David Weekly's PBwiki Web 2.0 Expo Talk

A Geek’s Guide to Finding a Business Model
by 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:
Biology Astronomy Chemistry Physics Politics Psychology Economics Storytelling

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?

Options:
PhD in CS Tedious, 4 years, marginal gains.
MBA Exciting, fun, 2 years, some skills & network.
Start a Company Exciting, immediate, lots of new skills .

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/year then $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?
Fancy Technology Didn’t Win. 
Simple Projects That Addressed Needs Did.
Premature Optimization is the Root of All Evil.
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.

1 st 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

2 nd 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.

3 rd : 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.

4 th Model: Education
“ Great work in Chicago!” ???
Very helpful & energetic demographic.
But it’s hard to build an empire from 5 th grade teachers’ pocketbooks.

5 th 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 Groff
Sold 1 st Company to Apple for $XXm
Sold 2 nd 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 term And 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.
( A s hire A s, B s hire C s, and A s get 100x more work done than C s)

David E. Weekly [email_address]

http://www.web2expo.com	619
http://swedishstartups.ning.com	54
http://www.pascalrossini.com	25
http://www.linkedin.com	11
http://prpyecto-segundo.blogspot.mx	10
http://aniq.posterous.com	8
http://blog.slideshare.net	7
http://comeandseeafrica.blogspot.com	5
http://lanyrd.com	2
http://translate.googleusercontent.com	2
http://prpyecto-segundo.blogspot.com	1
http://pascalrossini.tumblr.com	1
http://www.bing.com	1
http://www.web2expo.com.ezp.lib.rochester.edu	1
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David Weekly's PBwiki Web 2.0 Expo Talk

by David Weekly on Apr 03, 2009

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