Web trends revealed
Mark Harbottle is 34 years old and co-founded sitepoint.com, which attracts millions of web designers and developers from around the globe every month.
His business is now approaching $6 million in revenue, up from $4.3 million last year.
What is the niche you saw when you started the company in 1999?
A couple of years before [co-founder] Matt Mickiewicz and I started SitePoint in 1999, Matt had a small site called webmaster-resources.com. Back in 1997, Matt decided to compile a list of useful resources for webmasters, which he uploaded to the web. Over time, the list of resources grew, and so did the popularity of Matt’s site – webmaster-resources.com was the foundation from which we launched sitepoint.com in 1999. The goal then – as it is now – was to provide useful resources for people who make their living building websites.
You then used advertising revenue to develop it and developed a strong community. What did you learn about developing communities? What are your best tips?
Our community forums have grown into some of the biggest in the world for web designers and developers, with over 178,000 members. To say that we’ve learned a lot about managing and growing online communities and community-generated, content-based businesses would be an understatement.
The main thing that underpins a successful community is the volunteers who run it. You need quality people at the helm. The other thing to remember is that you never really own your community. I’ve seen many companies fall into the trap of over-commercialising their community, or trying to control it in one way or another. In our experience, that always backfires. The community is all about the people.
How many people come to your website and how are you making revenue from this?
Sitepoint.com attracts over three million unique visitors a month, which, according to Amazon-owned web analytics company alexa.com, makes sitepoint.com one of the 100 most visited websites in the US, and one of the top 300 in the world.
We monetise our site in a number of ways. We sell educational products in the form of books and videos. We sell advertising space, mainly to hosting and software companies. And more recently we’ve launched two very exciting initiatives – the first is a "crowdsourcing" model (see below) for procuring graphic design work, and the other's a marketplace for website sales.
You now have over 100,000 customers in 181 countries. How do you market internationally? What works best?
As we're running an online business, the free services we offer through our website have always been a big factor in driving customers to our business. We’ve never spent any money on advertising, and we don’t employ any sneaky search engine marketing tactics to trick the search engines into sending traffic our way. We simply focus on producing quality, free content for our audience.
Even back in 1997 we had faith that if we focused on our content and community, over time the search engines would catch up, allowing sites that really add value to rise to the top. Google pioneered this approach with its page rank algorithm, and it’s paid huge dividends for us. Organic search now accounts for more than 50% of our traffic.
Your revenue has grown significantly. What was the hardest point to manage?
I think the first few years are always the hardest – time, money and resources are tight and, as one of the founders, I was more or less responsible for everything. Having said that, I think the next couple of years are also going to be challenging, as we transition into a $10 million-plus business. Getting to that point will require a shift in mindset and approach, but I’m really looking forward to it.
You have a team of people who play around with different web technologies. What are the latest technological advancements you’re seeing online today?
The sharp edges of web technology right now are mainly to be found in two areas. First, there's a strong focus on bringing a richer user experience to browser-based applications. Whether they're taking advantage of the latest built-in browser features with Ajax, or embracing new browser plug-in technology with Adobe Flex, Microsoft Silverlight, or Sun's recently-announced JavaFX, developers are putting a lot of effort into producing slicker, more robust user interfaces.
Second, we've observed the proliferation of a collection of new development frameworks and libraries that promote developer productivity over more traditional values like performance and manageability. The theory seems to be that the development effort is more expensive than server hardware, so why not optimise your developers' happiness?
You refer to your latest offering as “crowdsourcing”. Can you explain what that means?
Crowdsourcing basically means drawing on a large group of people to help you produce result, rather than relying on a single company or freelancer. The main advantage of crowdsourcing is that innovative ideas can be explored at relatively little cost.
Our latest offering, which is based on the crowdsourcing model, is called Design Contests. Here’s how it works. Say you’re a startup with a limited budget and you want a logo designed. You simply upload your requirements to our site (which will cost you $US25) and you nominate a prize amount for the winning design (say $US100). Over the next week designers from around the globe will compete for your prize by submitting designs tailored to your brief. If you like one of the designs, you pay out the prize money, and you receive the finished art work. If you don’t like any of the designs, you simply provide feedback to the designers and walk away.
The crowdsourcing model for graphic design takes most of the risk out of procuring design services. For a relatively small amount of money you can sample literally dozens of different design concepts, from thousands of designers.
What is your best tip on gaining new customers?
Focus on quality, and remove as much risk as possible from the purchase. If you can give away for free something that demonstrates your offering but doesn’t cost you a whole lot, and you try to up-sell users to a premium offering that adds unprecedented value, you’ll do very well.
How is your industry changing and who are the biggest winners?
A trend that we’ve witnessed over the last year or two is that people are starting to build mini online empires – webmasters and entrepreneurs from around the world are buying and flipping websites for profit, like property developers do with real estate. In some cases, buyers will "renovate" a site by using search optimisation strategies to build traffic, and including advertising links to increase revenue, and then they'll offer the site for sale.
We quickly capitalised on this activity by building a marketplace for traders to buy and sell their websites. Only 12 months in, we’re already seeing about $1 million worth of new sites being listed every month, 50% of which sell within 30 days.
Some sites sell so fast you don’t even get time to place a bid!
