david weekly's pbwiki web 2.0 expo talk

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A Geek’s Guide to Finding a Business Model by David Weekly

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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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Page 1: David Weekly's PBwiki Web 2.0 Expo Talk

A Geek’s Guide to Finding a Business Modelby David Weekly

Page 2: David Weekly's PBwiki Web 2.0 Expo Talk

Business is Learnable

If you’re smart enough to program,

you’re smart enough to start a business.

(the opposite may not be true)

Page 3: David Weekly's PBwiki Web 2.0 Expo Talk

Why Business?

It’s another lens through which to understand the world.

Systems of the world:

BiologyAstronomyChemistryPhysics

PoliticsPsychologyEconomicsStorytelling

Page 4: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 5: David Weekly's PBwiki Web 2.0 Expo Talk

Why’d I Start a Business?

My History:

‣ Started Coding @ 5‣ Online @ 10‣ Professional Work @ 15‣ Pro Engineer @ 25

…what now?

Page 6: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 7: David Weekly's PBwiki Web 2.0 Expo Talk

Why’d I Start a Business?

The Shocker…?

Zero opportunity cost.

Page 8: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 9: David Weekly's PBwiki Web 2.0 Expo Talk

So…Opportunity Cost?

$80,000 engineer salary

versus

Two years of $0/yearthen $130,000 manager salary

Page 10: David Weekly's PBwiki Web 2.0 Expo Talk

Be Bold

Trying Is Good.

So be bold.

Page 11: David Weekly's PBwiki Web 2.0 Expo Talk

Business Preparation

I got ready to fail.

(good thing, too…)

Page 12: David Weekly's PBwiki Web 2.0 Expo Talk

Selected Failures

BotBlock.com

L0K8.com

Page 13: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 14: David Weekly's PBwiki Web 2.0 Expo Talk

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…

Page 15: David Weekly's PBwiki Web 2.0 Expo Talk

Humility

In two weeks,

my weekend project

had more attention

than my year-and-a-half old project.

Page 16: David Weekly's PBwiki Web 2.0 Expo Talk

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

Page 17: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 18: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 19: David Weekly's PBwiki Web 2.0 Expo Talk

4th Model: Education

‣ “Great work in Chicago!” ???

‣ Very helpful & energetic demographic.

‣ But it’s hard to build an empire from 5th grade teachers’ pocketbooks.

Page 20: David Weekly's PBwiki Web 2.0 Expo Talk

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:

Page 21: David Weekly's PBwiki Web 2.0 Expo Talk

The Catch?

I’m not good at Enterprise Sales &

Marketing.

Page 22: David Weekly's PBwiki Web 2.0 Expo Talk

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.

Page 23: David Weekly's PBwiki Web 2.0 Expo Talk

“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.

Page 24: David Weekly's PBwiki Web 2.0 Expo Talk

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)

Page 25: David Weekly's PBwiki Web 2.0 Expo Talk

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)