 Alright, well thanks for coming. This is going to be interesting because I've never given a talk quite like this before, but I wanted to do something a little bit different, a little bit less technical, and hopefully share some wisdom. Hopefully this will be useful and not just some guy reminiscing at you for the next hour. We'll see. So how many of you are LWN subscribers? Not a seven, seven, seven. Hey, very cool. Alright, well thanks to all of you for all of that. LWN is a LWN oriented news site is the way you can put it. We put all kinds of useful stuff out there and supported by our subscribers, supported by people who actually pay to to read the content and all that, and how this model came about and how it works, and stuff that I will get into, but that's the core of it. We've been around since, actually technically since 1997, but we first published in 1998, and we've been messing with it ever since. We currently have three employees. That number is varied as high as five over time, and lower than that. Several thousand subscribers, including over a hundred companies that have chosen to subscribe to us to give their employees access to it. So we can get into how this came about, but we'll have to go back to a little bit prior to the beginning of the Linux era, back when me and a number of other people were working at this place here. This is the National Center for Atmospheric Research in Boulder, Colorado, which is where I actually got my first job when it was still in school, got to do all kinds of fun things, started by actually filling out punch cards, describing sweeps of a Doppler radar, so they could be processed, that sort of thing. Got to program Cray 1 serial number three, the first Cray they actually sold. Really nasty machine to program, by the way. Sort of moved into divisional system administration and programming and real-time data acquisition and visualization. I first came through Brisbane back in the early 80s on my way to the Solomon Islands to set up a remote operation center for a meteorological field experiment. This is the only picture of the software that I could find that we did. This is a real-time data acquisition. Use it for controlling research aircraft, things like that. It was a lot of fun. We ran it on things like suns, all that, and then we eventually ran it on Linux machines when that came around. I don't know who that clown is who's playing with it. Anyway, so I could do all kinds of stuff, all this sort of thing, and I ended up kind of over time as things happen. Managing a few people, managing a few more, and then sort of jumping into the corporate politics because you either jump into it or you accept whatever the other people do with it, and so on. This was all kind of fine, and so on, except that after a while I found that I was living my life in a meeting room. Got a little tired of that. There came a point, really starting about 1996 and a lot in 1997, a bunch of us were getting together and talking because life in meeting rooms was kind of annoying. I got really annoyed with the research lab environment because I found that whatever rewards you got were totally disconnected from whatever work you were doing. You do great work. Everybody works their butts off for a year, accomplish all kinds of things, but the Republicans get into office and they don't want us to fund science, and so there's no raises for anybody and half of you get fired anyway. Then another year everybody sits around, but the budget comes around different and there's money everywhere, and I got tired of that. I wanted something where there was a more direct correlation between what I did and what came back and I felt that I had a bit more control over it. There's this thing called Linux that was coming along. I first started messing with Linux about 1993. Ordered a little computer from a company called Fintronics Systems, which I don't know how many people dealt with Fintronics. I dealt with a guy named Larry for tech support. That was the beginning of VA. That's what that was. We were messing with it. We were using it for real-time data collection about 1995, that sort of thing. It seemed pretty clear to me that it was going to go somewhere. I was talking to some other people I was working with and we thought it was going to go somewhere, so yeah, let's start a company. I started with a lady named Liz Koolbaugh. Some of you may have met early on. Liz had to leave the company some years ago now, but she was really crucial in getting this whole thing started and remains a good friend of mine. What kind of company? This is where things came to a bit of a crunch because I worked at NCAR for 18 years starting when I was still in school and did that. I learned a lot of things, but one thing you don't learn in a research lab is how to run a business or how to design a business or even anything like that. This was true for all of us who came into this company at this time. There were about three of us before who tried to start this off. It was like, okay, we'll be a Linux consulting company. We're smart. I'm sure someone will want to pay us to do something. In the meantime, to show everybody how smart we are, let's start this little website because we're following everything that's going on. There's a lot happening in the Linux world. There were, I don't know, 1,500 messages a day on the Linux kernel mailing list. Nobody could keep up with that. We thought we would pull this stuff together and put it out there to show the world how smart we were. We started this thing called Linux Weekly News under a domain name that nobody could ever type right or anything like that. It ran behind an ISDN line in my basement this time. It was, again, supposed to show how smart we were, but somehow that wasn't enough. Actually, since we didn't really know what we were trying to sell to people, strange enough they didn't buy it. After a while, I said, okay, let's do something a little bit more defined. Red had this point announced that they were going to get into the support business because there was, after all, no support for Linux, as they said in those days. They set up this support partner program where they were going to work with independent support providers all over the world and provide this nice, higher tier support network for it and put their name behind it and market it and all that sort of stuff. It was going to be riches for everybody and so on. We signed up for that. You can read the details of how that worked on LWN if you look for it. Stuff published much later on. Suffice to say that Red Hat was still looking for its own direction at that time. They had a management style that was most interesting in a way of dealing with things. The sort of upper level support that they offered did not actually come to be. And so that whole program, especially once Intel decided to invest in Red Hat, then they just canceled it because it wasn't where they were going anymore. They were going to do it in-house and so on. So that went away. So it said, okay, we can't do that. But at that time I went and I did a tutorial of the first Linux world on Linux system administration and I just said, okay, I'll do this and almost 500 people signed up for it and said, no, people are interested in that. We'll be a training company. So we went into the training business for a while and we ran some classes and so on, but I should have actually back to my end card days when I would get this thick catalog in my mail every other week from various training companies with all the stuff they offered. And we were trying to compete with those folks who had these incredible marketing budgets to sell the stuff and so on. And LWN, even though it was growing, was not enough to compete with