Mainspring Communications Inc, a year-old start-up with substantial venture capital will launch its revenue-generating internet community service on July 1. Mainspring is a web-based membership service that features discussion groups, case studies, product advice and news. Mainspring has signed licensing deals with publishing companies and analysts including Mecklermedia Inc, Sybex Inc, Microsoft Press, Yankee Group, Meta Group Inc and Patricia Seybold Group Inc, among others. It also has original articles and studies from around 50 journalists and analysts. The target market for the service is developers, IS managers, web masters and managers. The Cambridge, Massachusetts company has signed up about 4,000 paid memberships, already, primarily large corporations. For instance, Silicon Valley Bank has bought the service for the chief executives of 2,000 technology companies it represents. Open Market Inc, the e-commerce software company, has purchased a few hundred memberships and Lexis-Nexis Inc is reselling the service to the legal community. Bundling deals are in the offing for Mainspring, and the company will shortly announce a deal with Softbank NetForums to include the service with registration to some of its trade shows. The service costs $500 per year, or $50 per month for those that don’t want to commit for the whole 12 months. Mainspring got first round funding a year ago of $4m, followed by a second round later earlier this year, when Softbank, Reed Elsevier, Flatiron Partners and Chase Capital Partners came on board to bring the total to $11.1m. Mainspring co-founder and executive VP Steve Bayle says the company still has around $7-$8m in the bank. Further fund-raising will be necessary he said, probably this year, and Mainspring went with VC companies that are prepared for multiple rounds of funding, he added. The business plan projects a cost of between $15m to $20m to get the business fully operational. The company is aiming for 20,000 to 25,000 members in a year’s time, which would make it cash-flow-positive, unless it decides to expand faster than at present. Bayle reckons there are lots of partial competitors, but no one company doing the same thing. Many news organizations, such as CMP Media Inc and C/Net offer news services and product reviews, but not the peer- to-peer discussion groups, analyst reports and case studies as well. Mainspring’s advisory board, which meets three times a year, includes Tim Berners-Lee, the man credited with founding the web, and the chair is Roger Heinen, who founded Microsoft’s Developer Division, and prior to that he was senior VP and general manager of Apple Computer Inc’s software division. All members of the board have signed on for another year.
