The sexy San Francisco Internet start-up has always been an attention-getter. It was formed by serial entrepreneur Scott Banister (also a prolific investor who has backed the likes of Facebook, Hi5 and Powerset and sits on the board of Slide) and wife Cyan. It features tasteful photos that are billed as promoting female beauty and artistic expression (think women, including Cyan, in various stages of undress).
Unlike many in the current Internet boom, this site has no advertising. For $10 a month, members can view and vote on the photos. Each vote delivers cash to models and photographers (60 cents for models, 20 cents for photographers). Casting votes also allows members to get updates from the artists. Members get five votes with their monthly subscription and frequently buy more to act as patrons of the arts, Cyan said. The Banisters like to say that it's a cross between Playboy and "American Idol." There are ground rules: No naked men, no sex acts, no extreme close-ups. Models must prove they are over 18.
PearlSome of Zivity's top models (such as Pearl, pictured at right) have become big hits on the high-tech party circuit, as the Crunchies, TechCrunch's annual awards, show. But now it's Zivity that is taking a hit, joining the ranks of start-ups downsizing to make the money they raised from now skittish venture capitalists last longer.
It was a difficult but necessary decision, say the Banisters, who are seasoned technology professionals. They have experienced the industry's ups and downs before.
Scott dropped out of the University of Illinois at Urbana-Champaign to start a Web advertising company that he later sold to Microsoft. He co-founded spam-blocking company IronPort, which Cisco Systems bought last year for $830 million. That's where he met Cyan, who managed IronPort's blacklist of spammers. Together they came up with the idea for Zivity, which they launched in February 2007. They raised $8 million in two funding rounds from investors such as BlueRun Ventures and Founders Fund.
But, with the slowdown in consumer spending and with venture capitalists zipping up their wallets, the Banisters took a realistic look at their start-up's finances. The Banisters wanted to make sure they had enough cash to remain in business as they prepare to open up to the public early next year and broaden into a place for artists of all kinds to strut their stuff. So they made the tough decision to cut eight out of 22 employees.
"We did an internal budgeting exercise to stretch our cash into 2011 and presented it to the board," Cyan said. "They were very pleased that we were proactive."
