Like minds, like links
Fiona Boyd and David Eedle founded Artshub, one of the most successful online content businesses that Australia has seen. They sold it last year for about $3 million. Now they are building a new web business around social networking for collectors, called CollectZing.com. Fiona shares what she has learnt about social networking with Amanda Gome.
To listen to the lunch with Fiona Boyd, click here. To download this mp3 file and listen to it later, right-click this link and "Save target as..." to your computer (Macs; option-click).
Amanda Gome: Artshub started by cutting 17 job ads out of newspapers that focused on the arts business and putting content around that to do with the arts community. Is that right?
Fiona Boyd: It is sort of right. David was very much connected to the performing arts world and he was called all the time when people left one job about what he might know was going on in the sector. And so informally he was this sort of jobs mentor to a whole range of people.
It really annoyed me because we had to make money to keep our business alive and to feed our one child at that time and ourselves, and he spent a lot of time on the phone counselling people about what jobs he thought were coming from what part of the country and performing arts centre network.
I must say I said to him several times, you must find a way to make this make money instead of cost us money, because if these people value you so much for your opinion, make them pay for it.
How did you make money from Artshub?
We had about three months of free job lists, and basically we started with a few cut outs from the papers, the weekend papers. And we pretty much just emailed our own little black books and we said to people: ‘Look feel free, if there’s a job that becomes vacant in your centre or your part of the arts world, to list your job.’
So we had an interactive site where people could do that. So we would be cutting out and inputting 20 jobs and the rest would be done by people who were receiving an email and logging the jobs on the site.
So you know, after a few months there were about 100 jobs or more a week. And at that point, people were starting to ask for a lot more. They wanted to do more with the site. We had always intended that we’d add news to it because we thought that once I’ve got a job, there was no real reason to hang around and be a part of things.
So if we had a news service that really was about the breaking news in the arts industry that would never get reported anywhere else, because it wasn’t really noteworthy for mainstream media. But it really would be the lifeblood of someone who worked in that industry, so that they can notice the patterns and trends and what was going on around them and react a lot more quickly to those things.
So we had to take a look at how we put those two things together and we did that by launching what was called at the time dramaticonline.com, and we really just called the jobs product, the jobs bulletin.
That was all it was ever known as, but it did have about 3000 people on the list and they just felt that [to list] at the time that we started dramaticonline.com, and later on we rebranded it as Artshub because it (dramaticonline) wasn’t a great choice of name.
It was one of the errors we made in the early days. We rushed too quickly… and we didn’t think carefully enough about a brand name that truly represented what we wanted to do.
If you were starting Artshub now, how would you go about monetarising the site?
Monetarising it? I still think a subscription product is right for that sector.
It is a niche sector. I think that if you can provide really good quality news and as many of the jobs available in the country are listed on that site, then there is a growing, creative class sector who will pay for that.
Since you’ve sold it, what have the new owners done that you think is a good idea and what have they done that’s been a bad idea?
I actually am fully supportive of what the new owners have done. My partner is a bit more angsty because he’s a technology person and only he knows some of that stuff. There’s a lot of emotion tied in there. But that said, overall both of us think they’ve really made the site more exciting in the sense that the way that content is presented.
They’ve really put a lot of thought into making sure that that speaks directly to the customer. My background was in media in ABC Radio and I was trained in television as well. I think I more came from the perspective of journalism and the content, and people could figure out whether it was exciting or not by whether the slug was attractive or not. Whereas I think there are a whole lot of really good design tricks and web based tricks that can actually catch your attention in a much more elegant way.
I think certainly the new owners have really drilled down and reworked the site so that the content itself is the same content but it just looks a whole lot more riveting.
Give us three tips that they’ve done.
I think they’ve condensed how it all looks. So things are much more snappy. They’ve changed the colour scheme a bit so it’s softer on the eyes so you’re really encouraged to stick around on the site a whole lot longer.
