Monday I wrote an entry concerning the struggles a small company goes through when the decision of taking VC money must be made. Today I would like to talk about all the craziness that is starting to occur around us and why it worries me.
It started with Yahoo! acquiring Upcoming.org and then AOL acquiring Weblogs, Inc. and finally Verisign purchasing Weblogs.com. I seem to recall this type of craziness happening before and a lot of people promising themselves that they wouldn’t allow it to happen again. Well I fear the bubble will be much stronger this time around and its burst will be even more damaging because many of us really did believe we learned from our mistakes the previous time.
We are at a point where everyone has an idea that they feel will succeed and earn them a significant amount of money. However, what’s the gameplan if that doesn’t happen? Impossible right? Any idea can work in this type of environment and that’s why everyone starts a blog network. If WIN can be bought then surely anyone who decides to launch a network with over 10 sites will have a chance to be bought…
When I had the idea of the 9rules Network in my head I got really excited, not because I thought it would make me rich, but because it had the potential to leave an impression on the web. I know many outsiders are still skeptical of what the Network is and that it just a club of sites. Because of the Network some writers have received greater exposure and others have acquired new jobs. New friendships and partnerships are being formed on a daily basis that more than likely would never have occurred if the Network didn’t exist. Cheesy? Possibly, but if there ever is a crash, I know this idea will still be around and running on all cylinders.
But what does 9rules, Inc. get out of all of this? We get to be right in front of almost over 100 (and growing) influential sites on the web in many different categories and now two languages. We have developed relationships with each and every site not by trying to sell them anything or making false promises, but just because we have put them first. How many companies have the opportunities that we now have?
A couple of months ago if you would have asked me whether or not I would have taken funding for this company I would have responded by telling you that is the wrong question to ask. The real question would’ve been whether or not a VC would have had the patience to allow us to build these relationships first before we moved on to making them money. I don’t think any of them would and I think that is a very good thing because it means the idea of the Network should be around in any type of economy and environment. Not just the ones that get people giddy.
If you have ever written a business plan or talked to an investor you know that you are expected to come up with an exit strategy for your company. Although a very good idea for a lot of companies, I hate trying to come up with one for just the Network. When I look at the big picture of what 9rules, Inc. is going to accomplish I can see an exit strategy, but for just the Network I would like to think there is no need for one. Even if all my partners left me because they are tired of me not brushing my hair, I would like to think that this Network that we have built can still stand on its 100 legs.
Idealistic? Yes. That’s just how I work at times.
So what happens if a company comes up to me and offers me 8 or 9 digits for everything that we have created? That’s easy, I take the money, but it would be much easier to create a couple products and services where I don’t have to worry about that exit strategy occurring and that’s the path we are about to take.
So Why Are You Worried?
Because AOL paid $25 million for 31 blogs in which only a couple should be considered quality and Verisign forked over around $2 million for a pinging service. Not the only one on the web, just the one with the weblogs.com domain.
Well I guess I shouldn’t be that worried because this just means that if you create a quality product that is useful to many people you should do just fine in the future. Isn’t that how it always is though?
Originally posted on October 7, 2005 @ 11:10 am