Boing Boing: There’s More than One Way to Start & Run a Company

Of course there’s more than one way to start a company, or run it.

But when you’re in the startup echo chamber that tends to be full of venture capitalists (VCs), you might start to believe their promises of easy money, giving up little control, and really making a splash in the world.

So I was pleasantly surprised to read of Boing Boing’s alternative path to run their small but successful blog. Boing Boing started off as a print magazine, but migrated in the early days to the web. It’s been a cornerstone of the web ever since. At first, it was just like Yahoo! — a directory of other stuff you could find online. Boing Boing differentiated itself by only linking to “cool stuff” the editors liked. Which, as it turns out, was sometimes some pretty cool stuff you’d never find elsewhere.

Back in the early days of the web — 1995, 1996 — it still seemed like a manageable amount of data and information. You could literally find new websites that just came online and help promote them by sharing them with others. (Before social networks, we did this through simple linking on a website. Directories still exist online, but they’ve long been surpassed by search engines like Google. Yahoo even shut down its own eponymous directory at the end of 2014.)

Boing Boing thrived because it linked to cool stuff.

And, as it turns out, it made a business of itself by keeping things small and manageable. But I like this the best:

One thing I wondered is why successful blogs like Boing Boing and Laughing Squid chose to stay small. Other early blogs like Huffington Post, Mashable, and Gigaom took on VC investment in their efforts to scale. Even Gawker’s Nick Denton, who long resisted outside investment, recently sold a sizable chunk of equity.

“Sure we could get investment if we wanted it,” said (Laughing Squid’s founder Scott) Beale. “But we see companies destroyed by it too. You give up a lot of control and then there are demands put on you by people who don’t know anything about your company.” He pointed to Gigaom, a tech site that ran out of money and laid off its entire staff last year, as an example of what happens when a media company can’t scale at a rate that would satisfy investors.

(Boing Boing’s founder Mark) Frauenfelder was similarly disdainful of the idea. “We were just paying bandwidth out of pocket before we started selling ads, and then we became profitable right off the bat in 2004,” he said.

“We’ve never been interested in getting funding to grow it in a big way like those sites because it’s just not sustainable. There’s no way they’re making enough money from advertising to pay whatever their burn rate is. There’s an obscene amount of money they have to pay for their office space and salaries. We all work in our home offices and spare bedrooms, and everyone makes a living on the advertising income we bring in. I am just looking at these huge companies that rely on a lot of VC money, and they’re unsustainable, artificial things, and they’re going to die off.”

If they do die off, they’ll end up in a graveyard alongside the millions of tiny blogs that have shut down over the past decade as users migrated to social platforms like Facebook, Twitter, and Pinterest. Sure, some will find homes on Medium or Tumblr, but many bloggers these days don’t feel the need to go beyond the 140 characters afforded to them.

As for the remaining holdouts, those writers who continue to pen screeds at their own obscure web domains, bloggers like Frauenfelder and Beale will continue to scroll through their feeds looking for the nuggets worth featuring to a larger audience. “At some point I just really realized there aren’t very many independent blogs left,” said Beale. “The more obscure ones that I subscribe to on RSS, they’ll just suddenly announce that they’re stopping and can’t do it anymore.”

How it Relates to My Business Philosophy

Although I began Psych Central in 1995 — before any of these others sites were online — I didn’t focus on the site as a full-time concern until 2006. That’s when I realized enough advertising revenues to cover the costs of running the site and pay myself a salary. That’s also when I realized that the various startup worlds I was immersed in for the previous decade were also a lot of horseshit.

Too many startups don’t think small first and build upon initial, tiny successes. Instead they think big — world-changing, even! — and then go out to VCs to raise funding. I think this is a fundamental mistake too many founders make. You don’t have to change the world with the next Facebook. Because chances are against you — 1,000 times over — and you’ll likely fail.

Instead, disrupt one tiny part of with your idea, product or service. Bootstrap the heck out of it with whatever you can beg, borrow or steal. Prove there’s some traction, some “there” there. That people you don’t know are truly interested in your idea and want more of it.

Here’s some things I learned about online startups in my business experience:

  • You don’t need fancy office space to work with a group of people; any office space will do (even shared space, or heck, even somebody’s home or apartment). The importance of company culture is largely a myth and won’t much affect your business (unless you regularly hire bad people).
  • Don’t spend too much time worrying you need to keep everyone together during working hours in the same space. If you trust the people you hired, you can trust they’re going to give you the work they promised to do. (If you don’t trust the people you hired, that suggests a whole other problem with your management style.)
  • Spend early money on the things you absolutely need to get started, like computers for people to work on if they can’t use their own to start off with. Don’t spend in on complicated infrastructure, hosting services (like dedicated servers), or over-engineering everything at the onset.
  • Design for traffic or popularity, but build quick and dirty to get version 1.0 of whatever it is you’re doing. If you’ve designed things properly, your code should scale with little problem if and when the traffic comes.
  • Do not over-build. I see this all the time in startups — money wasted on engineering the “perfect” product for millions of concurrent users. Most startups never get anywhere close to there.
  • Don’t be too quick to go out to raise money. If your product or service rocks, let it prove itself with your prototypes or beta versions. Get some customers using it and giving you actual, real feedback. Don’t forget to ask them what they’d pay for it.
  • Freemium is a bad business model unless you know whatever the add-ons you’re offering are absolutely going to be critical to some of your customers. Look at existing businesses to understand the wide breadth of working business models. One of Twitter’s most difficult challenges is finding ways to monetize their customer base — something they never gave much thought to in the early days. (Hint: they should have.)
  • Be quick to fire people who aren’t working out. Too many founders spend way too much time keeping the wrong people doing the wrong jobs in their company. It’s easier to fire someone early on when you’re still getting acclimated to one another when it appears their skillset (or personality) don’t mesh with your immediate needs. (Don’t keep someone around for “future-proofing” — the job market is always robust enough to find another new hire when the time arises.)
  • Give people what they need to be successful, then get out of their way. If you’re spending half your day looking over your employee’s shoulders, you’re doing it wrong. Completely, utterly 100% wrong.
  • Don’t just work with other smart people, but work with other smart partners too. Look for firms that mirror your company’s way of doing things, and find ways to work together. Not every partnership needs to or should involve money changing hands. You’d be surprised at what some companies are willing to do if you just ask.
  • Connect and keep connected with other smart founders like yourself. There are plenty of social networks for just such things.
  • The consumer market is so much larger and harder to crack (because of its size) than the business market. B2B concerns have always been easier and more likely to be successful than consumer-facing services or products. Go into your idea with that in mind — is there a way to focus on businesses instead of consumers?
  • Don’t lie or “stretch” the truth. I can’t tell you how many folks I’ve met in leadership roles who would out-right lie to their employees about the future of a product, service or the company itself. Employees just want the truth, even if it’s not pretty. If it means you might lose one or two as they search out other jobs (e.g., if the money is running out), that’s the cost of doing good, ethical business.
  • Please don’t let your business idea by “Facebook, but for…” or “Facebook, but different because…” If you’re skating off another person’s hard work and idea, you’re not likely going to get very far. Remember, even Google couldn’t build a social network that could compete with Facebook.
  • Get a mentor or adviser and listen to them; but don’t do everything they say or suggest. You still need to make a judgement call about what’s going to work for you, in your particular situation.

I don’t pretend I know much of anything about business, but these ideas have helped me in starting and running my online business. I’ve seen too many startups spend money — significant amounts of investor’s money — on things that don’t matter to the success of their business (like Class A office space in the best building in the city). Or started with no idea on how they were going to monetize the idea. I run away from such startups now. You should too.

Make America Great… Again?

So next time you’re at a Donald Trump rally (seeing as he’s running for President of the United States in 2016), ask him this one simple question:

If America isn’t the greatest country in the world, who is?

I would argue, and I think it’s a pretty easy argument to make, that in virtually all the ways we measure success as a country, we are indeed “great.” And I’d go one step further and say that, at this moment in history, we remain the world’s greatest country. To live in, to work in, to express oneself freely, to practice whatever religion you want (or, increasingly, no religion at all).

I find it odd that people resonate with the message that America is no longer a great country. Who is? China? Really?!? Russia? Umm, no. The UK? I love Brits, but there’s a lot more things wrong in Britain than here. Is Canada the world’s greatest country??

Seriously, I just don’t get it. As a statement of fact, it makes no sense whatsoever. And it suggests an underlying inferiority complex. Which you get into even more when you listen to Trump’s campaign speeches.

We have the world’s greatest military that’s been modernized and reorganized to better respond to the kinds of wars we’re now fighting. If you combined the next 8 largest militaries in the world, it still wouldn’t be large or good enough to take on America’s military. Yet Trump claims — with a straight face, no less — that it is in shambles and needs even more money thrown at it. (This despite the fact that we spend more on our military than any other nation on earth.)

He wants to build a wall along our Southern border to keep out illegal immigrants, turning America into a place with walls. Reminds me of Berlin in the 1960s. Or a prison. This is your thoughtful, nuanced answer to America’s immigration concerns? Remember, too, that immigrants take all the jobs Americans don’t want and no longer do… much of the food service industry and agricultural industry — who do you think works the fields these days!? — is done by immigrants. If there was an easy way for immigrants to come into the country just to do these jobs, I’m pretty sure they’d take it. But since we put up so many paperwork barriers to allow for proper legal immigration from Mexico, we have an illegal immigration problem.

America is great. If you’re a citizen of these United States and think otherwise, please point me to the data — not hyperbole or fear-mongering — that demonstrates how bad America is as a country. I’d love to hear it.