Friday, January 16, 2009

Bubbles, Slogs, and Selling Out: Part 3

In Parts 1 and 2, I described a meeting I'd had in the summer of 2005 with a powerful media exec who'd appeared out of the blue to invite me to dinnner. Unknown to him, or to anyone else besides Bob Okumura, Chowhound's co-founder, we were weeks away from pulling the plug on the bloodsucking but phenomenally useful web site we'd created eight years prior. I learned at this meeting that measures we'd taken to reduce traffic after the 2000 collapse of online advertising had caused us to narrowly miss traffic levels worth upwards of $35,000/week in Google AdSense income.

The other surprising thing explained to me that night was the significance of Rupert Murdoch's acquisition of MySpace two weeks prior. Murdoch had paid a breathtaking, economic-bailout-ish sum of cash for the company, and, as a result, investors, ever-twitchy, were suddenly all hot and bothered about online communities. Everyone was convinced this was the next big thing.

Dad always told me that if you keep your most unstylish clothes in the back of the closet long enough, they'll eventually come back into fashion. I'm still crossing fingers for those nehru jackets, but in Chowhound's case it proved true. Five years after the previous bubble had burst - an eternity in Internet time - our sort of operation was "hot". We were part of a movement with a name I'd not heard before: "Web 2.0". That is, we were a data-rich site built upon user-generated content. I'd run online forums since the mid 1980's, but was late in hearing about this exciting new Web 2.0 phenomenon that we were apparently a part of. I was, in other words, hopelessly stuck in the past yet brilliantly cutting-edge. My head spun if I thought about it too hard.

So: we were a hop, skip, and traffic jump from $35,000/week, plus, as the best-known and most popular online food forum, we were about to become a hot property among investors. We were at the leading edge of an impending second dotcom bubble. Who knew? 

Uncareful readers might assume I received this information with glee; that I strode reenergized from the restaurant with lofty plans to leverage this change of fate. A path had appeared for Chowhound to survive, even thrive, and for me to escape financial ruin, just so long as I redoubled my efforts, swapped in a new infrastructure, guerilla marketed like crazy, and put on a dog and pony show for The Suits. Fantastic news, right?

Well, not exactly. Listen, it's not that I'm lethargic. After all, I'd soldiered on with Chowhound for many years, nurturing something from nothing - no budget, no resources, no marketing, no infrastructure, no office, no paid employees, no salary...nothing but raw enthusiasm. But at this point, I was mired up to my teeth with the day-to-day taskload of running the thing. The prospect of keeping everything rolling while also revamping infrastructure (to foster the traffic that would bring in serious income) and taking time to shmooze investors was unthinkable.

So even if my batteries could somehow be magically recharged, I was at the end of the line. Here's a hard-won lesson: it's extremely easy to talk about implementing initiatives. In fact, there are phalanxes of pricey consultants - who've never actually built anything, themselves - whose job it is to yabber helpfully about The Things You Ought To Start Doing. But talk's cheap, whereas actually building stuff is hard.

There are two main reasons why building stuff is harder than you'd think: First, most capable people are pretty maxed out doing whatever they already do, so there's little marginal time or energy to pour into big new initiatives. Second, while a great idea is a nice thing, there's vastly more devil in the details than you'd imagine. "Get some ads!" "Talk to some venture capitalists!" "Upgrade your software!" "Move to a cheaper serving company!" All these suggestions spill easily off the tongue, but it's the dark matter - the hidden complications and expenses, the unintended consequences, and the black swans - that gets you. Pushing through the swamps, time sinks, and aggravations, all above and beyond preexisting commitments, requires nearly superhuman resolve. People who lack experience building things always vastly underestimate this dark matter, and that's what execution is all about.

This explains why CEO's get paid so ridiculously well...and why so many people are so mystified by their pay scale. Everyone's a genius at sideline quarterbacking, but only a very few human beings have the competence, the stamina, and the cojones to navigate the miasmas and wrestle into existence something successful. I'd built something successful - against long odds, in retrospect - but found myself massively overwhelmed by the monster I'd created. Sure, I could drop a few balls - let responsibilities slide while I cultivated The Money Guys. But because too much rested on my shoulders, this would make Chowhound begin to suck. And Chowhound sucking would devalue vast effort. I mean...if I valued money over not sucking, then what was that previous painful decade about?* No, I'd close Chowhound rather than let it suck.

* - For more on honoring past idealism, see The Precedent of Muffin Refusal.

(Running a site like Chowhound is like gardening, in that keeping it up requires the deflection of all sorts of entropy. For example, the raw, unmediated state of Internet conversation is angry, commercial, digressive, and idiotic. Chowhound was a success because a dedicated crew worked diligently, nearly 24/7, to stave off that particular entropy. The result was a polished oasis, which self-reinforced by attracting great, discerning users - folks who valued intelligence, authenticity, and focus. If Chowhound were permitted to suck, even just a little, the spell would be broken, finicky experts would leave in droves, and in would flood the Olive Garden People, who, no longer intimidated by the high prevalent savvy, would let loose en masse with ditzy opinions. Entropy would jeopardize the precious climate of passionate expertise that made our data irresistible. The essential issue - the issue that kept me glued in front of my computer for most of a decade - is that entropy can't be undone. When online forums degrade, they do so irreversibly.)

Really, closing still sounded awfully good to me. I yearned to return to writing and to music; managing web sites was never my life goal, and I was toasted to a crisp. So I listened politely to my media honcho dinner companion, waiting, patiently, to hear why, exactly, he'd deigned to swoop down and make my acquaintance. He clearly was not there for the food...

Read the next installment (#4)

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