George Fleming founded his SoMedia Networks video production company in 2006. Since then, it has turned the video-making process on its head: instead of being a creative process controlled by a videographer, every aspect of a SoMedia video, from the b-roll to the type of shots to the interviews, is standardized.
The system lowers the video production costs, making it a more affordable option for small-business owners, said Fleming. SoMedia mostly produces web videos for businesses.
Fleming expected to be able to finance the business through venture capital investment, but after the global recession hit in 2008, that source of funding dried up – especially for the new business model he was trying.
“It was a big challenge,” Fleming said. “We were treating video as a business process.”
Fleming decided to go after a different source of funds: individual investors.
“That was a big challenge because they were all scared because of the financial crisis,” Fleming said. “In the end, we raised $12 million between 2006 and 2012.”
The key, said Fleming, was to approach business people who needed the service SoMedia was offering and therefore could understand the business model.
“Most of them had already experienced trying to get video produced,” he said.
For those investors, SoMedia solved a problem they had experienced first-hand.
“That’s my advice to any young entrepreneur: you need to solve a problem. If you can solve a problem and you can define what the problem is, then you can take it to people who understand what the problem you’re solving is. That’s half the battle of raising capital.”
Fleming added that about 80% of SoMedia’s customers are small businesses but the company is now starting to attract larger clients, such as Marriott Hotels and Resorts.
