In response to Luke Gedeon’s point-by-point comparison of CrowdVine and Ning I put my own explanation of when and why CrowdVine comes up on top CrowdVine blog. I think it’s a good explanation of the state of the social network software market because the truth is that Ning and CrowdVine rarely compete for customers.
I recently started seven straight work days with phone calls to Europe. That was a little jarring at first but made some sense because we’d just run successful networks for conferences in London and Berlin. What took me a little longer to figure out was how little pushback I got on prices. The conversations we’re all about whether it was a good fit, not whether they had budget available. At first I thought it was just a different style of negotiation. But then I realized that with the weak dollar our prices are extremely cheap.
That’s a good thing when you’re trying to bootstrap a business. I’ve often wondered if it would be easier to start this business if I lived in Brazil (my aunt has an apartment there) where costs are low but continued to sell to the US where prices are comparitively much higher. Lucky me: I found the exact same dynamic living here and selling to Europe.
I’ve been wondering if other small businesses are on to this trend. Apparently, yes. Marci Alboher (who interviewed me for this NY Times piece on small business blogging) published an article in today’s small business section: Weak Dollar Has Small Businesses Thinking Globally.
The main reason CrowdVine has been so against taking investment or debt is because as programmers we think it’s more rewarding to run an independent company than to run a company that’s dependent on VCs or credit card companies. It wasn’t all personal preference, a lot of trends were pointing this way. Cost of development went way down. So did hosting, hardware, and bandwidth. And now there’s an entire continent of wealthy customers.
Not everything about the weak dollar makes me happy. I’d like to travel in Europe for example. But it is an opportunity for small business, and that’s fine by me.
Hey you! Nominate CrowdVine for the Crunchies under best boot-strapped startup. Then read on the CrowdVine blog why we don’t call ourselves bootstrapped.
We just launched our new product, CrowdVine for Conferences. Here’s the official announcement where I try to explain the product in layman terms.
We’ve done six conferences now through our professional services (that’s where we do everything from setup to community management): Web 2.0 Expo Berlin, MX East, Future of Web Apps / London, Foo Camp, Maker Faire Bay Area, SoCon.
And we’ve had people setup regular CrowdVine networks for BarCampBlock, IDEA 2007, Ignite Boston, and PodCamp Atlanta.
Our new CrowdVine for Conferences service is just making official something that we’ve known for awhile now: CrowdVine networks are a great replacement for the traditional printed attendee list. They let you put names to faces, find out real information about people, and then get in touch with the people you want to meet.
From a conference organizer perspective, more networking means a more valuable conference that attendees are more likely to return to. Plus we’re able to pull out information to help make the next conference even better, information like which topics were attendees most interested in, which speakers were most popular, and which attendees acted as connectors who made the conference better for everyone.
If you know conference organizers or you are conference organizer, please make an introduction.
We’re getting ready to launch a CrowdVine network for Web 2.0 Expo Berlin. I was at their fall expo in San Francisco and thought the sessions were excellent (That was also the first time I got to speak as founder of CrowdVine). This Berlin conference seems similarly great.
The CrowdVine network should be a big boost to the lobby-con experience. We’ll also have icalico integration so you can do session calendaring.
One nice thing (for us) about this network is that Jen from CMP used the software at FooCamp and then recommended it for this conference. That’s a nice vote of confidence!
Back in August, we took on two clients who wanted to use CrowdVine as the platform for a more customized site. Today, the first of those, Bad Online Dates, launched. Bad Online Dates is the topic, not the offer. The CEO, Jennifer Kelton, is an author and speaker on the topic of dating. She came to the conclusion that profiles on existing sites were too conducive to lying. You’re asked to spin a compelling story about yourself, which can help sell you, but also prevents anyone from getting a true sense of who you are.
Jennifer’s idea was that you could change the dynamic by asking a different question, “What are your bad dating experiences?” By reading people’s stories you can get a real sense for who they are and what’s important to them. Thus Bad Online Dates.
She was right. Here’s an example of a guy who insisted on paying for the date but then complained about every cost, picked a restaurant because he had a two-for-one coupon, and then paid for dinner with a roll of quarters. It’s a good story, but read it while trying to judge whether you’d go on a date with the author. On a traditional site she might describe herself as unpretentious and you’d have to take it on faith. I read the story and agree, she is unpretentious. However, maybe you’re the kind of guy who struggles to make ends meet while still wanting to shower affection on the ladies. You might read the story and think she’s stuck up. At least you have something honest to work with.
