How Bloglines got started

Mark Fletcher had created the service ONElist which later became eGroups and then was acquired by Yahoo. After a sabbatical of travel to clear his head, he was looking for what to do next. He started a company called Trustic which was focused on developing an anti-spam product. Like so many others, the tool he had created for himself to solve another problem during development became more important than the product he was developing. Fletcher came to the realization that making anti-spam measures is not a fun business to be in- “because everybody hates you. You’re never perfect. You either don’t block enough spam or you block somebody’s favorite emails. I quickly got out of that.” He took the tool he had developed for himself and shifted that to be the main product development focus of Trustic and Bloglines was born.

Serendipity

They put the Bloglines product online in June of 2003 and received immediate press coverage. It was perfect timing given the exploding popularity in blogs in RSS. Though RSS was not yet mainstream and popular more amongst technical circles, it held a huge advantage for anyone who had to keep up with a constant flow of news. For reporters, it meant not having to check a hundred different web sites every day. They saw the immediate benefit and the ease of use of the web-based aggregator made it a frictionless process for them to adopt it (ie. no installation). “I think we got really lucky because blogs in general started to become really big and the downturn was ending, so you had all of these people looking for the next big thing. Also a lot of reporters used Bloglines. They like to talk about things they use, so we got really fortunate in that regard.”

We’re counting on a high transmissibility factor for JumpBox among technical circles as well. Bloglines shaved hours of the daily task for a reporter to visit a ton of web sites and read the new developments. JumpBox has a similar promise in terms of time savings for the average IT administrator- the tedious task of setting up a new Open Source server application can take anywhere from a couple hours to a couple days. This task is now reduced to a thirty-second setup process with JumpBox. Beyond neutralizing the setup process, the IT admin has reduced maintenance concerns and gets the comfort of knowing that he/she can effortlessly move the application to faster hardware if it starts getting pummeled and avoid re-installing components and migrating data manually. Our expectation is that, like the reporters that sneeze the advice of helpful tools to their colleagues and ultimately their readers, IT admins for whom we save a significant amount of pain will go and tell their friends in the industry about the “secret advantage” of using JumpBox.

How does Bloglines make money?

This is the one question I still had after reading this interview. Fletcher said, “My philosophy on these types of companies - consumer-based Internet companies - is that you don’t need to worry about the business model initially. If you get users, then everything else follows. Basically any technology can be copied, any concept can be copied. In my opinion, what makes one of these companies valuable is the users. That can’t be copied.”

Hey- no arguments that the users and the brand are the value with any company; they and their loyalty to your product cannot be duplicated. But at the end of the day there still needs to be some business model. I get the idea of “just concentrate on making something people want” and clearly Bloglines is something that a lot of people use and love. But nowhere on their site is there an opportunity to pay for a premium-level service or be subject to advertising. I still don’t understand how it makes money. Ask Jeeves acquired them so perhaps the value of having the Ask brand on the home page and their partner destinations listed in the navigation is enough. They undoubtedly have a strategic plan for how it makes them money but that model is anything but apparent.

On how startups are changing

Under a decade later the landscape for doing a tech startup has completely changed. Virtual hosting options reduces the hosting fees by an order of magnitude. Off-shore development is becoming more practical and there is now an abundance of information via blogs on practices like negotiating a term sheet with a VC that were previously privy to only an elite few. Fletcher says, “The whole VC process in general has been very closed and oftentimes by design by the VC’s. Because they don’t want to be negotiating against other VCs they don’t want terms of the deal to get out, so it’s in their best interest to keep things secret. But it is very nice that things are starting to open up now, whether they like it or not… The great thing for entrepreneurs these days is that there is so much more information out there than there was ain the ’90’s. Any number of people that have gone through this are blogging. All sorts of VC’s are blogging now. There are a lot more books out now. You can just do a search and find sample term sheet, for example…the other thing, doing startups like this is so cheap that it just doesn’t require a lot of money. I think I put in a total of $200,000. And I didn’t do it nearly as smartly as I could have. I ended up buying all the computers. My recommendation would be: don’t buy any computers. Just use the virtual dedicated hosting services.”

