The media is biased towards stories that want to be told. This is especially true about the media covering the web world. It’s much easier to write a story about Facebook, Google, Youtube, or any of the other limelight stories where much of the juicy details are willingly shared.
We have so many visitors!
We make so much money on advertising!
We got so much funding!
Inflating evaluations are great when you’re listed on the market, gunning for more venture capital, or trying to bail with the biggest parachute. So naturally these companies drip and drop the honey for the journo worker bees and we get all these silly stories about younger and younger people being worth more and more monopoly money.
In the mean time, many of the real stories are never told. The quiet successes by small teams who stand little if anything to gain by sharing their numbers and telling about their success. Lest they attract competitors or other unwanted interest. They’re just happy making millions quietly from happy customers.
I’ve talked to so many of these entrepreneurs in private and have often been shocked by how well they’re doing. And I always think to myself: 1) why didn’t I know about this?, and 2) if only everyone else knew too.
This is especially evident in discussions about successful businesses online. People point at the big media stories and perhaps a few more and think disparagingly to themselves that this is probably it. If you’re not one of the high profile media darlings, you’re never going to get that trip to space. Bullcrap!
Know that the world of successful businesses online is much larger than that tiny tip that peaks above the surface for a reporter to find. There’s incredible wealth being created below. Sure, they’re probably not making billions (that’s hard to keep quiet), but there are plenty of untold millions.
Ariejan
on 30 Dec 08I think your absolutetly right about this. We all do know the stories from the big media.
But can you give an example of a company (or person) that falls in your ‘we do it silently’ category? Or are you just hinting at 37Signals and yourself? ;-)
DHH
on 30 Dec 08The whole point and problem with this is that these private successes prefer to be private. So I’m certainly not going to out and name the people who confined in me personally about how well they are doing.
Which is what makes this discussion so hard because it basically boils down to “I know of people doing well, but I won’t tell you”. That’s kinda hard to verify. So good thing I’m just writing a blog post and not a scientific article ;).
Tempz
on 30 Dec 08Mathaba.net may qualify as an unknown example for the alternative media stories that don’t make it in the mainstream.
Ariejan
on 30 Dec 08I understand you’re not going to give out names, which is a good thing. It’s the whole point of keeping this kind of information private.
The web news you refer to is quite gossipish. It’s not really news, more something for mere mortals to awe about.
Creating awareness about this issue still is a good thing, even if you can’t give any names. As with all news reports, you know to take things with a grain of salt.
Rob
on 30 Dec 08I understand David’s reasons for not wanting to post names but perhaps people who are doing well could post a little info about their businesses as encouragement/motivation for the rest of us … ?
Bob
on 30 Dec 08No one expects you to give out names of people or companies, but how about basic financial info, ie: “I know a company of 5 people making $100K/day” – type of thing? That allows you to make the type of impact you appear to intend to, but really aren’t with your post.
Paul Leader
on 30 Dec 08I think this is the case in many parts of the economy, not just the web.
People have this image that industry is all about the big boys, the big car or aerospace manufacturers, and while they employ many people, far more are employed by successful and profitable small firms around the world.
There are many millionaires out there who made their money running low-key firms doing often pretty boring, down to earth stuff with small-medium sized firms of anything from 5 to 500 people.
DHH
on 30 Dec 08What has surprised me is the number of 1 to 1.5 person teams that have made it big. I just talked to a developer the other day who had a shareware program for the PC that I had never heard of and in an area I never thought you could make money. He had made just over $7 million over the past 3 years. And his revenues had doubled that year.
Glenn
on 30 Dec 08I think it was your business partner Jason who said that the small guys need to stop worrying about whether the competition will steal their ‘big idea’ and just get on with launching and marketing them – good advice indeed – because without the media rocketing the smaller sites to stardom, there must be room for their organic growth or none of us would bother, right? we can’t ALL be overly vain and over ambitious!
NewWorldOrder
on 30 Dec 08This post supports the idea of getting away from your computer every once a while so you can MEET PEOPLE…that’s the only way you’ll be able to discover these “untold millions”
Artur
on 30 Dec 08Well, now I’m curious…
Micky Green
on 30 Dec 08You’re absolutely right, and I’ll use myself as an example (for obvious reasons this is not my real name). I’ve created three online businesses, two of which are leaders in their sector. I make over $500,000/yr and have to work an hour or two per day.
I’d never seek TechCrunch-style publicity for my sites, for the simple reason (as you say) that this would attract competition. Sure, my stuff is clever (I’m a great hacker and have also made good use of my PhD in CS) – but there are still plenty of other people out there who could do the same thing, if they knew about the size of the opportunity.
