On more than one occassion I have questioned the lack of paid features on web 2.0 sites and realize that much of the problem is that people feel to reach a critical mass you need offer everything for free. There are two things wrong with this line of thinking:
- Since when do you need a critical mass to start making money?
- Why can’t free/paid features be rolled out simultaneously?
In essence the problem that people think they are facing is one with the chicken and the egg. You want to make money from paid features, but you want to bring people onto the site first. So what do you do? Include the features from step one or give everyone the free stuff and then include afterwards?
For 9rules sooner or later (hopefully more sooner than later) we will being to release paid features for my.9r without worrying about what the numbers with regards to registrations. We’ve had this planned from the beginning and it is only a matter of finishing the stuff up. However, I know that other companies get put into this situation and fear that adding features that must be paid for will cause people to rebel. Maybe some people will, but we feel that as long as we are not changing what you get for free already (and continuously making that portion better) then you have the option to pay for the “pro” features if you want to. If not you can continue on your merry way down the free path.
Why don’t we see this more often? I think it comes down to fear. Too many of us have become blinded by big numbers. If we can’t report a million pageviews or a million registrations then we are not at the same level as the other big boys and that is where we need to be first correct? Does it really matter as long as you are making money and building up?
Or maybe there is the fear that you can’t offer anything compelling enough for people to pay for so you just continue to release new stuff for free. However, why not set a line where the free stuff stops and the paid stuff begins? If it doesn’t work out then you can still release it for free down the road anyways.
I like the idea of simultaneously developing free and paid versions at the same time. I would rather have my chicken sitting on an egg instead of waiting for a chicken to lay an egg or watching an egg hatch.
I have a fascination with company stories. Have you ever noticed that whenever there is an article on a successful company that there is usually a cool story attached to it? Over time the stories become myths with new bits and pieces added in to the point where you don’t know where the truth ends and the story begins. The 9rules Story is a fascinating one when you think about it, but is it true?
*shrugs
In any case having a boring story doesn’t mean success, but can’t part of your brand be the lore behind how the company got started? So does your company have a story and if it does do you like to tell it?
You have to respect any person that is passionate about what they do. It could be the greatest thing in the world or the dumbest, but if they are passionate about what they do and it shows then you have to give them some type of respect in my opinion. That’s the case with Jeremy Wright and his company b5media. If you are going to say something about them they are going to come back with the passion that you would expect anyone to have when it comes to their company.
This discussion brought out the passion in people who wanted to continuously remind me of my “failure” known as the Fine Fools Network. Fine Fools was my side project. It was my version of how a blog network should run. The idea was simple, you come up with a decent idea for a site and I would host it and you would earn all the ad revenue for the pages that you write. So essentially what I got was frontpage ad revenue while the writers got internal page revenue. My thinking was that if I am not going to pay them straight up for the work they put in, I might as well give them the opportunity to earn what they put in.
Things started off smooth, but some of the bloggers got hungry. Real hungry. The could taste success and they wanted more, which is exactly what you should want. That’s passion and I loved it (and hated it). Unfortunately I couldn’t keep up with what they wanted, albeit how simple their requests were because 9rules was/is my baby. That’s where my focus goes. If Fine Fools was my only focus and I could cater to the wants and needs of its writers I have no doubt that it would still be around today wreaking havoc. Instead I got rid of it to keep my focus.
And how exactly did I get rid of it? I gave the sites away to the people who wrote on them because they earned it. Again, giving away means not asking them to pay me for it. Let’s look at some of these people and you might have heard of some of their names.
- David Krug. I had the domain, he had the idea. If you want to know how much trouble you can cause in a two month span just with a blog then you should go find the history of JOAB. Now what does he do? He bounces around from site to site with his latest being 901am, which from what I read is doing well and in another twist of fate has Duncan Riley as a writer who used to work for b5.
