Download - David Weekly's PBwiki Web 2.0 Expo Talk
A Geek’s Guide to Finding a Business Modelby David Weekly
Business is Learnable
If you’re smart enough to program,
you’re smart enough to start a business.
(the opposite may not be true)
Why Business?
It’s another lens through which to understand the world.
Systems of the world:
BiologyAstronomyChemistryPhysics
PoliticsPsychologyEconomicsStorytelling
Why Business?
It is not a good way to get rich quickly.
But it is a good way to be in control of your destiny.
Why’d I Start a Business?
My History:
‣ Started Coding @ 5‣ Online @ 10‣ Professional Work @ 15‣ Pro Engineer @ 25
…what now?
Why’d I Start a Business?
Options:
1.PhD in CSTedious, 4 years, marginal gains.
2.MBAExciting, fun, 2 years, some skills & network.
3.Start a CompanyExciting, immediate, lots of new skills.
Why’d I Start a Business?
The Shocker…?
Zero opportunity cost.
Zero Opportunity Cost?
Even a Failed Startup Teaches You:
‣ How to hire, manage, and fire people.
‣ How to structure a plan, test hypothesis, grok a market.
‣ How to write a business plan.
‣ How to structure finances.
It’s better than business school.
And it qualifies you for management.
So…Opportunity Cost?
$80,000 engineer salary
versus
Two years of $0/yearthen $130,000 manager salary
Be Bold
Trying Is Good.
So be bold.
Business Preparation
I got ready to fail.
(good thing, too…)
Selected Failures
BotBlock.com
L0K8.com
Results?
1. Fancy Technology Didn’t Win.
2. Simple Projects That Addressed Needs Did.
3. Premature Optimization is the Root of All Evil.
4. The Media Loves Failure.
The Answer‣ I had been helping groups with wikis for years.
‣ But they weren’t fancy technologies.
‣ So I didn’t think there was a business.
‣ But I got tired of helping friends set up wikis.
‣ They should be able to do it themselves!
‣ …as easily as making a peanut butter sandwich…
Humility
In two weeks,
my weekend project
had more attention
than my year-and-a-half old project.
1st Business Model: Ads
Wikis are mostly text…
so should be good for AdWords?
…but...
Very wide diversity of communities = low CPM.
100,000 users/mo
10 pages each
$1 CPM…
$1,000/month
2nd Model: Vertical Communities
We built vertical wiki communities:
- Red Sox, Chronicles of Narnia, The O.C., Home Improvement…
Advertise in niches = High CPM!
…but…
building communities is hard.
Especially when you’re not a member,
and especially when you try to grow a lot of them quickly.
3rd: Consumer Subscriptions
‣ $5/mo/wiki = no ads
People paid!
…but…
‣ Consumer subscriptions usually have 1-5% conversion.
‣ So we’d need to be signing up 350k – 1.5m new groups a year to be a million dollar business. Gack.
4th Model: Education
‣ “Great work in Chicago!” ???
‣ Very helpful & energetic demographic.
‣ But it’s hard to build an empire from 5th grade teachers’ pocketbooks.
5th Model: Enterprise SaaS
Our native model (subscriptions)
…applied to people who could actually pay (businesses)
…and who find us valuable (productivity)
A proven business model:
The Catch?
I’m not good at Enterprise Sales &
Marketing.
Humility
The Branson / Buffett Model:
Hire someone to make you rich.
…so I did:
Jim GroffSold 1st Company to Apple for $XXm
Sold 2nd company to Oracle for $XXXm
…and now PBwiki.
“Know Thyself”
Know your strengths,Route around your weaknesses,Know that you will fail in the short termAnd that this is the path to long-term success.
Where We’re At
‣ Millions of users/month
‣ 800,000+ communities
‣ 50,000+ businesses
‣ Teams at half the F500
‣ More content than Wikipedia
‣ 30 employees
…and rapid adoption by lawyers and for projects.
(the experiment continues)
Lessons Learned
Wrong-Thinking:‣ Networking is for losers. If you’re smart, people will find you.
‣ If you write clever software, you’ll become rich and famous.
‣ Delegation means you couldn’t figure it out.
Right-Thinking:‣ Use the scientific method:
- Hypothesize, Experiment, Measure, Evaluate, Repeat.
- Expect to be wrong.
‣ Stick to hiring A-people.
- (As hire As, Bs hire Cs, and As get 100x more work done than Cs)