Simon
on 30 Dec 08I definately agree with this article.
I think another interesting point is how the “private successes” can get boxed into thinking of themselves as a small fish regardless of how much of a market leader they have become.
Not seeing a company up there with the stars sometimes leads you to believe they offer an inferior solution or have lower turnover when often, they are just too busy making money to be spending time sitting with reporters or prettying up their site although this has its benefits too.
Boils down to the old saying that cobblers children have no shoes.
MT Heart
on 30 Dec 08“The media is biased against stories that want to be told.”
My first thought was that you were going to rant about the lack of media coverage of questionable events and behavior of political candidates the media wants to help get elected…
Media biases aside, you’re absolutely correct. I love reading about the small business successes of the micro companies and I really couldn’t give a crap about the huge project the big company just won (or lost).
Dave Hoover
on 30 Dec 08Here’s my story about helping make a tiny web property quietly, and quickly become profitable, and is now well on it’s way to becoming hugely successful (for a 3ish person company).
andy
on 30 Dec 08superb post….
Samson
on 30 Dec 08I agree about the above on avoiding the limelight particularly centered around seeking big press very early.
Though a bad review of can be particularly useful in helping to make your product better in future iterations, a good review often comes as a double edge sword. Since it will quickly lead to competitors, especially if your doing something in a hot space.
Now the response to this usually is as Glenn noted above is “small guys need to stop worrying about whether the competition will steal their ‘big idea’ and just get on with launching and marketing them” and thats true to a point, and if your in the idea stage, or just starting to build it, then you should stay focused on your product and not on the assumed competition. But as you near toward your completion a startup should be more shrewd on how they go about launching.
Cause if you are doing something new and different, you’ll often find its like walking in the dark, and your going to trip over a few things on your way to the other side, and when you get to the other side of the room you’ll have to turn on the light, allowing whatever competition to get to the other side in half the time or less. But before you turn on the light some thought or maybe even a great deal should be expensed on how you’ll build your moat.
Don Schenck
on 30 Dec 08Sigh. I have, and have access to, some incredible talent. But, it’s the IDEA - rather, lack of one - that holds me back.
ARGH!!
The Pageman
on 30 Dec 08d2h, isn’t that what the Long Tail is all about?
Tim
on 30 Dec 08If I had to guess, I would imagine that 37signals probably made around $3.5 million last year, with Job/Gig Board bringing in the bulk of that revenue.
Adam
on 30 Dec 08Great writeup… The question is how do these untold businesses get discovered?
Bob
on 30 Dec 08@Adam
By word of mouth and filling a niche. Joining online communities and working hard to reach out to the people they want to work for. Teach others what they have learned and enjoy what they are doing so that it rubs off on others.
So many ways to get the word out there which doesn’t involve untold money being spent on advertising or pandering to the media.
Raymond T. Hightower
on 30 Dec 08Aesop said it thousands of years ago: Slow & steady wins the race. In order to achieve the level of success described in your post, one must exercise discipline. Discipline in product design, in developing one’s skills (continuous learning), and in meeting customer needs. But discipline isn’t cool enough for a flashy media story, so we never hear about the “quiet successes by small teams” cited in your post.
No need to share exact names & numbers. Micky Green (comment above) and the other achievers have earned the right to excel under the radar.
Jeremy
on 30 Dec 08There’s another problem with the publicity that some companies generate, even in smaller industries. You don’t just encourage more competitors to enter the market, but you get other opportunistic people who try to monetize the demand side of things without actually offering a product. They build and market websites, magazines, trade shows, fake trade organizations, and other low-value plays to intercept potential buyers before they reach the actual sellers of the products in question, and then try to resell that “qualified traffic” to the legitimate companies in the form of advertising. And you don’t even need mainstream press coverage or major blog mentions to have this problem. Rather, every over-hyped press release or CEO interview where a company talks about how well they’re doing and the huge market growth they’re enjoying is bound to attract more bottom-feeders to the market, hurting everyone in the long run.
Tim Jahn
on 30 Dec 08I think the future will see more of these stories being told (for those that want it told in whatever degree). The days of having to be Bill Gates or Oprah to get your story heard are fewer even now.
Interesting paradox though with people not wanting the stories told.
Jack Green
on 30 Dec 08I am a self taught rails developer. The app I made in my dorm last year earns $5k / day.
