The feature article in the October issue of Inc Magazine was Start-Ups 2010: How to Launch Your Dream Company. One of the interesting things that they did was do sidebars of companies that haven’t met their initial expectations. So while the main focus was on the successes, they didn’t completely ignore the struggles, which is something I like because it’s an accurate portrayal of reality.
The one that really caught my attention of course was Finding an Audience Online: Getting attention online is easier said than done, according to start-up founder Greg Stallkamp of Holos Fitness. This was one of those articles where the whole time I was nodding my head because he made all of the classic “first time website owner” mistakes – many of which I’ve made myself, all of which I’ve seen made, and most (if not all) of which I think are avoidable.
In fact, here’s exactly what I was thinking as I was reading it…(bold is the article, my comments are mixed in between, Fire Joe Morgan style)
Greg Stallkamp was always a fitness freak. An avid triathlete, he trained at least five times a week and was always sharing advice on workout routines with friends.
Three years ago, as Facebook and MySpace were becoming household names, Stallkamp, 32, saw the need for a fitness-based social network — a forum in which users could share training tips as well as marathon times.
OK. It’s good that he’s following something he’s passionate about. That’s a good start. However, there’s a crap load of fitness-based-everything sites out there. Not saying that there aren’t opportunities, or that one can’t be successful in that field, but you have to have a better idea of what’s out there. Even a few years ago there were fitness blogs, forums, social networks, e-commerce stores, etc etc. There might be some niches where you can say “I’m going to make the Facebook of X” but not in fitness. A few Google searches would have told him that.
Stallkamp pitched the idea to two similarly fitness-obsessed friends. They felt that, with a small initial investment of about $15,000, they could build the website in their spare time and that once launched, it would be sustained by its audience.
Why $15k? We don’t get their reasoning, but that seems like way too high. For under $1k you can get a vBulletin license with professional installation, hosting for a year, and have some money left over to spend on testing out some marketing. And that’s assuming you have zero technical knowledge – if you can install the software yourself it’s even cheaper. Or you could build a community using other open source forum or blog platforms, depending on exactly what you’re looking to do.
Also, if you have zero technical knowledge as it seems like these guys do, you probably shouldn’t be starting a site with three people, all of whom can’t set up a forum. One person, fine. But three? What exactly is everyone’s role if no one is doing development?
In addition to the social networking features that let amateur athletes connect and share information, Holos Fitness would also feature blogs by professional trainers offering tips on yoga as well as weightlifting. Revenue would come from targeted ads based on the information provided in members’ profiles.
The blogs are a good idea. The new vBulletin has that built right in. He should definitely go with vBulletin and be set up in a weekend.
Revenue from only ads is tough. Real tough. I know – I’ve tried. In most cases, you have to have some other value-added revenue stream.
What Went Wrong
The efforts to get the website built on the cheap failed.
How? They had $15k…
Rather than using off-the-shelf or open-source software, the founders insisted the website be designed from scratch, which cost far more in developer time.
Oh I guess that explains the $15k. What could you possible gain by building it yourself though? Especially when it comes to forums and blogs. The existing stuff out there is ridiculously powerful. And even if you had a good reason, you’ve got to have a technical partner who is doing the development for nothing in the beginning. Really good development of a complex site like this is very expensive and will have a lot of ongoing expenses. Or you could just go with vBulletin, the software with a huge developer community that does everything you could ever dream of for a forum and more…
Additionally, they were unwilling to contract a developer for more than a month at a time, resulting in, over a two-year period, more than five developers quitting midproject to take better-paid or longer-term jobs.
This is just stupid. My guess is that $15k started to deplete real fast, they got nervous, and wouldn’t commit to finishing the project correctly. It also shows a gross misunderstanding of web development. Passing a large scale project from developer to developer results in tons of wasted time and effort and a piss poor hodgepodge result. Again, a technical partner, or at least adviser, is really critical.
Eventually, Stallkamp quit his financial-consulting gig to work full time on the website, which finally launched in early 2009.
Oh man. Really? Why? So you’ve got no revenue, your funds are depleting, and leaving your job is a good idea? Getting the site launched is only a small tiny part of the battle. Getting visitors and users and eventually revenue is a lot harder and takes a lot longer. It’s stressful enough as it is. No need to take away your steady source of income before you can replace it.
But the problems didn’t end there: Stallkamp was relying on word of mouth to popularize the website, but users were slow to sign up.
Ah, very common, very big mistake. Word of mouth is great. All of our sites have benefited immensely from it. Word of mouth, for the majority of sites on the web though, is very slow. It’s literally 1 in a 1000 of your visitors that like your site enough to casually mention it to a friend at some point, which may or may not result in said friend ever even visiting your site. Most people think their site is something special, that it’s going to set the world on fire. Even the “overnight successes” take years and years of work before they become “overnight successes”. Plan for a long-term battle. If you happen to be so good (or so lucky) that your site blows up overnight then that will be a good problem to have…just remember that the odds of that happening are very slim.
“There was a real naiveté on all our parts,” admits Stallkamp. “We thought we could get it running cheaply and in our spare time. And we overestimated how easy it would be to get people’s attention.”
Fair enough. Glad he admits to it. Like I said, I’ve been there and done that. Had he done a little more research and spoken with a few people who had done what he’s doing he would have saved himself a ton of headaches.
How He’s Doing
HolosFitness.com gets 6,000 to 10,000 unique visitors a month; it projects about $30,000 in ad revenue for 2010.
First thought – I doubt that with that amount of traffic he’s getting that kind of ad revenue, or really anything close to it. But let’s just say he is. That’s a great start. $30k a year for a forum is awesome. Now just start a few more of those and keep expenses low and you’re making a great living in a few years. Problem is, he quit his job and has two partners. As tempting as it is, you don’t need three people to run an online community. It can be a one-man job with the help of moderators for a long long time.
Also, now that I am able to take a look at the site, there’s absolutely nothing about it that couldn’t have been done with vBulletin of one of the many other CMS out there. Just saying.
As I said in the beginning, I’ve made many of these mistakes myself, particularly with SportsLizard in the early days. To some degree, it’s part of the process. Then again, a lot of this could have been avoided by doing some research, talking to some people who have started similar ventures, keeping expenses low by using existing software, and taking a patient approach that involved working hard to generate revenue and reach profitability while keeping the day job.