Also, the stories are funny.
One last thing, I didn’t do any of the work. Jay built the customized features. He’s the man. Neatworks did the design. And our friend Leona is handling online PR/Marketing. Jennifer is a marketing machine. She’s on Playboy radio right now and seems to be on TV or radio almost every day. That’s tied for my favorite part about this project, working with someone who’s so passionate.
We’re doing a CrowdVine social network for Adaptive Path’s MX East: Managing Experience through Creative Leadership. The MX East conference is for VPs, directors, and managers involved in product strategy, product development, service design, or design management.
They’ve put together a pretty cozy conference with a great location and great opportunities to mingle with other speakers and attendees. There’s still time to register.
Dates and location: Philadelphia, PA — October 21-23, 2007
Business Innovation Factory put on their annual Collaborative Innovation Summit this week in Rhode Island. For two days some amazing speakers told stories of innovation, highlighted by Walt Mossberg and Mark Cuban on stage (no dancing).
CrowdVine was there, running a social network for the conference. This is the first time we’ve used CrowdVine for a non-tech conference and I’m proud to say it worked great! We’re not just for geeks!
Congrats to the entire staff for putting on such a great conference.
In Seattle this Friday? You should try to get an invite to the Thingamajiggr party, co-hosted by O’Reilly Radar and Waggle Labs.
“Hacker Magic Show”, mobile phone Werewolf game, John Kao opening talk, special geek art on display, and more.
Also, check out who’s going in the CrowdVine network
Interesting posts from Paul Graham and Fred Wilson about the trend of decreasing software development costs leading to lots of people starting companies. They tend to focus on the impact on the VC world (because they’re VCs). I’m interested in the impact on founders.
From what I can tell by living and working in the bay area, the assumed life cycle of a startup goes like this:
You have an idea, you turn that idea into a compelling elevator pitch, then use the pitch to raise a seed round of investment so that you can build a prototype. Then you raise another round so you can build it to a point where it might actually attract and support customers. Then you raise another round to build up your infrastructure because you’re about to get heavy traction. Hopefully you’ve sold by this point. If not, you raise another round of funding so that you can build the company into a real business with actual revenue. Hopefully someone buys you soon because there’s no way your new revenue is going to cover your expenses. If you somehow ended up with a profitable business and no one has bought you, then you IPO.
My experience building CrowdVine is that the drop in software development costs and the increased availability of low-cost
infrastructure turn the above idea on its ear. Here’s how I’ve experienced it.
When I started CrowdVine I avoided investment for three reasons. I felt that venture capitalists weren’t aligned with my goals as a programmer. I didn’t need money because I thought I could build everything without help and because I had a few small contract gigs that paid the rent without sucking up all my time. Also, nobody was offering me money.
Plenty of people have noted that the goals of VCs and entrepreneurs don’t always line up, but at least they draw from the same motivational well: financial gain. As startup costs drop you’re going to get more founders who aren’t primarily entrepreneurs, they’re primarily do-ers (programmers, designers, etc.) A lot of them are going to have different motivations. Mine are, in order, pay the rent, build something, make that something wonderful, and get positive feedback. My motivations never line up with investors in the seed stage. They only line up later if I build something wonderful that lots of people want and delivering it to lots of people requires upfront money.
If you’re founding a company but you’re not capable of building the product yourself, then you’re not taking advantage of the trend. Software development got cheaper but communication didn’t. Pure idea/sales/marketing founders are losing value against founders who can build their own product. The wave of new founders will have only one early expense: cost-of-living. If they’re not capable of supporting themselves with contract work then they’re either too young to have the right contacts or they’re not going to do very well building a company that can support themselves (so they may as well get Venture Capital involved right away). Paul Graham’s Y-Combinator program seems smart to be targeting young entrepreneurs who aren’t necessarily ruled out for having founder-type qualities but also don’t have other good options.
