering the amount of time both generations are already spending on YouTube, Instagram or SnapChat.

In my mind Blab made a huge mistake by not monetizing what they had in place. The existing platform social media marketers and millions of others have grown to love could have self funded the company’s desire to pursue the dream of getting millennial and younger attention with an app. Let’s not forget that Bebo the original Blab app was shut down and re-released back in April of 2016 which is when we first started to catch wind of the whispers that Blab will soon be dead.

The News Breaks Blab Is Dying

Joel Comm first broke the news to me and several other members of his tribe during a live show not to long after Social Media Summit 2016 had passed. My thoughts are fairly straight forward and I want you to see just how easy Blab could have monetized what is already done and in place working for them, instead of shutting it down to have a 3rd attempt at making something the market does not need or seem to want from them.

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I have said it before… Blab needed to embrace what they had become, even though they missed the target they had envisioned the opportunity to make millions every month at the flip of a switch was right there waiting and the market would have paid. I truly believe that Blab will never be successful at developing a “video broadcast multi-screen hangout environment” as an app that millennials and gen z users will want to adopt and embrace at any level of significance in the market place as the Blab I loved had done.

Since we can’t change what Blab did to kill Blab, we can discuss how much money they potentially left on the table for the rest of Q4 had they chose to follow my advice (which I share here). For now let’s talk numbers!

Blab Reports 334,000,000 users

Blab reported having 334,000,000 users. I would venture to say that 1% of those users were broadcasters that enjoyed broadcasting the shows that they started on Blab and would have paid somewhere to the tune of $49 – $79 per month to remain a Blab member that has the ability to Broadcast on Blab, Join Blab’s that are live as a guest, comment on Blab’s, watch replays, save past episodes on Blab channel wall and share via social. Also the Host Level accounts for that price may have easily sold 2% but we will just say they have 334,000,000 users and let’s pretend Blab adopts the Good, Better, Best (GBB) Model and our Host Membership is $79 a month and 1% of the users bought it for the first 30 days.

Blab Host Level (Best) – $79 x 3,340,000= $263,860,000 (per month)

BEVERLY HILLS, CA - JULY 27: -- Pictured: Marcus Lemonis poses for a portrait during NBC 2013 Summer Press Tour at The Beverly Hilton Hotel on July 27, 2013 in Beverly Hills, California. (Photo by Charley Gallay/NBC/NBCU Photo Bank via Getty Images)

BEVERLY HILLS, CA – JULY 27: — Pictured: Marcus Lemonis (Photo by Charley Gallay/NBC/NBCU Photo Bank via Getty Images)

Now you might say, well how do we know people would pay that? I can speak as a Blab show host I would have happily paid $79 a month to remain a Host with all the same capabilities that already existed. I can also say Joel Comm probably would have done the same if he had the certainty that he needed to see and I know he proved there was a market for Blab to charge money for the hosting service because shortly before Blab shut it down, JC went over to Crowdcast.io ( https://www.crowdcast.io/pricing ) and wouldn’t you know they charge rates similar to what our recommended GBB model has outlined as price points the market will certainly bare.

The Better Level – Guest and Replays Level

The Best Model would have served and suited the hosts on Blab, our recommended solution to Blab’s worries was to have a better level offer that is not quite as good or inclusive as the Host level and comes with the ability to watch replays, tune in live, chat in the blabs and register for upcoming blabs, but does not allow you to host. This level would come to the market at the price point of $7 to $17 per month depending what does best in the sales figures to close out 2016. Let’s say for this example that we will assume 5% of all 334,000,000 users on Blab were receptive enough to pay $7 per month or better yet, let’s discount that even further and say the initial offering at the mid grade level is $49 per year paid annually or $7 per month paid monthly and let’s say of the 5% of buyers choosing a middle grade membership to a paid Blab platform half choose to pay $7 per month and half choose to pay $49 for the first 12 months of service.

Guest and Replays Level (Better) $49 x 8,350,000= $409,150,000

and

Guest and Replays Level (Better) $7 x 8,350,000= $58,450,000 (per month)

That just leaves our “good” offer which is no upgrade needed for Blab users that did not buy a membership to act as a host or as a guest with the ability to watch replays. The FREE level (our Good) offer allows users to tune in live but they cannot chat, they cannot watch replays and they cannot host episodes.

The beauty of this model, besides the turn key cash cow that Blab closed down and walked away from is actually it would have appealed most to the ones that felt Blab was really for them, worth keeping and certainly worth paying a little something every month for (at least for the first few months).

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FIND OUT MORE… (click here) Get a sneak peek at one of the last messages that was sent to me by the Blab team when I offered them the opportunity to adopt this model and get many of the Blab influencers on board to help make sales.

Oh and let’s not forget the cash… Projected Revenue in Gross Sales for Q4 2016:

Sept. 2016:
Blab Host Level (Best) – $79 x 3,340,000= $263,860,000 (per month)
Blab Guest Level (Better) – $7 x 8,350,000= $58,450,000 (per month)
Blab Live Member (Good) – FREE

Blab Guest Level (Better) – $49 x 8,350,000= $409,150,000 (annual lump sum)

Oct. 2016:
Blab Host Level (Best) – $79 x 3,340,000= $263,860,000 (per month)
Blab Guest Level (Better) – $7 x 8,350,000= $58,450,000 (per month)
Blab Live Member (Good) – FREE

Nov. 2016:
Blab Host Level (Best) – $79 x 3,340,000= $263,860,000 (per month)
Blab Guest Level (Better) – $7 x 8,350,000= $58,450,000 (per month)
Blab Live Member (Good) – FREE

Dec. 2016:
Blab Host Level (Best) – $79 x 3,340,000= $263,860,000 (per month)
Blab Guest Level (Better) – $7 x 8,350,000= $58,450,000 (per month)
Blab Live Member (Good) – FREE

Est. Sub Total Gross Sales: $1,055,440,000 + $233,800,000 + $409,150,000 = $1,698,390,000

Blab… You blew it!

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One Comment

  1. Tracy Wilson says:

    great article! beats me why they couldn’t see the massive opportunity sitting right in front of them. It will be interesting to see how their future plays out.

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