FOWA: How to Turn your App into a Business (Ted Rheingold) [en]

[fr] Notes prises à l'occasion de la conférence Future of Web Apps (FOWA) à Londres.

*Here are my live notes of [Ted Rheingold](http://dogster.com/)’s [Future of Web Apps (FOWA)](http://www.futureofwebapps.com/) session. They are probably incomplete and may contain mistakes, though I do my best to be accurate. [Suw also blogged this session.](http://strange.corante.com/archives/2007/10/03/fowa07b_ted_rheingold.php)*

*Blogged Ted earlier this year at Reboot when he was encouraging us to [learn about cats and dogs](http://climbtothestars.org/archives/2007/05/31/reboot9-ted-rheingold-learning-from-dogs-and-cats/).*

Simple idea: let people make web pages for their dogs and cats. Realised later that this could actually be a business.

FOWA 2007 64

What does it take to be a business? Suddenly all sorts of words like CTO, CEO, Incorporating, Titles… start flying around.

But mainly, being a business is about **generating revenue**, or at least having a pretty good idea where it’s going to come from. If you don’t have an idea how you’re going to make money, you’re going to run out of money.

Important: don’t think there is a new economy. There’s new technology, but **the economy hasn’t really changed**.

Dogster and Catster make money from advertising, partnerships, people subscribing… A lot like a magazine. Virtual gifts. You’re maybe disrupting the economy, but not creating a whole new one.

**Learn your market.** It took Ted a long time to learn these markets. You can’t pretend to know where the advertising goes because you’ve read magazines. Also, get ready to learn other markets. Ted thought at some point they were going to do classifieds, spent a lot of time trying to figure it out, but nobody was interested in their classifieds, so that failed. Don’t get overly attached.

**Get advisers.** People who understand the industry you’re in. But also people who understand how to run a business.

**Learn business finance.** Know how much money you need to spend, etc. Forecasting expenses, revenues. Some of these things are actually pretty basic, but you need to be comfortable with them. Don’t spend any money you don’t have to. If you’re cheap with your employees and your contractors, they may leave (*steph-note: indeed!*), if you’re cheap with your hosting your site might go down, if you don’t trademark your logo/names…

**Sell, sell, sell.** Ted is a designer, not a salesperson. Nobody is going to sell your business for me. Everything changed for Ted when he brought in a business partner. (Not an employee!) Important to choose well. It will be years of partnering with that person, startups don’t usually get bought. You need somebody who is as passionate as you are.

**Make your business a business.**

Very hard to make money on AdSense or that kind of advertising unless you’re serving millions and millions of pages. Sponsors and partnerships are more viable. Even a small market is interesting if it’s targeted. Subscription: emotional thing. Be part of the team. To show their support.

*steph-note: lost some of the Q&A because of running around with the microphone.*

Fail fast. They just removed classifieds three months ago. Important to see if the changes you’re thinking about are really worth it financially.

Q: when did you decide it could be a viable business?

A: thought it would be a kind of passive business where he’d get a check every month from advertising for a bit of maintenance here and there. Month 3, 10’000 people joined the site. A lot! Way more than he thought. Used the wisdom of his crowds to think about it, and then sat on it for a while before making the big decision. Making sure people are using it and spending as little money as possible the whole time.

Hiring is a real pain, specially if you want to be ethical about it (don’t want to hire somebody and lay him off three months later).

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Reboot9 — Ted Rheingold: Learning from Dogs and Cats [en]

*Here are my notes, unedited and possibly misleading, blah blah blah, of the Reboot9 conference.*

Dogster-Catster case study.

Home page of Dogster: web designers like Ted hate it (it’s a mess) but the dog people love it — they just click on the dogs.

Ted Rheingold

People copy-paste and personalise their cat/dog pages.

Forums: not as good as the best forums out there, but made to reflect the interests of people using the site. 5000 forum postings a day. People can organise events. Groups. Looks kinda crappy but the users don’t care.

Catster videos, commenting. Endless features. 1500 new members a day. (Ted shows a bunch of numbers… dizzy. 60’000 diaries/blogs.)

Lessons learnt that Ted wants to share, after 4 years.

– pick partners wisely, you’ll be married for 2-10 years. Need to talk about stuff like having kids with your partners! Partnership failures sink young businesses. *steph-note: eek! other points on slide but didn’t get them.*
– bootstrapping is good, keeping expenses manageable means you live longer, less financial constraints means more control.
– customer service is everything, from day one. Answer every e-mail, IM, phone call, resolve every problem. Without happy customers your site is just a pile of fancy server code. It’s free market research!
– develop within your impact horizon — your product must have an impact on your community within this time frame. For Catster/Dogster: 1st year, 3-4 weeks; 2nd year: 6-8 weeks; 3rd year: 2-3 months; 4th year: 2-3 months, ideally 1 month. Can’t guess that much in advance. 10 one-month features instead of 2 six-month features. More chance of one being popular.
– how do you make your money? Sponsors and direct ad buys (really hard! integrated ad campaigns); ad networks, premium memberships, virtual gifts. Bring in advertisers by encouraging them to be part of the community. They write up their stuff (less marketing goop). If you have to revert to advertising, it kind of means people aren’t that interested in the community. Ted would like to get ads and sponsors off the site altogether.

Paying members: more to be “part of the club” rather than have more features.

Circle of trust: Dogster, Community, Advertisers. Picky with advertisers. Introduce the advertiser to the community.

*steph-note: [Bagha Byne](http://flickr.com/photos/bunny/collections/72157600210295068/), my cat, has [his own Catster page](http://www.catster.com/cats/519249), of course.*

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