Jack Green
on 30 Dec 08Quick Followup:
The majority of people using my app are teenage girls. Having a tech journo feature my app would be very bad because teenage girls don’t read TechCrunch, my competitors do.
Francis
on 30 Dec 08There are currently 6.7 Billion people in the world, I wouldn’t be surprised to see an untold story of small team raking in 1 to 3 million dollars a year.
Just stare at Google earth for a minute and you will find inspiration that opportunity to succeed is plentiful.
Diego Alban
on 30 Dec 08@Jack Green: Is that from advertising revenue or paying consumers?
rick
on 30 Dec 08David, it sounds like you might be blindly stumbling into some contemporary issues in media criticism.
These effects you’re talking about are all fairly well known and are mostly the result of the PR industry being well aware of and exploiting the biases of so-called professional journalism.
One of its most harmful biases, perhaps, is journalism’s reliance on official sources. That is, pre-packaged “experts”, press releases, people in power, CEOs, etc.
When newspaper budgets are slashed due to concentrated ownership (from which the priority of the bottom line always wrestles precedence away from quality reporting) or if it’s an illegitimate medium like blogging which has no budget for doing on the ground reporting to start with, this reliance on official sources becomes even more pronounced because it’s just too easy and cheap to let the news come to you.
This is all mostly harmless in the context of tech reporting (except for the occasional insult of seeing a loser like Kevin Rose on the cover of Business Week). The implications for such biases on informed participatory democracy are probably less quaint though, and I can only suggest the interested to read Robert McChesney, Ben Bagdikian, or Noam Chomsky.
Antonio Cangiano
on 30 Dec 08Hi David,
I wholeheartedly agree with you. As a matter of fact, your post inspired me to expand of the topic in a blog entry of my own, called Developers are blinded by the light.
Joe Ruby MUDCRAP-CE
on 30 Dec 08DDT—Booking that trip to space soon?
CJ Curtis
on 30 Dec 08Having an advertising and PR background…publicity in any amount is not necessarily a good thing, whether it’s good publicity or bad. And yes, there is such a thing as bad publicity.
What’s so ironic about the media is that they rarely get anything right, so there’s a general irony in the media “telling your story.”
Nathan L. Walls
on 31 Dec 08@rick Yes, “official” sources get a lot of play, by virtue of position. But, there’s another element here. Reporters look to sources who return phone calls.
Having been in the position before, it is a lot harder to tell the story of someone who doesn’t get around to returning messages from a reporter. Particularly one on deadline. And unless you’re looking a profile of an antagonistic subject (Steve Jobs, Dick Cheney) if the story doesn’t rely on that source getting back to you, you move on to hit deadline.
So, why do many small business stories not get told?
1) The people running the business are busy running the business and returning phone calls to a reporter isn’t shipping product or getting pizzas into boxes.
2) The reporter is on deadline. Maybe her editor wanted one more source and she needs a call back in 20 minutes. You were dropping shipments off at the Post Office.
3) Larger businesses have executives with time to talk about their vision, or PR people to talk … Easier for the reporter to call to get the quick quote.
4) Public companies or companies with investors do a more public job of trying to get their story out there. Press releases, marketing materials, blogs, comments on blogs. Editors and reporters might hold onto that phone number to make a call.
Really, no one’s wrong here. The reporters are trying to get a story in by deadline, the small business owner is running a business. Sometimes these goals do not compliment each other.
The mistake is thinking that stories that go unwritten, or sources that go unquoted, don’t exist.
Chadillac
on 31 Dec 08David,
You’re right. There are lots of little companies out there bringing in a few million. I helped market two online apps in their early years and both companies are probably now at 20 people and $4M/yr. You wouldn’t know them by name because they operate in niche markets (in higher ed). And neither is even the market leader. It took both 1-1.5 years of going in circles, with revenues in the 100-200k range, but the founders persisted and we continued gaining customers (lots of organizations can afford $500/mo). My father and I just launched a web-based card mailing service at www.ClientZing.com, and we of course think we can grow it into a million-dollar revenue stream with some crazy hard work and improvements! There’s definitely a million-dollar business for everyone if your timeline is 3-5 years and you commit to a niche.
Love your products (Backpack) and blog. Can’t wait to try Highrise…
Daniel Massicotte
on 01 Jan 09Isn’t that the whole point of finding out about the “BIG” guys, is that we are able to model ourselves after the big names?
I agree with you to a certain point, but on another level I think it’s important to see life in terms of opportunities and what you can get out of it.
Besides, the media focuses quite a bit on words like “recession, poverty, foreclosure” etc. We need some good news too. : )
This discussion is closed.