Congrats to Joel Spolsky on getting funding from an all star team of investment bankers. Having this combination of great entrepreneurs and great VCs certainly increases this companies’ chances. But the company’s current plan seems to based on two (long shot?) assumptions both coming in:
- Stack Overflow’s success in building great content and community will be replicated to many other areas, even though so far their efforts here have failed.
- The expert content and community will one day bring significant revenue, even though so far their efforts here have failed.
Stack Exchange Sites
“Over the course of the 6 months we have found a lot of successful sites have gotten created, my favorite is mathoverflow.net for PhD level mathematicians. … It’s a really awesome site, get’s a lot of traffic … It’s an incredible resource for mathematicians that basically erupted on the StackExchange platform in about 2 months, that it went from 0 to pretty much all the mathematicians on the internet are on there right now.”
— Joel Spolsky, Mixergy: Why Didn’t Stack Exchange Work?
OK, getting all the mathematicians on the internet is pretty cool. Here are the numbers from Alexa:
MathOveflow.net is that blue line there at the bottom, sometimes peaking above the level of 100,000th top site in the world.
Assuming Alexa’s numbers are roughly accurate here (I’d use Quantcast, but MathOverflow.net doesn’t rank high enough to get a listing there right now) then at least one (and possibly both) of the following are true:
- Spolsky’s a little off in his estimate that they have all the mathematicians on the internet.
- “All the mathematicians on the internet” is a very, very small market.
Not very encouraging that this is the one site he points to as their biggest success in all the interviews and posts I saw from him on this subject.
Key Factors Behind StackOverflow’s Success with Programmers
“The hardest thing about making a new Q&A site is not the programming—it’s the community. You need a large audience of great developers so you have the critical mass it takes to get started. Without critical mass, questions go unanswered and the site becomes a ghost town. I thought the combination of my audience (#15 on Bloglines) and Jeff’s (#89) would bring enough great developers into the site to reach critical mass on day one. So Jeff and I decided to go in together on this.” — Joel Spolsky, Stack Overflow Launches
A number of key factors helped Stack succeed with programmers:
- Spolsky and Jeff Atwood had very large tribes of programmers who followed them here. Generally speaking, these community members:
- Were committed enough to the art of programming that they read the industry’s top blogs
- Had been reading Spolsky and Atwood’s great posts, and were now getting a chance to both give back and show off their knowledge to their mentors and their community
- Already felt like a community, and already acknowledged these two site owners as their leaders.
- Programmers generally:
- Do their job by typing on their computers, usually while on the internet.
- Are comfortable learning new sites and programs, and using the Web to share information. Many programmers I know prefer to get their information from virtual friends on the internet than from the guy in the next office.
- Programming questions are generally of little interest to anybody who isn’t a professional programmer. Therefore programmers generally:
- Don’t make a living by charging for their advice (like most lawyers, for example)
- Don’t get hounded for professional advice while out with friends (doctor, I’ve been having this pain …)
- Can run a Q&A site where a very high percentage of the people are their peers, asking and answering each others’ questions. By contrast, Spolsky discussed building a site for professional gardeners. It would be very hard to stop that site from being filled with people like me asking stupid questions about my plants.
Take another example Spolsky suggested, Home Improvement:
- Instead of Spolsky and Atwood you could start with Bob Villa and Tim the Tool Man Taylor (the Buzz Light Year of Home Improvement). Or whoever the equivalent bloggers are in that industry (if such people exist). You may need to give them significant equity in this new site so that they’d bring their large online communities in, and you’d need them to hang around and mingle for a while .
- Most home improvement professionals aren’t typing on the computer while doing their job. They’d generally need to answer these questions at night from home.
- Most questions would come from non-professionals. And eventually, probably most answers as well. Experts would more often visit the site looking for clients than expecting to spend quality time with their professional peers.