- Melissa Petri. She writes on Escape Blog, which was one of the most interesting and well-written b5 sites around, but she apparently left due to the requirements that were being asked of her. Now there are a ton of things I can say about this entry, but I’ll leave it up to you to read.
- Liz Strauss. Successful Blog. I’m going to go out on a limb and say it is one of the most popular blogs within the b5media Network. I’m going to be honest here and say that Liz is a pain in the ass to work with…and that’s because she knows what she wants and she’ll be damned if anything stops her from achieving it. Nothing wrong with that and in all honesty you want writers with that drive
Now I have no doubt these three individuals could have done it without me, but I gave them a platform to take that jump. What they have done since them is all to their credit. However, they got their “big break” on my failure. How much of a failure is that?
Let’s move on…
Back in mid-2005 we had an idea to bring on a little blog network to 9rules and help it grow. That network was About Weblogs and our offer was denied due to complications with revenue sharing. Completely understandable giving how we were working back then. A couple months later Shai Coggins wrote about the potential merger (scroll to bottom entry) and not too long afterwards b5media merged with them. Let’s just say that isn’t a coincidence.
So where is all of this coming from? It started with this comment from Jeremy Wright, CEO of b5media:
We bought a site that Scrivs failed on so that selling was the only way to make a buck. And that makes Scrivs right about everything.
You see they bought Work Boxers which back in the day when I was flowing on it was a damn good read for making money on the web. I stopped writing on it because again 9rules became my time so what did I do? I gave it (away) to a guy named Jamsi, who sold it to David Krug (yes the one above), who then sold it to b5.
Makes me kind of wish that on some of b5media’s sites they said “Powered by b5media and Scrivs” at the bottom. Now don’t get me wrong, I do have some real legitimate failures where I lost money, time, friends, etc., but in some way they always turn out well for the sole reason that I learned from them. I’m just never going to see starting a Network for $0 and making thousands in return and helping people get their start in this blog world or watching non-failing companies buy up sites that I give away as falling into the failure category.
Technological advancements are taking over the ways of business we are using today. Groundbreaking inventions of internet are clearly evident all over the world. Now web hosting companies can operate their web servers through wireless internet connections where as one can manage its ppc account just utilizing the services of credit card processors or order web hosting package with just logging on to internet.
A comment left on the thrilling Why Blog Networks Failed discussion sparked some interest in this mind of mine and I would like to dive a bit deeper into it.
I’m not sure which of you guys has the most sand in his vagina, but I suspect it is Mike Rundle.
At least we’re having a discussion about BUSINESS MODELS rather than ROUNDED CORNERS and associated bullshit.
Media buyers are still lazy, only vaguely get ‘the web’ (proof: they still buy page impressions), and major publishers are useless at targeting / segmenting.
Look no further than the slow-moving online ad industry if you want to look at why blog networks / bloggers (aka online publishers) aren’t doing amazingly well.
Now besides the fact this sounds like total resentment for not finding enough advertisers to monetize on your own sites, this shows something a bit deeper. It’s no secret that I don’t like the idea of having your sole revenue stream come from advertising. The problems are just too deep.
- Too much competition for ad dollars. How many sites out there are targetting the same audiences?
- Stats are scary. Unlike offline, on the online world you can actually get a pretty accurate measure of how many people are seeing your ads and what they are doing with them. Bad numbers equal no reason for people wishing to jump online quickly to advertise.
- Not enough respected online brands. There simply are not enough great online brands around. Sure you may like a site and visit it daily, but does it have a strong enough brand to even appeal to larger advertisers? This isn’t television where you know the sports brand is ESPN or the teenager/young adult brand is MTV. Online who represents the big brands?
- More ways to exit. With radio or television the only way to escape an ad was to change the channel/station or turn off the radio/television. Online though you can install adblockers, go to another website quickly or choose to simply skip the banner. The ads that try to get right in your face (interstitials) just piss people off.