The reason nobody offered me money is because I didn’t go around asking for it. All the VCs expect you to put together a power point deck, drive to their office, and make a pitch. But none of that plays to my strengths. The problem is that I didn’t know very much about what the company was going to do and I’m not good at hyping something that doesn’t exist. I think a lot of programmers are essentially realists and don’t like making promises about vaporware. The Y-Combinator program has started to emphasize the qualities of the founders over the quality of the idea. That seems appropriate. At the seed stage, engineer founders need VCs to remove a lot of the funding friction in order to even get to the point where venture funding is a choice. The only way I would have had the option to take seed funding is if CRV (the Odeo backers) approached me and said, “Heard good things about you from the other Odeo folks. Looks like you’re going out on your own. I can give you $250k if you promise to come back and demo a product for us in six months.” If they needed me to be convincing about the idea then there would never be a deal.
CrowdVine now has enough revenue to pay the salaries for two people (plus some). We’ve identified a market that looks promising (conference social networks) and we’re making headway in that market. Also, Jay and I are happier than we’ve been at any other job because there are no barriers to building software for people that are going to give us positive feedback.
Now we’ve got to polish the product, create a repeatable business process, and get a consistent revenue stream that extends past the end of the year. We’re lucky that revenue is already well above costs, so we have spare cycles to build the business. If we had gone with an ad or subscription supported model we might have a ways to go until revenue caught up with costs. In that case I’d be hesitant to continue to support the business with unrelated consulting. It’s unfair to your customers who are expecting your full attention.
We had a brief period of this which we solved with CrowdVine related consulting. We built two customized social networks based on the CrowdVine platform. Jay seems to like this work, so we’ll probably continue to do more.
We could also ditch the consulting and look for a seed round, although I still don’t think my interests are aligned with
the interests of venture investors.
Hopefully we manage to get our product out of beta, build a repeatable business process, and attract a steady stream of customers. Our margins are good so it’s easy to grow slowly. However, we have a pretty big gap between contacting a customer and receiving revenue (let’s say six months). So if we wanted to grow quickly we’d have to find a chunk of money in order to hire a bunch of staff. The company would start to need skills that I don’t possess (like managing a sales force) and would need those skills quicker than I could learn on the fly.
In the current venture capital structure, this is the first time where taking investment starts to make sense to me. Our interests are roughly aligned (we both want to grow) and they have things I want (money and advice). However, there’s two other good options.
One option is to leverage the money from our conference business to build fully automated subscription or ad supported businesses. 37 Signals has several profitable subscription sites that don’t seem to take a lot of their time. They get growth because each site continues to grow and because they have enough spare cycles to roll out new products without hiring a bunch of people. They also started out doing enough consulting to pay the rent.
The other option would be to reject massive growth in favor of running a small company that’s great to work at. I wouldn’t call this settling. Maybe this is the Adaptive Path model. Despite selling every single product they ever built (one, to Google), they seem to have refocused on building a highly respected design and usability firm. I’d be pretty lucky (and thankful) to have what they have.
There’s a common perception in the startup world that all great visionaries and developers have short attention spans. This is bullshit. Linus Torvalds doesn’t have a short attention span, or at least not one that makes him switch projects every two years. Venture capitalists do have short attention spans, maybe for personality reasons, but definitely for institutional reasons. My attention span is at least ten years (proven three times now) so I’m pretty sure that any venture backed competitors aren’t playing the same game I am.
If we take any investment we’re going to have to commit to an exit strategy that is either to be acquired or to go public. If we don’t take investment money then we don’t have to consider either option. In fact, sale changes from an exit strategy to a sustaining strategy. If we end up with something that’s valuable but we’re tired of running, then it can be sold. The Ebay market for startups seems to price these sales in the hundreds of thousands of dollars, not the hundreds of millions.
In the 37 Signals model, it looks hard to sell any one product because there doesn’t seem to be any person who owns any one of the products. However, if you setup the products so that each one has a clear GM/CEO-type then you can sell that product without giving away the entire company. Obvious seems to have gone down this road with Twitter. Ev is the CEO of Obvious and he spun Twitter out as it’s own company with Jack as the head. Jack is the man that makes Twitter run and if
they ever sell that company then he’s the one who’s going to join the acquiring company. I’m sure he also has ownership incentives that would make him agreeable to sale. I think of this as the Buffet model for structuring a company: find managers you trust and then give them incentives and authority to run.
