

Ning, free, eyeballs, layoffs - malbiniak
http://37signals.com/svn/posts/2284-eyeballs-still-dont-pay-the-bills

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johnrob
Worth pointing out:

a) Facebook used the same 'fat' strategy and is winning big.

b) Swinging for the fences increases the odds of striking out.

c) Marc Andreessen is not interested in creating 37 signals.

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dhh
a) Facebook is a definitely the odd man out. They made something happen that
very, very few other eyeball companies have managed.

b) Facebook isn't winning shit for their investors YET. They've allegedly just
turned cash flow positive, but they're still $750MM in the hole from VC
infusions over the past SIX YEARS. Add interest and risk premium and Facebook
has to make a TRUCK load of money to pay back their investors. Not just break
even.

c) Fashions change. Remember when Myspace was the golden goose? Friendster? It
is far from a guarantee that Facebook will remain hot shit for long enough to
pay back $750MM with interest and premium.

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johnrob
I think Ning is trying to maximize the size of success, not the likelihood.
Trying something very, very few other companies have managed is precisely the
point.

Most of us would rather increase the likelihood; but most of us are also not
Marc Andreessen. It's important to recognize this. There's nothing wrong with
rolling the dice and going big, if that's what you want. [EDIT] It's foolish,
however, if you think playing that way will increase the likelihood of
success.

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apsurd
I think your point is the most widely used justification for GOING BIG. But
even big companies need sustainability. Clearly 37signals has their own unique
message but if there's one thing I get from it, it's that businesses should be
built _to last_. Whether you are trying to make space-travel affordable or
running your own Italian restaurant, your venture _needs to last_.

So the question is not necessarily one of magnitude, it's that internet
companies looking for eyeballs _tend_ to be running on faulty logic counter-
intuitive to _lasting_ \- forget about making money, or changing the world ;
you can't do that if you aren't here tomorrow.

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hooande
This is flagrant linkbait. I start to write a witty comment responding to this
post, but then I realized that's exactly what they want us to do. They even
told us, explicitly in their book, that their forumla for success was to
create controversy in order to attract attention to their business.

I'm still waiting for the day when I see a 37Signals post about how they
intend to build great collaboration software, and not about how people should
run their businesses. Making inflammatory statements statements about other
people's companies is definitely one way to make it. But so is thinking and
talking about your actual product.

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dhh
We have a whole weblog dedicated to talking about our product and calling out
new feature launches: <http://productblog.37signals.com/>

Most people aren't that interested in just reading an infomercial, though.
Lots of people are apparently interested in reading opinions and discussions
about industry topics. Be they VC funding or whatever.

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gsmaverick
This is just more blindness from the folks at 37s. I would like to know how
much David pays Google to use their service? That's right he doesn't, so why
doesn't he put his money where his mouth is and pay for each and every web
service he utilizes.

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dhh
WTF are you talking about? I pay for plenty of services. In fact, I love
paying for good services. Dropbox is a great example. So is Campaign Monitor,
Zendesk, and Survey Monkey.

Give shit away for free and people will take it for free.

~~~
gsmaverick
How much do you pay for a search engine? You think that the 37s business model
applies to every web business out there and it doesn't!

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jasonfried
The 37signals business model, also known as "a business", is the business
model employed by about 99% of all businesses on the planet. They make a
product or offer a service and their customers pay them for it.

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gsmaverick
But you think it works for all 100% of businesses. And that's where you're
wrong. A search engine is a perfect example of a product which would fail if
they tried to sell access. But you can continue to pad your ego and think you
know everything there is to know about business.

~~~
techiferous
"But you think it works for all 100% of businesses."

Did David or Jason actually say something to this effect?