With content, it is about grabbing attention and getting people to read all the way through and to have some kind of response. So I think they’re working the content better. The content was always there but they’re getting more value out of it and I think that’s a really good thing.
Is that through better headings or snappier writing, or what have they done?
I don’t think the writing’s really changed that much. I do think the team was a good team and they’re still there. We might have had too bland… too close to a newspaper style in presentation. They’ve just gone for a much more snappy look. It’s great.
So you still read it?
I don’t read it all the time, but I scan it and I read anything that jumps out at me. I must say that I read your publication. And Eureka Report from beginning to end. It takes two hours that darned thing. You’ve got to invest some time in actually reading it.
What was it like letting go of your baby?
For me it wasn’t that difficult in the sense that I think you need to be really emotionally involved in business and it is much better if when you take a decision that you own that and that you commit to it. So I committed to letting go gracefully and I believe that we did.
I think people can complain and they can feel that they didn’t get as much out of it as they expected. I’ve heard that sort of response and (that) they should have got more money, or the owner should have done it this way.
But we took the decision. I still look back and think that the person who led the consortium who bought Artshub was the best possible buyer at that time and probably even at this time.
It was Simon Baker from realestate.com.au?
He’s the CEO of realestate.com.au. It was a private investment for him. He believes in online content and online media plays. I still am very inspired by Simon. The whole process of the sale was a good process.
What did you learn from that? What mistakes did you make?
I don’t think we made any mistakes, and this has to do with Simon. I think he is a really fabulous deal maker. He also is not ruthless and completely ego or greed driven. He constantly has his eye on a bigger picture and where the other side of the party needs to sit in order for everyone to get their needs met, there I think he’s a very elegant player when it comes to doing a deal.
How long did the process take and what records would you have wished you had kept that you didn’t have, or was it a simple process?
It was a pretty full due diligence. We had all our records because from the day that we started we really were incredibly focused around the administration of what we were doing, mainly because our financial adviser was really insistent on that.
And we both had run businesses before so we knew that to create value in the business we had to make sure that all of the administration of the business was completely… all t’s crossed and i’s dotted, and that certainly was the case.
So really it was a very full due diligence but we had all of our documentation, so it really was about pulling it all together and it took about three days to do that. It can take a lot longer, but we had a very well organised business. A business ready to hand over, and we had worked hard on that in the 18 months prior, so that if the time came to sell, that it was instantly saleable. It was hand-overable.
What are you doing now? I was always so interested to see what you and David would do next after Artshub.
We were told by many people in business and many investors that it was a crazy business. It wouldn’t make any money and it could never be sold and I think we’ve proved a lot of people wrong and it was also sold to someone who is really credible, who travels the world all year around acquiring businesses both in the realestate.com.au space, but he gets to see content, online content businesses in all sorts of different locations so to make a decision to buy us, I think was… it must be a really credible decision because Simon is really exposed to what goes on.
Not just in Australia but all around the world, so I think that’s a good thing. We sold to someone who understands the model and can work the model and create more value, and yes you’re right. We were incredibly discouraged in the early days of Artshub, which is why we didn’t take any investment apart from friends and family, and we grew a business completely out of our own resources to a saleable product.
This time around (with CollectZing.com) I think that we would prefer that we didn’t have to do it that way, simply because the model that we’ve chosen we believe is a much bigger model. Much much more mainstream than Artshub was.
It’s global and also what interests me is that I think it’s fundamental to how human beings are.
Tell us what it is.
It’s an online social network for people who collect things, and that’s collect anything really, because at heart, just about everybody is a collector….
There are several bits to CollectZing.com, but it is a way for people to connect up with others who collect the same thing as them. We’re adding a trading platform in the next couple of weeks. It will not be anything like eBay. There is a lot of flexibility in the trading platform and we’ll be introducing a currency called the ‘Zing’ that can be utilised throughout the site.
So it’s a form of money?