The biggest winners are those who can find a bargain, add value, and sell the site for profit – sometimes doubling or tripling their investment in a matter of weeks or months.
What is your exit strategy?
To be honest, we’ve never had a clear exit strategy. When we started out I always believed that if you built a strong brand and a highly profitable business, then the exit would take care of itself. I guess I was naïve, but in some ways it was a great thing – it allowed me to put all my energy into building a solid business rather than focusing on what someone else might be looking for.
Seven years on, I now realise that to get the best outcome for shareholders, staff, and customers you really do need to plan your exit strategy carefully. This is something that I plan to devote more time to as we move forward.
Web 2.0 – what works best?
I’d say the best examples of web 2.0 in action would be those currently being built using the Google Maps API, where maps from around the world have been taken and merged with other useful data to produce completely new services.
What is it about web 2.0 that businesses don’t get?
I think “web 2.0” means different things to different people. For example, for end-users it might mean an interactive web page or a nice clean site with plenty of whitespace and cute graphics. Web developers, on the other hand, might use the term to describe open data services, such as APIs, RSS, or even microformats. And then the business people probably classify any new online business model as “web 2.0”.
At SitePoint, we believe that web 2.0 is the next stage in the evolution of the web. Throughout history, each new medium (books, radio, cinema, television) has first been used to produce content equivalent to that found in existing media.
The classic example is radio, which was first used to broadcast radio plays – content based on the familiar medium of theatre. Eventually, however, from the unique strengths of a medium will arise new kinds of content that don’t mimic what came before, but instead deliver an experience that wouldn't otherwise have been possible. We believe that web 2.0 is that stage in the evolution of the web as a medium.
What is the hardest thing about leading?
I think the biggest mistake you can make is to confuse management with leadership. People aren’t looking for an outspoken super-hero who preaches a vision and barks orders. They want someone they can respect, someone they can trust, and someone who listens and takes action – someone who is willing to lead by example. The minute you start thinking you’re better than the people around you, you’ve almost certainly lost your ability to be an effective leader.
What is the most outrageous thing you have ever been asked by a staff member?
A staff member once asked me whether he could take a day off work to look after his sick guinea pig. I considered asking him to come into the office anyway, and I’d find him a new one, but my compassion got the better of me.
What is the greatest sacrifice you have made to build your business?
The greatest thing that I’ve sacrificed is my time. As a business owner you’re always thinking about your business – it totally consumes you. I’m acutely aware that if you ask 10 successful business people what their greatest sacrifice was, eight of them will say that they didn’t spend enough time with their family. Now that I have a little one, I’m determined to prevent that from happening to me.
What is happening in your industry? There is a lot of consolidation… what does the future look like?
There's definitely a lot of consolidation going on right now, not only in our niche but across the board. High traffic sites and community-generated content is white-hot again. One thing is certain – if your business model boils down to eyeballs and advertising, the big media conglomerates will gobble it all up at the end of the day, just as they’ve done over the last 100 years with newspapers, radio and TV.
Questions and Answers
Fiona Garrett writes: Mark, I really enjoyed your piece. I noticed you have lots of forums on your site. What are your best tips to get people involved in forums?
Mark replies: Getting people involved in an online community can be done in many ways. I wrote this article back in 2000. It’s still relevant now.
Robert Heath asks: I am one of the directors of Family Friendly, and am curious if you had some suggestions as to what would be beneficial for redesign and lay out of our site. We currently approach businesses and provide window signage as well as web exposure for them. Do you think that we should look at providing exposure for free on the website and sell advertising space instead?
Ben Calvert from homefriday.com.au writes: Great article, Mark. I am interested in your comments both here and the other article you wrote about building forums and communities. We have found it a harder road than we had predicted for our village forums to create their own critical mass and momentum. The categories seem to be topical and interesting and people can get useful information with tangible benefits – particularly the "Best buys and bargains" forum and the service provider specials.
Do you think that we have hurt ourselves by not including a "send to a friend" function and a notification to a publisher when someone replys to their comment? We made a choice to design our own forums in keeping with the site look (and also shared login details), but perhaps we should have implemented the more familiar open-source forums which people are used to.
Mark replies: At a quick glance I think your forums are too hard to use, and the sign up process takes too long. Ten minutes instead of 30 seconds. Your target marker is consumers and small business people by the looks of it, so it needs to be super easy. I’d also consider whether you even want to force people to login to post. You might want to remove that friction altogether while you’re establishing yourself. Something to think about anyway.
You also have far too many categories in your forum. To begin with I’d start with around five top level categories and only spin those out once they reach a critical mass. It’s a bit like when you arrive at a restaurant, they tend to sit people together and near the window first to make the place look full. You need to apply the same principle to your forums.
Fewer categories will mean more posts per category, which will make your forums look and feel more vibrant and active, which in turn will attract more people to read and post. Also, if you have auto alerts turned on (as mentioned above) you’ll get a double benefit because consolidating posts into single threads will mean more people will be emailed when there is an update to a thread.
I don’t think designing your own forums is a disadvantage at this point. In fact it might bean advantage because you have more flexibility. Down the track however, when you get to the size of our forums, it’s much more cost effective to have an off the shelf solution because it includes all of the admin functionality that you won’t get unless you spend a lot of time and money developing it.