If you tried to do an SEO Q&A site (as has been suggested) you’d at least be starting with people who are online. Then you could try to get people like Rand Fishkin, Aaron Wall, Danny Sullivan, and Michael Gray to bring their communities on to your Q&A site. Right, because that’s why they built these communities, so they could give them to you. And then they’d have to hang around and help lead your community. And even if you could pull that off, the SEO industry is filled with consultants who get paid to share their information, and who build web sites for a living. Good luck getting their readers to volunteer their time to building your enterprise.
Last example I’ll give is VCs. Fred Wilson, Chris Dixon and the other Stack Overflow angels already have an interest in the company. Maybe they’ll commit themselves to making AngelOverflow work. But I’m guessing that VCs’ audiences fit the pattern of most audiences on the web. Most of Fred Wilson’s readers are probably NOT fellow Angels, but rather entrepreneurs who find Angels and their information fascinating and potentially useful. The programming world is a fairly rare exception, because only programmers care about most programming questions. On AngelOverflow, I’d be asking the questions, and I’d love to see how long Chris Dixon sticks around to answer my questions. It’s not a symmetric community. It’s an expert / celebrity and his audience / fans.
Happy to hear what subject areas you think are going to work. I haven’t heard any that I think have a good shot, other than the awesome MathOverflow site that “gets lot of traffic” and has “pretty much all the mathematicians on the internet.”
Stack Exchange Revenue
Well, it’s 1999 again. Stack is going to accumulate eyeballs and assume there’s going to be a way to monetize them.
Within a few days of Stack’s announcement that the paid Stack Exchange 1.0 failed and they were going to pivot to a free model:
- Community site Ning announced that it was abandoning its free model, going to a pay model, and firing 40% of its staff.
- Ask.com’s parent IAC announced that they were shutting down FiLife, the free Financial Q&A site they had been running with Dow Jones.
It was interesting that at the same time top angels took the leap of faith that Stack Exchange would be able to turn eyeballs into money.
Thanks to Jeff and Joel for documenting their monetization attempts, and to William Shields for gathering these in his excellent post about Stack’s failed efforts at monetization:
- Responsible Advertising: Feed a Programmer
- Our Amazon Advertising Experiment
- Summary of Amazon Remnant Ad Experiment.
My favorite is Jeff’s comment “well, we have earned $1.16 so far. I think I will go buy a twix, and we can share it.”
But, we’re going to party like it’s 1999. I hope this one ends better.
What Comes First, Quality or Quantity?
Six months ago Joel had a soul searching moment when he asked if slow growth = slow death, discussing Ingres’ battle with Oracle.
“Executives at Ingres meant well. According to [Geoffrey] Moore, they felt that the company “simply cannot grow any faster than 50 percent and still adequately serve our customers. No one can. Look at Oracle. They are promising anything and everything and shipping little or nothing. Everybody knows it. Their customers hate them. They are going to hit the wall.” Of course, Oracle overcame those concerns and eclipsed its rival. And this got me worried. Were we Ingres?” — Joel Spolsky, Does Slow Growth Equal Slow Death?
This story may be part of what drove Spolsky to raise venture capital to grow Stack Overflow more quickly. And it may have changed some policies regarding his other company, Fog Creek. But he remains smugly confident that he’ll conquer the Q&A market one niche at a time, while focusing on high quality at moderate quantity. He mocks sites that are taking the Oracle approach of trying to grow very quickly and then scampering to get the quality to catch up to the quantity.
Stack is also betting that verticals will be more successful than horizontals in the Q&A market. That’s what most of the smart people thought about search too. But building these individual communities almost from scratch is going to be a tremendous challenge.
Stack is betting that their model of democratically choosing which sites to build next will result in the creation of the sites that will succeed in terms of community and revenue.
Joel is leading a great team of entrepreneurs, angels, and software developers. If anybody can make this model work, it’s them. But IMO that’s a very big if.
Am I missing the boat here? Please let me know your thoughts.