Why I Will Never Be A Good Businessman / 07.29.08
I know how it is, I don’t write for a very long time then I come back with an entry where I expect you to read four entries before you read mine. I apologize, but today I must do the same thing because you need to gain an understanding first of how business is done in the real world. So go read the insights of a CEO and how to handle potential takeovers.
- Open Letter to Know More Media Founders, Team and Bloggers
- Followup to Our Know More Media Letter (and an alternate proposal)
I suppose everyone does this weird disclaimer bullshit now when they write so let me say that b5media could be considered competitors with 9rules.
When it comes to business I like to think I know the basics. Make more than you spend. Give people something they value. You can never underestimate the value of your brand. All that good stuff. The one thing I have never been able to do is bullshit people. It seems like most good businessmen bullshit people. Now don’t get me wrong in other settings I can bullshit you to death, but when it comes to business I play it straight and that is where I probably mess up.
I tend to put myself in the other person’s shoes to see if the deal will work out for them. For example, when 9rules first started we had a shared revenue model. You put our Google ads up on your site and you take a % and we take a %. After about 3 months though it became apparent that we didn’t generate enough traffic (we were still young) for these people to justify sharing the revenue so we scrapped the idea for two reasons:
- Again, I put myself in someone else’s shoes and I know I wouldn’t be happy with the deal.
- We wanted to bring more quality sites on and the easiest way was to tell them to keep the money (see I’m a bad businessman already).
I think one blogger complained about the revenue split, but beyond that everyone was fine. The decision was made by us. We have never had a complicated contract or agreement because I know what we offer and I know if I was joining 9rules I would want to keep things as simple as possible.
Wright is proposing to these bloggers (in the original proposal) that they come over and blog for $50 for the first month. To some that might actually be an increase in pay, but to others that has to be an insult and this is where I get fuzzy on business. From a purely business perspective it makes sense for Wright to make an offer. Get a ton of new blogs over at a low price to see what they can do with them, but the people business aspect of it doesn’t seem right. This is where I always have a problem when it comes to business because there are two aspects that don’t always mesh: the financial and the people. Why not just offer to bring them over, they blog with whatever ads they might have and they keep while you analyze them and set them up in a 3 month span. Hosting them can’t take that much of a burden off of them and if you aren’t taking any money from them off the bat they get to see how the relationship with b5 works without being shafted.
In a smart move it seems this is what Wright has done in his follow-up, which from an outsider’s perspective seems less shady and more reasonable financially and people-wise.
The other point of business that I am missing is why this is even made public. I understand Know More Media isn’t contacting to b5 anymore, but is that a reason to continue doing this in a public forum? I’m not sure how many blogs they have but if they have a 100 I can understand that sending a 100 private emails is a pain in the ass, but spread those emails out over a week and you are fine and avoid this whole mess. You dig your company in a hole with the first proposal which honestly shows your intentions (in the end you are a business). I would’ve just hand picked the best ones and emailed them and got them setup. No offense to the other bloggers, but not every blog can be worth its weight to maintain. I love keeping bloggers up and up, but I also enjoy doing the reasonable thing.
This final point goes out to all people in business and life. Stop saying it’s not about the money if there is money involved. The only time you can say it isn’t about the money is when there isn’t money involved. I remember a VC offer we got a couple years ago. The expectations they wanted were unreal, but to be honest if the money was more we might have changed our minds. There is certainly almost always a price that people are willing to make a move on, so yes it is about the money when it comes down to it. 9rules doesn’t take a dime from its members and we don’t care about their traffic. We have a right to say to them it’s not about the money. But that is a businessman playing it straight, which apparently the great ones don’t do right?
So if there is someone out there who can teach me how to try to pull the wool over someone’s eyes or bullshit them enough that they drown in it I’m all ears. As for Wright, I’m not saying you did the wrong thing, if the first proposal had work that would have been a major coupe. You were doing what business people should be doing and negotiating deals and making moves. You just happened to do it differently than I would have done it.