It is a form of money and there is a point at which people will pay with their credit card to accumulate a start up quantity of Zings, but you can earn Zings on the site as well as spend them and…
It’s almost like Second Life or something.
It is a little bit like that but I think this is connected... very much connected to one’s first life because…
..it’s a passion.
It’s a passion, whatever you collect…
Give us an example. Who might be on there? Who might have an interest in this?
That’s quite fascinating, because when we did our research the target, the largest target market is in the United States, it happens to be regional areas and there are plenty of housewives or women who work from home that run these secondary businesses. They’re based around the things they love to collect and do a lot of the trading.
So they’re the hobbyists. They’re at home…
..actually bring in additional income into their family.
Fantastic. So it’s where technology is going to enable these home hobbyists to actually build viable businesses.
Little businesses, and many people really, they don’t do it for business reasons. They don’t do it to make money. They’re looking to complete a collection or to offload a collection that is no longer part of their world and to build something else.
What might the collections be?
So far we have a wide range. We’ve got a snowdome collector, quite a few stamps, we have got some of the dolls of the 90s and one of them was this incredible Zena-like doll – Princess of Power she’s called.
And there is a Perth collector who basically had all of these dolls as a small girl, gave them all away as she was growing up and now in her late 20s wants her toys back. This is what she says in her profile.
I can really relate to that. She’s reconnecting with her history and she’s out there on the hunt to rebuild those collections. She has set up beautiful installations in her house that are based around these dolls.
How fascinating. You’ve got people absolutely now specialising in very very tiny niches and then able to connect to much wider audiences.
Beanie babies. There’s Pez dispenser collections. There’s quite a lot of art work collectors who’ve come on line and are seeking to trade some of their artwork. This is a long tail business because of course art – if you’ve got a very esoteric artist that you want, what a perfect way to find them. And I suppose the more quirky the better. The more ephemeral the better.
And from our point of view we hope that that helps us build a really ginormous membership because the real interest factor to us is the long tail connection that someone in Russia might have some incredibly interesting antiquity that you have been seeking for many many years.
Why would they use you and not eBay?
Collectors? We’ve read eBay’s own research saying that collectors really really don’t like using eBay. They think that the model is only transaction-based.
There is no room for them to share a whole lot of the other values that go with the object, which aren’t just about its financial cost or its cost to realise. Realisable value.
So we see this as being bigger than a transaction model and we see the value as being bigger than a transaction model because we’re hoping that the Wiki, the Collectopedia, will end up as the world’s biggest database of knowledge around collectable objects. That has many facets to it.
I mean educationally what an amazing tool as well as something you would use if you collected something.
So what’s the business model? Where’s the money come from?
There will be several revenue points. You’ve got your Zing. You can buy your Zing. That’s more to do with the trading, so of course when transactions occur there will be a Zing, or it will cost a Zing or whatever to do that transaction, and that will be one point at which we’re able to take a cut. Advertising will clearly be the key income driver. The next will be the transaction income that we will be able to achieve once the transaction capabilities aside really.
With advertising, who would advertise?
We’re running our ads with Google AdSense at the moment and we’re getting a really good return off a really low base and we hope that continues to scale in that way.
So how many people are on your site at the moment?
There’s a couple of thousand which is pretty small.
And so Google works for that?
It’s worked so far. It may not be the best model as time goes on, but our theory is that you don’t try to lock yourself into one way of viewing your product at the outset because we may want to change that as we go along and take control of the advertising. Right now we don’t really want to have to do that. What we want to focus on is building the membership and building the audience.
Now how are you building the membership? How are you building the audience? How are you marketing it?
We’re using Google on the other side, which is OK, but we’re not as ecstatic about it as we’d like to be.
So our other strategy is something that we always wanted to invest heavily in which is to go directly to collector groups and ask them to run their group on line so we’re providing a broadcast platform for them to have a full online network.
