Thursday, February 14, 2008

Time for Aussie 2.0ers to Hitwise up

Ben Barren broke a blogging silence of three months today with an uncharacteristically lucid mini-essay detailing his thoughts going into the fourth year of Feedcorp, the business he started with consiglieri Michael Corleone but which is now headed by Pete Burley. Ben pledges to concentrate more on Gnoos, something which I have been urging him to do for some time now (perhaps too pushily?). Judging from the numbers he mentions obliquely in his post he seems to be doing okay with Feedcorp's hired goons strategy.

The Australian corner of the industry is doing just fine. We're in our fourth year (first lines of code on 27 October 04) as is Feedcorp, and Cameron Reilly noted that The Podcast Network officially turns 3 today too. TPN is going gangbusters according to all reports. Norg Media is expanding to new cities, Scouta TV is doing deals, Tangler is growing with a new CEO as well, etc etc. We're already running at over 100% year-on-year growth on last year's stellar traffic figures for FanFooty, and with yesterday's launch of a $5,000 fantasy competition (using all our own money) called Lethal League we should have an awesome 2008 where the growth of Tinfinger will be gravy, not our staple diet.

Notwithstanding the recent bad news about Omnidrive, there doesn't seem to be a lot of negativity in the Australian Web 2.0 community. It's all systems go from my perspective. So is the gentle backhander that Ben delivers to his peers warranted?

Knowing how hard it is to do (build a valuable company that creates more dividends individually than a job/freelancing etc or is acquired etc + being able to scale/keep your site up/pay bills/keep investors happy etc) I only feel empathy for the other Aussie startups trying to do it locally, but I wouldn't say I'm too optimistic on the likely 'home runs' with far too many consumer only/google ads/low cost plays, that are still pet projects not scaleable businesses.

This is a longstanding, if cheerful, debate that I've had with Ben: me on the side of sacrificing short-term profitability to spend long hours of drudgery building your own IP, him on the side of getting some B2B moolah while the getting is good from dumbshit oligarchs who need Remora 2.0s to sandblast the barnacles off their rotting underbellies. At this stage I don't doubt his numbers would most likely trump anyone else's in pure turnover terms (save for Atlassian, but they shouldn't really count in this context as they're on another plane already).

When it comes down to it, I don't see any approach as being "wrong" unless you fail, as it appears (from admittedly second-hand hearsay) that Nik Cubrilovic has done, sadly. From the sounds of it Nik just ran out of money, which is a win in my book for the "low cost play". Some business concepts have a greater ceiling than others, but then again the higher the ceiling the greater the potential for a GEMAYA player to lay the smack down, as Google recently did to Topix (and maybe Gnoos as well?) by adding local search to Google News.

I remember sitting down with Ben after a speech he gave last year and discussing the Hitwise model, which is to build a limited-growth business first and then use the solid cashflow to fund the slow-burning development of the "home run" concept. That is what Ben has done with Feedcorp, where his outsourcing work is the Sinewave equivalent and Gnoos is his Hitwise. In my case, FanFooty is the cash cow and Tinfinger is the home run, although FanFooty is obviously on a different level to Feedcorp in terms of revenue. I think this is the most likely strategy for successful Australian Web 2.0 ventures, because the first business not only gives you funding, but also the experience and confidence which are invaluable in making the second, harder concept work.

I look forward to seeing what Ben does with Gnoos in 08, and after launching Lethal League yesterday I will now be getting back to Tinfinger. I've given myself and Tai until October to make a living out of it. Next one to run out of money is a rotten egg! ;)

3 Comments:

Anonymous Anonymous said...

(Anonymous for fear of the Aussie web 2.0 mafia)

If Nik ran out of money it's his own fault for not doing business development properly.

I know he had businesses trying to do deals (not tiny stuff either) but emails didn't get returned etc etc. (I know, because I tried to get a deal going).

It's a pity, and I hope he'll learn from it. I fear that the Aussie way of dealing with failure could be a problem (ie, if you fail no one will talk to you - compare that to Silicon Valley)

9:57 pm, February 14, 2008  
Blogger Paul Montgomery said...

I don't know that no one would talk to Nik... he seems to be the one not talking to anyone. Obviously if there are people who lost money or data or a job due to Omnidrive's problems then those people would have the right to hold grudges, but why wouldn't anyone else talk to him?

I'd like to think we're a community, not a mafia.

12:15 am, February 15, 2008  
Anonymous Susie said...

I don't like the use of the term fail. I think its a bit harsh and bad for other startups thinking. There may be a reason for moving on other than failure...

Failure as used by many can lead to big learnings and very big new business ideas.

I don't think someone can underestimate the pain of a business failure...really it could parellel with a divorce.

Anyways, I'd just like to suggest we don't use the word failure- it seems so F at school. Maybe we should change our thinking and stop using the terms such as hard for startups... hm...

2:27 am, February 18, 2008  

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