I agree with these points- I’m subscribed to the blogs of about eight different VC’s and there is a transparency that did not exist even five years ago regarding how the mechanics of entrepreneurship work. Hosting-wise- utility computing services like S3 and EC2 are making it so anyone has access to powerful computing resources and can pay for only what they need without having to buy hardware, rent the space at a colo and hire IT staff to tend the servers. We managed to bootstrap JumpBox on $108k to the point at which we raised some angel investment and (knock on wood) this should comfortably carry us through to customer revenue at which point we’ll be in a position to decide the best way to grow the company. But Fletcher is right, the barriers to do a startup have come way down and anyone who can scrape together six months of living expense reserves and develop something useful has the ability to do their own.

On the psychological hurdle of shipping

So true so true… Fletcher says, “Just get something out there. If you find really early versions of ONElist or Bloglines on archive.org, the websites are horrible. They are crap, they don’t have any features, they just try to do one thing. And you just iterate because users are going to tell you what they want, and they’re your best feedback. It’s critical just to get something out quickly. Just ot start shipping and then you can iterate. Because shipping is just this huge hurdle. I’ve been a part of companies that have had big problems shipping- they just can’t ship. It’s a psychological thing.”

We’re itching to ship a production release of JumpBox and with an imminent final release candidate tomorrow, our next release should bring us through that psychological barrier that Fletcher describes. We’ve had 10k+ downloads of our appliances to date and a fair amount of user feedback in our forums and via our private usage surveys. There’s still no substitute for accepting payment for what you’ve made- we recognize it as an important milestone morale-wise and we’re looking forward to hitting that shortly.

Another interesting byproduct of shipping early and intentionally leaving out important features is the beneficial effect on customer loyalty when they inevitably request the missing feature and you add it in. Fletcher says, “We were getting 50 to 100 emails a day at Bloglines and most of them were feature suggestions. Once you start acting on those feature suggestions, the suers see that you are actually listening to them and they become more loyal to your site. Because they see they are able to participate in this and it’s just kind of like a virtuous cycle. So it is not a disadvantage - it may even be an advantage - to ship without all your features initially, for that reason, because you get all of this going and you get out there sooner.”

On the importance of an MBA

According to Fletcher, you don’t need it. The rationale is that you won’t be focused on biz dev early in a startup, you’ll be focused on engineering the product to be useful enough to attract users. “You either stand on your own or fail on your own, initially. If you build momentum, if you get users, then deals may come your way, but a lot of times most deals don’t make sense, so you don’t need hardcore MBAs.” I have a friend who founded a tech company and has grown it slowly over the past six years. He recently completed his MBA at Thunderbird School of Global Management after having started the company because it gives him the theory to better grow and manage his company at this point. But the idea of a would-be entrepreneur facing a crossroads at the beginning deciding whether to go secure an MBA before starting a company is silly- there is no quicker education than that of just doing it.

On making a graceful exit

In the same way that Paul Graham stayed on with Viaweb to ensure a smooth transition after Yahoo acquired them, Fletcher stayed on with Ask after Bloglines acquired them. “With Ask, I stuck around for 14 months. Not that it was contingent on the acquisition in any way, it was just the right thing to do… I’ve learned that your reputation is very important, as an entrepreneur, as a tech guy in the Valley, and it’s a good thing to worry about your reputation. I was very concerned about that, and so, when only two people are coming over - and most of the knowledge was still in my head - it wouldn’t have been right for me to leave.”

Fletcher’s interview was one of the ones that most resonated with me personally. Whether it was his direct conversational style, him talking about apps he had homegrown to manage a server from his Treo or the fact they used the same law firm as us, I felt like this is somebody I would want to sit down and buy a beer. I had been reading his blog Winged Pig for the past year so perhaps contributed.

Ask Jeeves acquired Bloglines in February, 2005 for an undisclosed sum. It’s the second most popular web-based feed reader today behind Google Reader (though having tried both I still prefer it myself to Google Reader).

This entry was posted by Sean Tierney on Thursday, May 17th, 2007 at 4:41 pm and is filed under Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.