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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

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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Transcript

  • 1. A Geek’s Guide to Finding a Business Model
    • by David Weekly
  • 2. Business is Learnable
    • If you’re smart enough to program, you’re smart enough to start a business.
        • (the opposite may not be true)
  • 3. Why Business?
    • It’s another lens through which to understand the world.
    • Systems of the world:
    Biology Astronomy Chemistry Physics Politics Psychology Economics Storytelling
  • 4. 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.
  • 5. Why’d I Start a Business?
    • My History:
    • Started Coding @ 5
    • Online @ 10
    • Professional Work @ 15
    • Pro Engineer @ 25
    • … what now?
  • 6. Why’d I Start a Business?
    • 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 .
  • 7. Why’d I Start a Business?
    • The Shocker…?
    • Zero opportunity cost.
  • 8. 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.
  • 9. So…Opportunity Cost?
    • $80,000 engineer salary
    • versus
    • Two years of $0/year then $130,000 manager salary
  • 10. Be Bold
    • Trying Is Good.
    • So be bold .
  • 11. Business Preparation I got ready to fail. (good thing, too…)
  • 12. Selected Failures BotBlock.com L0K8.com
  • 13. Results?
    • Fancy Technology Didn’t Win. 
    • Simple Projects That Addressed Needs Did.
    • Premature Optimization is the Root of All Evil.
    • The Media Loves Failure.
  • 14. 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…
  • 15. Humility
    • In two weeks, my weekend project had more attention than my year-and-a-half old project.
  • 16. 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
  • 17. 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.
  • 18. 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.
  • 19. 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.
  • 20. 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:
  • 21. The Catch?
    • I’m not good at Enterprise Sales & Marketing.
  • 22. 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. 
  • 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. 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)
  • 25. 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)
  • 26. David E. Weekly [email_address]