It’s not that the online ad industry is moving slow, it’s that there is no real reason for them to make a big splash online. MySpace is the MTV brand, but who pays attention to those ads? The ones who put ads up there are doing so for pennies on the dollar. The fact is the online ad industry needs to get more creative with how they fit into the user’s experience on websites and much of that responsibility falls on the site owners so if anything I think it is safe to say the site owner industry is the one moving slow.
Too many site owners have this idea that they can create a site, find a spot to place ads and think advertisers will jump onboard. If life were only so easy.
Do you remember those things that we called Blog Networks? You might have paid attention or you might have went about your life like nothing changed and that’s one of the reasons why they failed. ‘Failed’ might be a harsh term to use, but of the hundreds of blog networks that started in 2005 and 2006 which ones are thriving and by ‘thriving’ I don’t mean staying above surface?
But why did they fail? Were they just cool because anyone could start one and it was a sweet buzzword to associate yourself with for a while? It is not that hard to understand why they didn’t live up to the hype that they created for themselves. All you have to do is look at what makes a single blog successful:
- Great content. Great can mean insightful or great can mean entertaining, but if you lack it then you will lack an audience. This is the basic principle of any great blog.
- Interaction. Some of the greatest blogs have an interaction between the writer and the audience that don’t make the blog a site anymore, but a community.
- Luck. It does take some timing and luck to make it big as well. There is no sure fire success plan. Arrington hit the wave at the right time.
Most of the blog networks lacked these basic qualities. If you can’t get one blog to become a success how can you expect to make a lot of little blogs a success? How many blog networks can say they make as much as TechCrunch or boingboing in a month or hell maybe even a year? The Long Tail definitely serves a purpose here, but only if you are to become part of the fat end.
If you are to make money off of these sites you need them to make it big. When AOL began dropping WIN blogs it shouldn’t have come as any surprise because they have to look at the bottom line. Same can be said when b5media closes a site although I’m pretty sure they said they would never do such a thing. Point is, if you start a blog network and its intention is to make money you have to do it the right way and there is simply no money in tiny blogs that require resources just like there is no big money in investing in penny stocks.
But in all honesty what average person even cared if a site was part of a blog network when most of them have no meaning? For example, if you have a 9rules leaf on your site to some people that means something. It could mean:
- Great content.
- Quality site.
- Leader in niche.
- Member of a highly elitist clique who are full of themselves.
Either way the leaf means something and even then many of the readers of our Member sites could care less if they are part of 9rules or not because they care about the site. How can a blog network make its readers care about the network itself though? I’m not so sure it can. People don’t care about WIN, they care about Engadget. People don’t focus on Gawker Media, they focus on Gawker the site.
All the blog networks after WIN and Gawker spent so much time trying to make something from little bits and pieces that they forgot to evaluate what might be important to them. You can build 100s of sites, but what does that change? It just means you have 100s of sites to micro-manage now which takes away your resources.
Many blog network owners knew this yet they continued to push on and add more sites before making any of the previous ones relevant. Almost like how project managers add more coders to a project thinking it will get done faster.
So why did blog networks fail? If you haven’t figured it out yet you probably still run one yourself.
Domain registration of a site is not difficult nowadays because lots of ISP service provider companies are working and they offer you best package for your site web design. These companies also provide you internet marketing services and some of them provide you credit card processing services which work on specially designed software. These companies can also provide you wireless internet connection which is quite reliable in these days.
Now I know this might be a strange question to ask since the goal of many companies is to get bought out and therefore it must be fun if that happens right? Well this year I am pointed to two examples where getting acquired seems to have a very short High period followed by a lot of Lows.
Now in the first case, Aaron Swartz, one of the few super geniuses on the web, was destined to leave Conde Nast because he is an independent spirit. Things were great when Reddit was bought and I’m glad to see that he wasn’t forced to stay there for a year. A good purchase by Conde and smart move by Aaron. In this case getting acquired could be kind of fun if you already know what your second exit strategy is going to be.
