Insomnia ([info]insomnia) wrote,
@ 2005-01-06 20:11:00
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LiveJournal's worst case scenario that nobody's mentioning...
The economy continues to struggle, Six Apart and its 70+ paid employees never achieve a profit -- like most dotcoms -- and they go under, taking LiveJournal with them.

LiveJournal may not have been as big as Six Apart, but one thing they were was financially secure and completely self-funded... unlike SixApart, which has yet to make a single penny's worth of profit.

And it's not just an issue of whether they make money or not. They can go under because of lawsuits. They can go under because Google drops a hundred million on Blogger developers and forces Six Apart to try to keep up. They can go under because a prominent investor gets upset. They can go under because somebody important dies or decides they want out. They could go under for a million reasons.

Anyone want to take a stab at what percent of dotcoms go bust? Anyone?!

Journal roulette!

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[info]jk_fabiani
2005-01-07 04:20 am UTC (link)
I am a CEO, we must grow, that's what I know....

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[info]deadrelatives
2005-01-07 04:23 am UTC (link)
percentage...dunno...stab in the dark...60?

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[info]insomnia
2005-01-07 04:26 am UTC (link)
Higher. 80% of dotcoms in the San Francisco Bay Area (a very expensive place to run a business, btw) went under in 2001 alone.

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[info]deadrelatives
2005-01-07 04:55 am UTC (link)
wow.

i started indiegrrl.com in 98. we did great for abot 2 years, but the .com bust hit us hard. we manage to keep it together with a lot of member support and a shoestring budget. it is the largest organization for women in the independent music industry in the WORLD! (i capitalize because its funny...as if there are a lot of organizations for women in the independent music industry...not.)

As a much better example, though, look at CD Baby. Derek started in 98 too, and now it is the second largest cd seller on the web (right after amazon.) He just wanted to sell a couple of cds for his friends who couldn't get distribution, and before he knew it, he had an enormous profitable business on his hands.

Two examples of businesses that held on and didn't sell out...I guess we are anomalies.

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[info]insomnia
2005-01-07 09:21 am UTC (link)
LiveJournal held on too during that time period, spending money only when it had it in hand to spend.

Everyone idolizes dotcom startups, but hardly anyone wants to look at them as a kind of gambling. The implication is that you *need* to gamble with 10-1 odds in order to win big... but open source applications don't *need* to win big. They can win small and still have more staying power than other businesses.

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[info]flying_blind
2005-01-07 04:35 am UTC (link)
90%? I know it must be higher than the astronomical failure rate for restaurants, which (last time I heard) was in the 80s.

I'm less worried about 6A going bust than I am about it being pumped up for a sale to some outfit like Yahoo, though. It will go the way of Geocities if that happens. In fact, if it merely goes broke, we might be able to salvage it by buying the LJ component of the company as a non-profit collective, at a fire-sale price. I've always thought that non-profit foundation would be the best way for LJ to go, anyway- provided that the operating organization was set up better than, say, the infight-prone Pacifica Foundation.

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[info]insomnia
2005-01-07 04:43 am UTC (link)
I sincerely doubt that LJ's users would be organized and timely enough to put in a bid if LJ was going under. Rather, news of the company going under would be kept amongst 6A's management, who would try selling themselves out to any corporate buyer they could get. The users would probably never get a shot at it.

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[info]crazyveigh
2005-01-07 04:36 am UTC (link)
Any backup plan yet?
Where is everyone gonna go? :)

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[info]deadrelatives
2005-01-07 04:40 am UTC (link)
deadjournal.com? ;-)

cool icon,btw.

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[info]ocean_song
2005-01-07 04:36 am UTC (link)
yes, that was my point exactly. those of us who lived through the dot com boom know how unlikely it is that mergers like this work for the best, and probably won't work at all. i just hope i'm wrong.

maybe you should start your own?

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[info]granting
2005-01-07 04:50 am UTC (link)
I could cause LJ to go under too.

Or at the very least they'd have to pay a fine and change some policy. Depends on the judge.

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[info]daonnan
2005-01-07 05:48 am UTC (link)
you make baby cry

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[info]solri
2005-01-07 08:42 am UTC (link)
This is why it's so important that as much as possible of the code stays open source. As it stands, if LJ were to go under financially, people could just take the code and set up a similar service, and if they were people with a good reputation in the LJ community, a large proportion of LJ members would simple migrate to the new service. I remember when Mandrake filed for bankruptcy a lot of people on the mailing lists said "Well if the worst comes to the worst, we'll just start our own distro based on Mandrake." (Fortunately Mandrake pulled out of it.)

A worse scenario would be a gradual degeneration in the service, as happened with Geocities, but I don't see much evidence that this will happen.

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[info]reversede
2005-01-08 10:20 am UTC (link)
"The economy continues to struggle..."

Eh? Have you had your head in the sand for the past year?

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[info]insomnia
2005-01-08 11:30 am UTC (link)
Hardly. The economy continues to struggle. Especially for technical companies.

New jobs being created are pathetic over the past few months, and still aren't convincingly keeping up with population growth, and the dollar has fallen dramatically and could potentially meltdown.

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