A lot of them, they meet once a month and that’s great but if they choose to use us they have a way of getting in touch with each other all through the month.
What do you offer?
Well I’m not quite sure yet. They can broadcast to that group. They can have an open group or a closed group. They do have a whole series of functions but I must be honest, I haven’t really got my head around it.
So will you be inviting content too? I mean how important is content in this model?
At the moment we’re not. What we will do as time goes by, our key thing is building the audience and we believe, we could be wrong, but we believe that content actually will come out of this audience so we will be able to take leads directly out of some of the transactions and the stuff that goes on, onsite.
We don’t want to get caught in the news model because we actually do want, but we want the balance of power to be more in the hands of the user than in the owners. The architecture of it. We want the user-generated content is really the model for that and there’s a real reason for this is that these people own these objects and they have personal as well as a common history.
So would you be running forums in each of these?
There’s forums. They’re called collector clubs, so people can set up a collector club in a specific area of collection and there are a number of those already underway, and some of them are incredibly niche and some of them quite broad. And basically they are forums and groups where a whole lot of tips and tricks and ideas and knowledge is traded.
And how do you monitor those? Because the forums, they’re very intensive to monitor.
We allow people to nominate themselves as the president and there are some rules, some basic rules that we’ve set up right across the [site]. Our key thing is we want this site to be ethical. We want it to be friendly.
I think some of the big social networks can actually be quite dysfunctional and therefore a lot of our rules for engagement are about how people conduct themselves in those sort of dealing with others. We’ve had a couple of inappropriate sign ups that look quite pornographic but we tell them to get off the site and…
And they go?
Yeah, they go.
Yeah, because it’s a problem.
It’s not OK. And that’s not what this site is about and this isn’t a social network like MySpace. This is based around what people do offline already and it’s an ability to share that with someone who does the same thing but in the online world.
Have you got competitors out there?
We’ve got one obvious one which is collectorcar.com in the US. They have about 5000 members and they started over a year ago so they haven’t grown incredibly quickly. We’re not quite sure why. We’re hoping it’s because they… developed by a couple of geek collectors.
Without your knowledge of all the other areas of the business.
And I’m not sure that we’re that fantastic but we do have a big global vision, and I think sometimes it just helps to have a big vision and just to keep chasing it.
Are you taking any investors this time?
We’ve financed to date all of the start up, the research, the start up, the technology and the marketing to date ourselves. We will take in a round of investment. Terry Cutler who joined us with Artshub is joining us again with CollectZing.com.
Terry’s fantastic and he’s been a wonderful mentor and when David and I sat down and decided… asked ourselves the question who do we want to do this with, I mean we said ‘we want to do it with Terry again’.
So is Terry going to put money in?
We don’t want him to do that because we actually would prefer that he added his knowledge. And also I suppose he helps us think better and sometimes I think when people give you that level of value you need to honour that, and I don’t want to ask Terry for money for that reason.
He is very valuable to us as a team and he has an equity position because we chose to give him one because we value that knowledge and wisdom.
So how much will you need?
We think… OK, well since you’re talking money, we’re actually on the spot this week because we’re torn between two ways of looking at it and one way is that if we raise $200,000 now, that would keep us going in terms of growing the business not even taking any account of any income until the end of June 2008.
You were telling me you don’t like being unprofitable, well I don’t really like seeing large amounts of money walk out the door either. We’re kind of in a similar situation because the other choice is to just go and raise $US3 million right now and roll out… I mean do some hypothesis testing, and roll the whole thing out which would mean a shift to the states for David and I and the family, and there are issues with that because our youngest was diagnosed with Downs Syndrome and has a heart condition. So I’d prefer her to have her surgery here. That’s the truth.
And so it’s probably good being around home as well.
We love our baby, she’s fantastic, so just in terms of family support while we get her heart done.
We don’t get that, and we never really have so… and I would love to go to the states and I actually think it would be good for all our children to be exposed to another world view.
This is an edited transcript.