Spark Capital Puts $5 Mil into 5min
“How-to” is one of the hottest sub-genres in Internet video, with several startups such as Austin, TX-based Expert Village, Barcelona’s Sclipo, and Los Angeles-based Videojug springing up specifically to serve the do-it-yourself crowd. But when the guys at Boston’s Spark Capital decided to invest in a how-to video company, they wound up going all the way to Israel to find what they wanted.
“We liked the how-to video space for two reasons,” says Alex Finkelstein, a principal at Spark. “One is that we like the online video space overall. The other is that we think how-to videos will get the highest advertising rates, because they draw a super-well-defined demographic. Someone who is watching a video to learn to tie a fly-fishing lure is obviously really into fly fishing, and is probably on the verge of a purchasing decision, so it’s like the niche-magazine rack on steroids.”
But within that space, says Finkelstein, Spark was looking for something special—the right combination of technology and content. That’s what led them to 5min, a seven-man startup operating out of what Finkelstein calls “almost literally a broom closet—a tiny one room office” in Tel Aviv. From that room, the company has developed not only a full portal with tens of thousands of videos, but also a customized video player, unique among the how-to sites, that allows viewers to pause and zoom in on the action.
“We liked 5min for a few reasons,” says Finkelstein (who evidently thinks in list form). “First, they came out with the player specially made for how-to videos, with slow-motion, rewind, zoom, and even frame-by-frame printing. If you want to see how a guitarist is playing ‘Johnny B. Goode,’ you can zoom in on his finger movements. We were very impressed with that. Also, from a content standpoint, the CEO, Ron Harnevo, believes in letting the community decide how to do it.” Other how-to video companies, says Finkelstein, are really production companies that simply distribute their videos online, with one video available per subject. 5min, by contrast, takes the YouTube approach. “There may be ten ways to make sushi, so why not put Bob from Detroit up there alongside the master chef from Tokyo,” says Finkelstein.
With the $5 million investment from Spark, announced yesterday, the company will be able to afford a somewhat larger broom closet in New York City, to which it is relocating this month. And while 5min, which calls itself a “life videopedia,” already offers videos on hundreds of subjects ranging from “How to Induce Lucid Dreaming” to “How to Do the Scandinavian Flick” (a high-speed cornering maneuver you might need the next time you’re fleeing bad guys down the streets of Stockholm), the investment—5min’s first outside money—will allow the company to license even more content from additional sources, as well as hire marketing and advertising sales staff.
“We’re excited to work with Spark and further enhance 5Min’s leading position in the online instructional video space,” Harnevo said in Spark’s press release about the funding. “Spark has the expertise, domain knowledge and connections that will help make 5 min the how-to destination for consumers worldwide.”