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David Weekly's PBwiki Web 2.0 Expo Talk

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David E. Weekly
David E. Weekly

The document discusses the author's journey of starting a business after a career in engineering. It outlines some of the business models he tried, including ads, vertical communities, consumer subscriptions, and enterprise SaaS. He realized his strengths were in engineering and technology, not sales and marketing. So he hired an experienced business leader who helped grow the company and sell it to a large tech company. The key lessons are to expect failures when starting out, scientifically test business ideas, and know your own strengths and weaknesses when building a team.

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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?
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 .
Why’d I Start a Business? 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]

More Related Content

David Weekly's PBwiki Web 2.0 Expo Talk

  • 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…)
  • 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]