I don’t have any exit strategy. I like working and having my own company has been an excellent excuse to work more. I think the most valuable thing I could build is a company that I’d want to work at for the next fifty years. I recognize though that not everyone is going to want to spend fifty years working for me, so I’m looking for people who I trust and who have the initiative to some day run their own businesses. My hope is that this company can give people room to grow so that they can eventually run businesses within it. Cheaper software development means that a lot of “businesses” could be run by a single person. Maybe Jay will be running our consulting division next year.
There’s a pretty big risk that the company doesn’t grow at all. If we were venture backed we’d have to start flailing until we ran out of money. If I was purely a businessman, I’d have to walk away or start over. However, I’m an engineer and running a two (or even one) person company still fulfills many of my motivations.
Since I built the company without debt, I consider the risk of going out of business to be roughly equivalent to the risk of having an extended streak of unemployment. I don’t have a fortune 5000 company that’s committed to pay my salary, but I do have a much better skill set than I did a year ago (I did a lot of programming) and I have a product that I can leverage for consulting work. I predict a lot more of these startups turn into small businesses that stick around.
IDEA 2007 joins BarCampBlock and PodCamp Atlanta as conferences that set up their own CrowdVine network to help attendees meet and mingle. Looks like it was a huge succes and thank you Greg Corrin for taking the time to set it up for the conference.
One thing I noticed is that people used blog posting to organize after hour events. This is something that used to happen (poorly) on a conference wiki. We’ve already killed the Who’s Coming page – it’s a lot more effective to browse a directory of people in CrowdVine where you can see their pictures and actually have a way of making contact. Nice to see another aspect of the old conference wiki get shot down.
Jay added OpenID to CrowdVine two weeks ago. I’d wanted to hold off until the libraries and UI kinks got worked out. But when we noticed that Simon Willison, one of the FOWA conference chairs, is an OpenID fan we decided we better include it as a feature of the FOWA CrowdVine.
It was a pleasantly surprising experience.
The last Future of Web Apps was one of the best conferences of the year — great speakers and great attendees. This year Ryan and the crew over at Carson Systems have committed to super sizing the event. The speakers are huge. The attendees are awesome. And they’ve brought in CrowdVine, Pathable, and icalico to make sure the social aspects are top notch.
Check it out: fowa.crowdvine.com
CrowdVine provides the social network so people can connect before and after the event. Pathable is providing their social matching analysis and badges, and a text-messaging coordination service. And icalico is providing a social session calendaring feature so that you can mark the sessions that are interesting to you and see which sessions are popular within your network.
It’s based the work we did for Foo Camp. We added much better design customization. The contact model is new. Rather than marking contacts as friends (what does that mean in a conference setting?) you can mark fan or want-to-meet. You can finally control email notifications. The Pathable and icalico integrations are tighter. We’ve got OpenID. Basically, we’ve made boatloads of improvements.
It’s not too late to get passes if you can get to London October 3rd-5th.
Thanks to the FOWA staff for choosing us (and to Scott Berkun who put us on their radar).
The readers of BusinessWeek have voted CrowdVine Best of the Web in the Social Networking Tools category. We’re slide 18 in the Readers Choice section. Thanks BusinessWeek readers!
Here are a couple of nice reviews of CrowdVine, including two by TechCrunch. Most people think the service is simple and easy to use. That’s great. A lot of competitors are tackling this space by creating social networks with loads of features. I want to do something simple that’s easy to combine with other services. Chris Messina called that “Small pieces loosely joined,” after combining CrowdVine with Pibb and PBWiki for BarCampBlock.
Roll Your Own Social Network with CrowdVine
9 Ways to Build Your Social Network
Setting your own network is dead simple. You just need to pick a name, pick some profile questions, and then send out invites with a personalized message. You network is hosted at name.crowdvine.com Profiles consist of a photo, location, personal link, description, blog posts, and the questions the creator of the network chooses. Members can also incorporate RSS feeds from another blog, photo stream, or social bookmarking site.
CrowdVine.com — Create Your Own Social Network
There are many reasons to create a network and with CrowdVine.com creating a network is easy. The homepage takes you through three easy steps. First design your network, basically choose your color, there isn’t a huge choice with designing your network at the moment. Then choose your profile questions, this is where you make your network unique, deciding what questions will be in your profile.