In the second case you have MyBlogLog which was purchased by Yahoo this year in one of the most mind-boggling acquisitions I could ever think of. Anyways, MBL was starting to take off so getting acquired by Yahoo when they were still very small was a great thing because now they would have the resources they needed to do what they want right? Well it doesn’t really look like it.
If you have any experience with MBL you know it has been one disaster after another and all of it seems to surround spam. This past weekend was no exception and if you read the above link you will understand why. However, one part caught my eye in that entry and it made me do a double-take because I never pictured the acquired life to be like this.
First, in the States it was a three day weekend, so everyone was basking in the thought of staying offline for a few days and coming back recharged. Todd and John were back in Orlando at a wedding and Steve, who just moved out here, is busy looking for a place to live. And I’m splitting my free time between unpacking and giving my wife time off from watching our 16-month-old. No one was looking online.
Now I’m all for companies being acquired and the holding company being hands off, but isn’t that a bit too hands off? Nobody was online scoping out what is happening with the site? I don’t really understand the purpose of getting acquired if you get more spam, still have to completely run things and you can’t walk away without someone in the mega-company looking over things.
But then again in my world you get to ride on the backs of butterflies and the clouds are made of cotton candy.
Do you look at your competition and:
- Laugh at them?
- Wonder what the hell they are doing?
- Worry that they will do something great?
- Try to be like them?
- Wish you were them?
- Hope they fall off the planet?
- Wish they did the obvious moves to make themselves better?
How many companies out there really outshine their competition?
- Apple (music wise)
- 37signals (is there any competition in their space?)
- IKEA
- Pixar
- Starbucks
What makes the above companies excel over all others?
And finally what is the greatest competition that you face: the companies in your industry or the performance of your company yesterday?
Just some questions to think about.
For however long many of us have been caught up in the fact that we think the web should be as decentralized as possible because there just seems to be so many benefits to it. For example, file sharing was great with IRC, but became even better with the advent of peer-to-peer networking which used a decentralized model for sharing. It can be argued that the system never starts off as being decentralized since the source has to start from one point, but that is another discussion. With the idea of decentralization being around for a while now how much of the web is really decentralized though?
When we started 9rules we intentionally didn’t want to start a Network where we owned all the sites because the idea of having something decentralized appealed greatly to us. However, 9rules could be considered more of a hybrid model because the 9rules site itself could easily be considered the hub with all of the other sites sprinkled around it. Because of the decentalized system that we use we can grow or shrink at our own choosing without any worries of how it will effect us resource wise.
The biggest movement for decentralization though seems to be coming from Identity systems with OpenID getting the most press lately. The idea is that if everyone uses the OpenID then you no longer have to worry about remembering a thousand different logins and you can focus on having one identity on the web. A great thing right? Well not so fast, let’s think about this one for a second.
Offline don’t we have a system that identifies us as unique individuals already (at least in the United States)? Yes, and its our Social Security number. What happens though when someone gets a hold of it and uses it for themselves? Lots of bad things can happen. A couple of years ago my credit card company called me to inform me that some woman shared the same SSN as me and after doing some more research found out that she was an illegal immigrant.
What can you do though once someone has your identity? You can get your SSN changed and then proceed to change the one million other accounts that use your SSN as their basis of information which becomes a pain in the ass. That one point of identification can be great for a lot of things, but once things go bad they can go really bad.
Large corporations with datacenters never maintain backups in the same place as the live storage because what if something were to happen with the building? They decentralize their data to provide failsafes and this provides another level of security. Maybe I’m not versed enough with OpenID to understand all of its logistics, but what happens if my one single ID gets corrupted or stolen? What do I do then?
When building my.9rules we had two options:
- Build a system that was the end all solution for all your needs: photo storage, blog creation, video hosting, etc.
- Build a system that utilize your accounts from all over the web.
Option #2 is what we envision as the decentralized way of doing things and that is what we like. What if you have everything on MySpace? Your photos, blog entries and videos and then one day they just shutdown without warning? What are you left with?
Maybe I am getting too caught up in semantics to see how the “decentralized” OpenID system is truly a good thing or how its really even decentralized in the first place.
An interesting problem that many of today’s sites have is that they don’t function well and aren’t designed well. Many of the successful Web++ sites seem to function very well, but lack pleasing aesthetics. Very rarely do you see a site that has the problem of great design masking a lack of functionality or features, but 9rules had that problem for a long while.
In many ways 9rules has been a great success to us, but internally there was always a nagging feeling that so much more could be done with the site. The recently launched Ali is our 5th revision of the site and as was the case with the other revisions adds more of the functionality that we had envisioned. With every revision we are left wondering how we lived without the functionality prior to the release and in all honesty I think the design of the site and active community kept us stable for so long and people coming back.
The fact is I think we were hiding our lack of functionality behind a great design (yes I think our designs are great). We knew we could do more and I’m sure others felt the site could do more, but for a while our design and our great community were saving us. Now this isn’t necessarily a bad thing, but something that you can’t rely on forever because sooner or later someone is going to surpass you because they saw the functionality that you lacked.
Now none of this means we aren’t extremely happy with each revision of the site that we release, otherwise we wouldn’t release them. We just have a bad habit of constantly wanting to do more and push the boundaries of what is expected of us. In many cases you could swap out the term “functionality” for “features” because each revision of 9rules worked, just without some of the features that would’ve made the site a more pleasing experience.
To get what I mean let’s look at the version history of 9rules.
- Version 1: Giant linkroll.
- Version 2: Member content aggregator.
- Version 3: Communities introduced.
- Version 4: Notes introduced.
- Version 5: Ties it all together to make for one cohesive experience.
In a perfect world Versions 1-5 would have happened at once or at least a lot closer to each other, but because of internal and external factors it didn’t happen. However, during this time 9rules never faltered. The site and community continued to grow even with the minimal amount of functionality that the site had. I have no doubt that our members and community played a much larger role than the design of the site, but I’m willing to guess that the design played a significant part as well.
How often do you see this happen on blogs? You come upon a blog that has a great design and maybe you come across the one great article that everyone has linked to so you subscribe to the site or bookmark it. Yet over the next couple of weeks you find that there isn’t really any great content to be had.
Now let us take the reverse example. You come upon a poorly designed blog (yeah, yeah like this one right?) and instead of immediately subscribing to it you go over the archives to see if the content is really better than the design. How many times does a person get labeled a design expert because of a great design and shitty writing?
A couple of years ago Volkswagen leaned heavily on hiding behind the design of their cars until Consumer Reports rated them the lowest with regards to car performance. Eventually people stopped buying them and VW had to focus on not only the design of the car, but how well they functioned. Design can only take you so far, but it is best to have a great design in place than no design and crappy functionality.
The new 9rules Ali is only 5 days old and already a slew of feature requests have been coming our way. What have I learned during these five days that I already knew before, but never experienced myself? Everybody wants everything done their way. This isn’t a bad thing because we all know how to make the experience better for us, but most of the time one man’s solution becomes another man’s problem.
The tricky part we are finding about feature requests is that while all of them may sound good, not all of them are really practical or needed. For example, some people have requested that we integrate GMail into my.9rules and while the idea seems kind of cool there is really nothing practical about it. We are finding that with the infrastructure that we have put in place we can do a lot of things, but that doesn’t mean we should do all of those things.
Is it a bad thing that everyone wants the site to do everything? Of course not because that shows they have an interest in it instead of looking and turning away. The hope is that if you do implement a feature request it helps increase the experience of all the users in the system and not just the ones that requested it.
An even bigger problem is when the creators of the system want the system to do everything. We do get ahead of ourselves sometimes, but who doesn’t? As of now though we are focused on tightening up the user’s experience on the site and features can come down the road.
