The Website Obesity Crisis

Let me give you a concrete example. I recently heard from a competitor, let’s call them ACME Bookmarking Co., who are looking to leave the bookmarking game and sell their website.

While ACME has much more traffic than I do, I learned they only have half the daily active users. This was reassuring, because the hard part of scaling a bookmarking site is dealing with people saving stuff.

We both had the same number of employees. They have an intern working on the project part time, while I dither around and travel the world giving talks. Say half a full-time employee for each of us.

We have similar revenue per active user. I gross $12,000 a month, they gross $5,000.

But where the projects differ radically is cost. ACME hosts their service on AWS, and at one point they were paying $23,000 (!!) in monthly fees. Through titanic effort, they have been able to reduce that to $9,000 a month.

I pay just over a thousand dollars a month for hosting, using my own equipment. That figure includes the amortized cost of my hardware, and sodas from the vending machine at the colo.

So while I consider bookmarking a profitable business, to them it’s a $4,000/month money pit. I’m living large off the same income stream that is driving them to sell their user data to marketers and get the hell out of the game.

The point is that assumptions about complexity will anchor your expectations, and limit what you’re willing to try. If you think a ‘real’ website has to live in the cloud and run across a dozen machines, a whole range of otherwise viable projects will seem unprofitable.

Similarly, if you think you need a many-layered CMS and extensive custom javascript for an online publishing venture, the range of things you will try becomes very constricted.

Rather than trying to make your overbuilt projects look simple, ask yourself if they can’t just be simple.

View the original article here

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