Facebook? Why Not CREATE YOUR OWN Social Network?!
This service is pretty straight forward to set up [and] is much less complicated and cleaner [than other sites].
There are no annoying Google Ads placed on the interface, and the simple way people can set up and place their information in their profiles will be appealing to even the most non-tech savvy group out there.
When I started working for myself I made a conscious decision to trust my gut. If it was the opposite of what other people were doing but my gut gave approval, then I’d do it.
For the most part that’s worked out great. I love owning a profitable business. All my options are open and that’s because I built it without investors or debt. Around here everyone is taking investment, going into debt, or building products with no revenue. Not all of those people end up happy.
One gut decision that didn’t turn out well was choosing a hosting company for CrowdVine. Everyone told me to go with ServerBeach but I chased some minor cost savings at CalPop and ServerAxis.
CalPop was awful the first month with lots of downtime. Lately they’ve just been a little disorganized but basically functional. I still host RateMyDanceMoves there but couldn’t trust them for professional work. Then I tried ServerAxis because they had a cheap VPS with 4GB of RAM and the underlying server was on RAID giving my data an extra dose of protection. A month later their hard drives crashed and they lost everything (I only lost a little bit of work). It took me five emails to get the complete story. Thankfully I never had a chance to host CrowdVine there.
Now CrowdVine is hosted with ServerBeach. I love them. I wish I’d made this decision a year ago. (BTW, you save $100 and I get $250 if you sign up with this code: U7S59BJ6R3)
Here’s the difference between the two decisions. A lot of people complain about taking investment or about dealing with debt. I haven’t heard anyone complain about ServerBeach. From now on I resolve to take glowing recommendations more seriously, even if my gut says otherwise.
Coolness. Last night Tara Hunt invited the BarCampBlock participants to join a BarCampBlock CrowdVine network to do some pre-event networking.
BarCampBlock is this weekend (Aug 18/19) in Palo Alto. I’d go but I’m the minister for my sister’s best friend’s wedding and this weekend is the Vegas bachelor party.
Also, I’m pretty sure we’re going to do an icalico integration for this one.
Fred Wilson’s Time Is On Your Side, Yes It Is is a nice take on how many successful startups ran like a marathon and not a sprint. Starts with this quote from Marc Andreessen:
“Time is (in my opinion) the hugely unappreciated and unanalyzed part of the whole startup experience.”
A big part of why I built CrowdVine to have revenue from the start (rather than look for investors) was because I wanted to surround myself with people who took the long view.
This was also a big part of the No Investors Ever! Own Your Biz. talk at Foo.
Apparently I haven’t written a changelog in this calendar year. My boss would be so mad.
vCard export
You can now export all your contacts as vcard so that you can add all your new friends to your address book. Right now the list is all mutual friends. You don’t get to see someone’s email address unless they friended you back. That’ll change once the privacy controls get beefed up. I used the excellent vpim gem for this.
OPML
OPML is a format for (among other things) sharing a list of RSS feeds. Many feed readers let you import a list of new feeds to follow in this format. CrowdVine now exports OPML for contact list, tag page, and network. You could add a folder for everyone at foo camp or Maker Faire. Found two excellent sites for icons and validation
Cool Networks
I already blogged about Providence Geeks. I’m also psyched that Terrie set up a network for her Citizen Science Projects community. That’s where citizens like you and me are recruited to collect data for real scientific research. I’d love for one of these people to take me out in the field.
Customers
I want to build software according to my sensibilities and standards so it’s been very important to me that I keep the business privately owned and get to profitability as soon as possible. Good news on that front, I’m profitable through the end of the year (as in my rent is paid) and even close to paying a portion of someone else’s rent. CrowdVine is providing the infrastructure behind an exciting new business that’s launching at OSCON. And after our extremely successful Foo Camp experience, Pathable and I are teaming up to tackle the conference market.
I love the way my friend Brian Jepson is using social software to organize a Providence Geeks community.
They’ve got a blog, a job board, a flickr pool, and now a crowdvine network.
When I lived in St. Louis I thought I had to move back to the bay area in order to connect with a passionate tech community. Brian’s showing that a little software and a little effort can turn a few people into a strong community.
A blog by Tony Stubblebine, holder of the following opinions: