Yahoo! has just announced that they will be completely shutting down GeoCities later this year. I was a very early user of the service, and there are a couple lessons I've drawn as an observer over the years.
First is the danger of forcing advertising on your users. To me, this was the start of the slow decline, when the early adopters all moved on and started looking for other services.
But second is the incredible staying power of a large user base. While "all the cool kids" moved on by the late nineties, GeoCities still has an Alexa rank of 149 today, even though they've been providing a mostly sub-par experience for quite a while.
It's one of the best examples of how slowly users can evaporate once you've acquired enough of them, or in non-web speak, that people are resistant to change: once they've found a good way to do something, they tend to keep doing it that way for a while.
This is the coolest thing I have seen in a very, very long time. You need to print out a piece of paper, and then hold it up to your webcam:
Here's a fun little tip: You can open most Sentex key pad-access doors by typing in the following code:
***00000099#*
The first *** are to enter into the admin mode, 000000 (six zeroes) is the factory-default password, 99# opens the door, and * exits the admin mode (make sure you press this or the access box will be left in admin mode!)
I'm not sure how prevalent they are, but here in San Francisco, Sentex building access systems seem to be the most popular.
The emerging indie electro scene has really been doing it for me lately. It mixes the fundamental production values of electronic music with some of the more mainstream appeal of indie music, like lyrics, for example :)
One of my favorite songs is "Cold Dust Girl" by an artist called "Hey Champ" that I can't seem to find anything about (bar a few songs on the Hype Machine). Friendly Fires, who's more well known, also has some pretty cool stuff too, as well as Cut Copy.
Hey Champ - Cold Dust Girl
Friendly Fires - Paris
Cut Copy - Lights & Music
SynthaSite, one of our competitors, just released news today that they have closed a $20M round of financing. Now that this is public, I think it's very interesting to examine the difference in strategies we are taking.
We're a big fan of capital-lean businesses: those that are able to accomplish a lot with a little. They have a few large advantages: they're generally better for the entrepreneur, who maintains a larger ownership of the company, and for the investor, who sees their (relatively) small amount of capital used to build maximum value per dollar.
A different strategy, that can also be successful, is to raise as much money as possible, and then buy your way to the top. But buying your way to the top doesn't reduce all of the business risks -- it's just rolling the dice with higher stakes.
The downside for the entrepreneur, in this case, is closing doors: the option of a successful exit at smaller ranges is completely closed. In SynthaSite's case, with $20M raised and a likely $30-60M post money valuation, they will likely not be able to exit successfully for any less than $100M. Not to say that it isn't possible, just that it's much more difficult.
What's most interesting about this comparison is contrasting to Weebly's story: We raised $650k in April 2007, which brought us to profitability with a medium-sized team. Our team is very efficient. We're constantly working hard to improve the service, and we're accomplishing a tremendous amount.
In every sense, we're ahead of SynthaSite for the time being: a larger user base, more pageviews per month across all user sites, faster organic growth, and significantly more revenue. The question I would be asking as an investor in this most recent round is: "Why is there such a disparity between the capital needs of Weebly and SynthaSite?", or "Why did SynthaSite need to raise $25M to get to a similar point Weebly has with $650k?"
I've picked up a few hints here and there that the holiday season was either good or bad for various companies, so I figured I'd share our December growth:
Interestingly, our December traffic, for the most part, showed a small, slowing decline until Christmas day, when it took a dive off a cliff. Even so, revenue for December did not decline from November numbers.
It's also worth noting that the bottom of this graph does not represent 0 new users per day, but represents a sign-up rate about 40% of average.
It then ramped back up over the next few days, and recovered in early January. Towards the middle and end of January (not featured), traffic jumped way up and has stayed up, to even a bit more than we would have projected given our existing growth rates.
So I figured I'd ask: "How did your site fare over the holidays?"
I'm guilty of having made comments like this before, and I just saw another one today:
When we launched XYZ we started day 1 with a profitable, monetizable business model.
Profitability is not making $200/month, enough to cover your hosting costs. While generating revenue is exciting, you are not profitable if you are not getting paid a financially sustainable amount of money for your time. Here's a good definition of profitability from Investopedia:
What Does Profit Mean? A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity.
The ultimate purpose of any business is to generate revenue, and having a business model is much more necessary today than it was two years ago -- so bringing in any kind of revenue is exciting, and a notable accomplishment.
But saying that the business is profitable without accounting for the cost of your time is a bit of an amateur mistake, one I've made several times in the past.
Just recently discovered an interesting compilation called "Christmas Remixed" and "Christmas Remixed 2". There are some pretty sweet remixes of your usual holiday tracks, but here are a few songs I thought were particularly well done:
Bing Crosby - Happy Holiday (Beef Wellington Remix)
Bing Crosby - White Christmas (Kaskade Remix)
Duke Ellington - Jingle Bells (Robbie Hardkiss Remix)
Firefox on Linux is now effectively broken. Since installing the new Flash 10 player for Linux (which will become very necessary for everyone, very fast, due to some of the major changes Adobe has introduced that require quite a few apps, such as our Flash uploader, to be built for Flash 10), my browser now crashes every 10 page views or less.
I am fully up to date with the most recent Firefox version, the most recent Flash version, and have tried almost every trick out there to get this to work (http://google.com/search?q=flash%2010%20linux%20crash lists a few). Nothing works. My web browser is now effectively broken.
By the looks of it, this is also a fairly widespread problem. Whoever decided this software was release quality is a complete asshole, as it now looks like I'm left between choosing to uninstall Flash completely, or suffer constant crashes.
Has anybody else out there found a solution that works? I'm using FC9, Firefox 3.0.3, and flash-plugin-10.0.15.3.
I was recently thinking about the changing business model for many brick and mortar stores, like Best Buy. Where Best Buy used to be price competitive, they now charge a steep markup in-store. People making these purchases seem to be mostly those unaware of the true price. I occasionally purchase from their stores as well, when I absolutely need a physical item and can not get it shipped. Chris had the pleasure of listening to me vent about the absurdity of purchasing a $25 ethernet cable the other day.
Basic economic theory holds that competition should put downwards pressure on prices to where they approach equilibrium, and are fairly close to the cost of manufacturing. Yet this is not happening for ethernet cables. Why is that?
When you boil it down, it seems to be convenience -- you're able to purchase the physical item when you want it, and examine it before you purchase it. Going further, though, convenience doesn't only apply to in-store items.
Weebly is a great example of the power of convenience. When we started off, we heard "Oh, web hosting... that's a commodity" quite a bit. Most people considered it a "solved" problem, and quite boring. But the problem of designing visually appealing content, uploading media, and hosting web pages was far from solved, and a simple, easy to use solution gained quite a bit of traction fairly rapidly.
Which begs the question: "How do you model convenience?"
When analyzing competition, it's quite easy to model out all of the service characteristics, such as features and price. In fact, if you compare Weebly to several horribly outdated web site creators, the feature list might not look that different. The user experience, on the other hand, would be. Where Weebly shines is its simplicity and ease of use. Or, more simply: convenience.
Hopefully, someone with experience could shed some light. How do you model for convenience?
