Guy Kawasaki — the $12k blog
Categories: innovation, philosophy
Written By: todd
I’ve long been a fan of Guy Kawasaki. From the early days as Apple evangelist, to his current role as early-stage VC, Guy has always had keen insight into technology and social trends. He’s written a few books with some practical advice on building successful companies, drawing upon his own experiences in the trenches.
Guy preaches what I have understood for a long time: the cost of starting a web company has dropped dramatically in the past 5 years or so, to the point where the economics of funding and launching a startup are drastically different. Old and busted: $5M in series A VC funding, years of technology development, then hopefully some revenue. New hotness: bootstrap on credit cards or angel investors for <$100K, launch in 3-6 months with immediate revenue, and hopefully positive cashflow soon after.
The evidence that Guy holds up for these trends, to say "all of this is true, and here's how I took advantage and launched something big on a shoestring budget" , is his site truemors.com . Truemors is a news site with various categories (business, gaming, health, etc) and content submitted by readers. It sports a digg-like ‘X users interested’ scheme for users to vote up their favorite stories. And there’s some editorial posting at work too, by the staff of ‘truemorists’ inside and outside the company.
Guy claims (and I believe him) that the Truemors site was launched on a $12K budget. He marvels that this is orders of magnitude less than dot-com era startups, and credits open-source software and easy hosting providers in making this all possible. And he’s right.
But it’s a blog, Guy. A freakin’ blog.
Now, it’s a pretty cool blog. It has some nice features, like being able to post by phone or email. And it certainly ‘democratizes information’ , such that “the many can create too”. This is all great, and it’s probably a good business in that you get plenty of traffic to monetize via ads on the site.
But it’s still a blog. Guy even tells us it’s built on Wordpress (as is the blog you’re reading now), and he spent as much on legal costs as on the software development. You can probably guess that this blog, although not as well-designed, technologically advanced, or revenue-generating as Trumors, was launched on a much smaller budget.
Now don’t get me wrong, I’m not going to advocate spending millions on building a product when you can spend a few hundred — this is just good business sense. But what exactly am I supposed to marvel at? That it *only* cost $12K? I wonder why it didn’t cost less than that? Really, do I need to invest even $12K to launch a profitable blog site? If that’s the barrier to entry for this most virtual of industries, it’s too high. Why can’t a high-school kid with an idea for a niche news site (again, leveraging existing tools like WordPress) get started on his allowance money? What does it say about the state of innovation if we need to spend 80% of our startup costs paying off a lawyer to file incorporation paperwork?
In reality, what ensured Truemors success wasn’t the technology base of Wordpress and MySQL and reliable interweb hosting. It wasn’t the $5K in legal fees that Guy paid the top-tier Silicon Valley firm to file his paperwork. It was Guy’s reputation and popularity, which ensured a wide readership of whatever he published, a reputation built over decades in the industry. Guy is a brand, an icon, and without that Truemors would not have garnered much of the attention it now deservedly holds.
So we’re back to square one — $12K is too high of a ‘floor’ for launching a web startup, and it’s too little in terms of the equipment you need — namely, some brand recognition or other competitive advantage (content, technology, etc) to make your site rise above the noise.
At heart, I think Guy is right about the trends, and right that the barriers are far lower than they used to be. But I’m not sure Truemors embodies all of this, simply for the fact that it’s unique to Guy’s situation. Other entrepreneurs will take very different paths to arrive at a similar destination — some will use less cash, others will have more or less brand recognition. But they will all benefit from a marketplace that is drastically different than it was even 5 years ago, when these opportunities were mostly out of their reach.
