Global Grind Rumors & What is Schmuck Insurance?

I'm getting some confirmations regarding problems at Global Grind but nothing I can run with beyond the assertion that, yes, most of the posters are paid staff or freelancers and that many are unhappy with the situation, in part, because they're not caking.

I wonder what they're spending all those investment dollars on?  Is that connected to the "schmuck insurance" Russell Simmons was bragging about on Rev. Run's show?

Looking back, here's Liz Burr's take:

"Global Grind raised $4.5 Million from Accel Partners, with Russell Simmons adding his own undisclosed investment funds to the project. Where did all this money go? In a recent episode of Run's House, Russell pitches the site to his brother, Rev Run, and asks him to invest in the company. Russell retorts that he spent a lot of money in "Schmuck Insurance," which sounds like he just asked someone to write up some hefty NDAs and Non-Compete paperwork. Did this so-called Schmuck Insurance cost $4.5 million? Because looking at this site, I have no idea where else the money went."

"Copy the digg concept...switch out a few category labels.....what else is there to spend $4.5 million on? Definitely not design. Is all of the money going to marketing? Did they take out a Super Bowl ad? Open up a new office building? I'd like to note, Digg raised its first $2.8 Million in VC funding, ten months after it launched. Meanwhile back at the ranch, GlobalGrind has $4.5M+ out the gate and this is what they have to show: a broken site, cloned and derivative to the max?"

Looking forward:
At least the deadpoolboy is assured of steady employment.

Question for Russell Simmons:
By "schmuck", do you mean Navarrow Wright, Accel Partners, the underpaid Global Grind Staff or hip hop web users more generally?

Biggest Downside:
Venture capital will become ever more suspicious of "urban" and hip hop web ventures as their own form of schmuck insurance.

Or maybe it won't matter.  Venture capital investments lead to the failure of 8 out of 10 businesses.

Heck, this might be the upside to Global Grind's pathetic tale.

Related ProHipHop Coverage:
Rumor: Global Grind's Heading for the Dead Pool?
Global Grind's Navarrow Wright & Failures in Web 2.0 Communication
Global Grind Reboots, Abandons Opening Position
Looking Back at 360HipHop, Considering Global Grind

Comments

[Koe]

You know, I disagree with Liz's assessment. Global Grind has changed its model a few times...but so many businesses do that in figuring the space their in. I don't see this is a problem. Hip Hop is finicky. So one model might/might not work. Google's business model evolved into what it has become. Clear Spring, one of the biggest widget makers, has changed its business model 3 times...after VC funding. I can't imagine that someone like Accel Partners would back idiots who can't figure it out.

MySpace was not the first social network of it's kind (BlackPlanet came out about 3-5 years before). So not being the first isn't the problem. Mixx.com is another social bookmarking site that's doing well, but it's nothing special. they offered equity in their company so high traffic sites can put a mixx logo on the site. That's how they're driving traffic

Yep - they're going to have to figure this out quickly, or else the money's going to dry up.

[Clyde Smith]

"I can't imagine that someone like Accel Partners would back idiots who can't figure it out."

Maybe they're backing relatively intelligent people who can't figure it out.

[Koe]

LOL...you could be right. Good post.

[Engelwood]

I've used global grind on my site with little to no traffic increase. I've had some fairly successful submissions with 10~20 grinds and the traffic was in the upper single, lower double digits.

I think one of the reasons Digg has been so popular is because it brings a huge traffic increase to sites when submissions reach the front page. Sure the vast majority of submissions won't make the front page, but the allure is there. This draws people to the site and they stick around and participate in the community.

On Global Grind, There isn't any draw for content creators because submitting doesn't bring any benefit. IMO, thats a big part of the reason Global Grind isn't doing well.

If I were in charge of Global Grind, I'd work on the front page, make the community aspects of the site more prominent, and offer some sort of benefit to content creators to submit things. The idea is solid, but so far the execution has been iffy at best.

[Clyde Smith]

Good points, especially on giving content creators themselves a reason for posting their own work.

I find the fact that they show other people's content with a side frame is not so cool either.

I had actually decided to start posting there right before I realized it was GG crew members acting out in my comments section.

But for most content creators, you've cut to the heart of the matter.