David Weekly's PBwiki Web 2.0 Expo Talk


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David Weekly presents "The Alpha Geek's Guide to Finding a Business Model: PBwiki's 4-Year Odyssey" at the 2009 Web 2.0 Expo in Moscone West, San Francisco, CA

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David Weekly's PBwiki Web 2.0 Expo Talk

  1. 1. A Geek’s Guide to Finding a Business Model <ul><li>by David Weekly </li></ul>
  2. 2. Business is Learnable <ul><li>If you’re smart enough to program, you’re smart enough to start a business. </li></ul><ul><ul><ul><li>(the opposite may not be true) </li></ul></ul></ul>
  3. 3. Why Business? <ul><li>It’s another lens through which to understand the world. </li></ul><ul><li>Systems of the world: </li></ul>Biology Astronomy Chemistry Physics Politics Psychology Economics Storytelling
  4. 4. Why Business? <ul><li>It is not a good way to get rich quickly. </li></ul><ul><li>But it is a good way to be in control of your destiny. </li></ul>
  5. 5. Why’d I Start a Business? <ul><li>My History: </li></ul><ul><li>Started Coding @ 5 </li></ul><ul><li>Online @ 10 </li></ul><ul><li>Professional Work @ 15 </li></ul><ul><li>Pro Engineer @ 25 </li></ul><ul><li>… what now? </li></ul>
  6. 6. Why’d I Start a Business? <ul><li>Options: </li></ul><ul><li>PhD in CS Tedious, 4 years, marginal gains. </li></ul><ul><li>MBA Exciting, fun, 2 years, some skills & network. </li></ul><ul><li>Start a Company Exciting, immediate, lots of new skills . </li></ul>
  7. 7. Why’d I Start a Business? <ul><li>The Shocker…? </li></ul><ul><li>Zero opportunity cost. </li></ul>
  8. 8. Zero Opportunity Cost? <ul><li>Even a Failed Startup Teaches You: </li></ul><ul><li>How to hire, manage, and fire people. </li></ul><ul><li>How to structure a plan, test hypothesis, grok a market. </li></ul><ul><li>How to write a business plan. </li></ul><ul><li>How to structure finances. </li></ul><ul><li>It’s better than business school. </li></ul><ul><li>And it qualifies you for management. </li></ul>
  9. 9. So…Opportunity Cost? <ul><li>$80,000 engineer salary </li></ul><ul><li>versus </li></ul><ul><li>Two years of $0/year then $130,000 manager salary </li></ul>
  10. 10. Be Bold <ul><li>Trying Is Good. </li></ul><ul><li>So be bold . </li></ul>
  11. 11. Business Preparation I got ready to fail. (good thing, too…)
  12. 12. Selected Failures BotBlock.com L0K8.com
  13. 13. Results? <ul><li>Fancy Technology Didn’t Win.  </li></ul><ul><li>Simple Projects That Addressed Needs Did. </li></ul><ul><li>Premature Optimization is the Root of All Evil. </li></ul><ul><li>The Media Loves Failure. </li></ul>
  14. 14. The Answer <ul><li>I had been helping groups with wikis for years. </li></ul><ul><li>But they weren’t fancy technologies. </li></ul><ul><li>So I didn’t think there was a business. </li></ul><ul><li>But I got tired of helping friends set up wikis. </li></ul><ul><li>They should be able to do it themselves! </li></ul><ul><li>… as easily as making a peanut butter sandwich… </li></ul>
  15. 15. Humility <ul><li>In two weeks, my weekend project had more attention than my year-and-a-half old project. </li></ul>
  16. 16. 1 st Business Model: Ads <ul><li>Wikis are mostly text… </li></ul><ul><li>so should be good for AdWords? </li></ul><ul><li>… but... </li></ul><ul><ul><li>Very wide diversity of communities = low CPM. </li></ul></ul><ul><ul><ul><li>100,000 users/mo </li></ul></ul></ul><ul><ul><ul><li>10 pages each </li></ul></ul></ul><ul><ul><ul><li>$1 CPM… $1,000/month </li></ul></ul></ul>
  17. 17. 2 nd Model: Vertical Communities <ul><li>We built vertical wiki communities: </li></ul><ul><ul><ul><li>Red Sox, Chronicles of Narnia, The O.C., Home Improvement… </li></ul></ul></ul><ul><ul><li>Advertise in niches = High CPM!  </li></ul></ul><ul><ul><li>… but… </li></ul></ul><ul><ul><li>building communities is hard. </li></ul></ul><ul><ul><li>Especially when you’re not a member, </li></ul></ul><ul><ul><li>and especially when you try to grow a lot of them quickly. </li></ul></ul>
  18. 18. 3 rd : Consumer Subscriptions <ul><li>$5/mo/wiki = no ads </li></ul><ul><ul><li>People paid!  </li></ul></ul><ul><ul><li>… but… </li></ul></ul><ul><li>Consumer subscriptions usually have 1-5% conversion. </li></ul><ul><li>So we’d need to be signing up 350k – 1.5m new groups a year to be a million dollar business. Gack. </li></ul>
  19. 19. 4 th Model: Education <ul><li>“ Great work in Chicago!” ??? </li></ul><ul><li>Very helpful & energetic demographic. </li></ul><ul><li>But it’s hard to build an empire from 5 th grade teachers’ pocketbooks. </li></ul>
  20. 20. 5 th Model: Enterprise SaaS <ul><li>Our native model (subscriptions) </li></ul><ul><li>… applied to people who could actually pay (businesses) </li></ul><ul><li>… and who find us valuable (productivity) </li></ul><ul><li>A proven business model: </li></ul>
  21. 21. The Catch? <ul><li>I’m not good at Enterprise Sales & Marketing. </li></ul>
  22. 22. Humility <ul><li>The Branson / Buffett Model : </li></ul><ul><li>Hire someone to make you rich. </li></ul><ul><li>… so I did: </li></ul><ul><li>Jim Groff </li></ul><ul><li>Sold 1 st Company to Apple for $XXm </li></ul><ul><li>Sold 2 nd company to Oracle for $XXXm </li></ul><ul><li>… and now PBwiki.  </li></ul>
  23. 23. “ 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.
  24. 24. Where We’re At <ul><li>Millions of users/month </li></ul><ul><li>800,000+ communities </li></ul><ul><li>50,000+ businesses </li></ul><ul><li>Teams at half the F500 </li></ul><ul><li>More content than Wikipedia </li></ul><ul><li>30 employees </li></ul><ul><li>… and rapid adoption by lawyers and for projects . </li></ul><ul><li>(the experiment continues) </li></ul>
  25. 25. Lessons Learned <ul><li>Wrong-Thinking: </li></ul><ul><li>Networking is for losers. If you’re smart, people will find you. </li></ul><ul><li>If you write clever software, you’ll become rich and famous. </li></ul><ul><li>Delegation means you couldn’t figure it out. </li></ul><ul><li>Right-Thinking: </li></ul><ul><li>Use the scientific method: </li></ul><ul><ul><li>Hypothesize, Experiment, Measure, Evaluate, Repeat. </li></ul></ul><ul><ul><li>Expect to be wrong. </li></ul></ul><ul><li>Stick to hiring A -people. </li></ul><ul><ul><li>( A s hire A s, B s hire C s, and A s get 100x more work done than C s) </li></ul></ul>
  26. 26. David E. Weekly [email_address]
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