that. And besides which we didn't really know how to sell anything. So in the end that didn't really work out very well either. But in the meantime we had this website out there and it just kept growing. It was taking more of our time. We were doubling our time into maintaining it. So we said, okay well, what the heck? Maybe we're an online news company after all. So initial sort of lessons that came from this is that actually it makes sense to have someone who understands business. And not just to sort of say, okay, we're really smart people. I'm sure this will work out properly. I'm still not sure we have somebody who understands business but we're getting smarter. You should really have some clue of where the money is going to come from. What is it that people are actually going to pay you for? We didn't have that for a long time. We didn't really know what it was that we were selling to people. And so as a result we sold very little of it. And pay attention to what your customers like. All this time when we were trying to sell these things we had people saying, well what you're doing over here is really great. So yeah, that's great. I'm glad you like that but we're selling this. And it took a long time for us to realize that actually our bread was buttered over there because that was something that we were doing that was truly unique. That it didn't seem to be what anybody else was able to offer at that time. So it took us a long time to get there. And it took us a while to get to the point where we were ready to make that jump. But we had to change our plan several times. I think every business is like this. You know, just like, well no business plan I think really survives an encounter with the real world. And ours didn't. And so you got to be prepared to change. So okay, we're an online news company. So where's our money coming from? And so we looked at various things. One of them which we got pulled in again at the dealing with this particular company. Which at that time, I don't know how many of you remember this after that investment sort of between then and when they went public. They were going to be an internet portal company. That was their actual business. Right? The distribution and all that stuff. That was out there. That was cool. But it was their internet portal. It was going to really make it for them. And so as part of that, they actually tried to acquire us with a deal that was I'm just glad we didn't take it. Let's put it that way. And all that sort of stuff. But we worked a deal with them where they actually took some of our news and re-badged it, took our name off of it and put it on their portal as a way to do it. They put us up next to slash.stuff that they got and a couple of other things. And so on. And that actually paid our bills really nicely for a little while until they decided that actually the portal business wasn't going to do it for them either. So they changed our mind. We changed ours and we were making some money from advertising. I'll get back to advertising. But in the meantime, about this time, we sort of had this notion that, gee, everybody's getting acquired. And so other people who were in that area, slash.got acquired, Linux today got acquired. Those were sort of who we saw as our competition in those days got acquired. It's like, okay, how about, maybe we should try that too. We might actually get similar to this. And so I thought about it. And one of the few things that I actually did right is I thought about two or three people and I just sort of, let's slip to them. Hey, you know, we're kind of taking offers right now. You know anything? And sure, soon enough the phone was ringing because this was, this is the dot com bubble, right? You could do this. And so by the end of it, we had letters of intent thrown at us from seven companies over the course of a few months. And others that we were turning away because we simply had, did not have the time to evaluate their terms, to visit the company and talk to them and so on. It was really the weirdest time of my life to go through all this. And so I started going to people and saying, well, how do I make this decision? We've got these people, you know, Linux care is going to be really big time money and everybody owns Linux care is going to be totally rich. You know, it really looked that way. I mean it honestly really looked that way. You can laugh now. I laugh now. It looked that way. All right. You know, all these other people, I mean people owned VA really did get rich, at least some of them. That sort of thing. Some of these other companies perhaps a little bit less so, right? Some of the companies went away. Some of them were essentially criminal in their operation and so on. But we didn't really know this. We're trying to figure out how we're going to make this decision. And so I talked to some people and a couple of things that were given to me. Which company is going to be around five years from now? And I was like, well, gee, everything is exploding. I'll be here. I'll be rich. But one other bit of advice that came to me that was take the money and run. Certain of these companies said, okay, yeah, me will acquire your company. We'll hire you on. Good run. But the main thing that we're going to give you is this big pile of stock options. It's like, okay, yeah, those are going to make us rich for sure. And other companies said, okay, well, here's some stock because you didn't do a deal with that stock in those days. That would have been crazy. But other companies said, well, here, I'll also give you this nice pile of cash. It's like, hmm, okay. The cash isn't going to grow, the stock, I don't know. But I talked to some people in business and said take the money. And so we did. We waited that very heavily when we made this decision. It was one of the best things we ever did. Because we were really right towards the end of the .com era acquisitions. One of the very last ones. And things went down right after that. And we weren't going to get that stock jackpot no matter who we went with. And an interesting thing that came along part of this is this is right about when a couple of people in the company decided they hated each other. And they didn't think that their ownership of the company was right and so on. And so right as we're trying to negotiate this deal, suddenly this thing blows up in the middle. And it's not the right time for that, shall we say. They have something like that. So we had to work this out. And the good thing is probably perhaps because we have a real focus on bringing people we really know and trust into the company. We were able to work this out and resolve it and not expose it to the people we were talking to. But in general, you should have a good idea. You've come together, you've made this company. What happens when somebody wants to leave? How are you going to deal with that? How are you going to keep it from destroying whatever it is you've got going on at any time? So, what happens? After acquisition.com crashed shit. Other kinds of crashes happen. Everything kind of falls apart. And the days when you could get a lot of money just by saying we do Linux or other things. I had a whole collection of press releases that came out in those days from companies just saying we run Linux so you should be buying our stock. Seriously, all that went away. And 2Cows, which is the company we eventually sold to, decided alright, this isn't going to work out. We're not going to do this. So they actually gave the company back to us. So they gave most of it back to us. And kept a little piece just in case we do alright. They treated us very nicely. Which is really one of the lessons I think is important. Deal with decent people. One of the reasons we want 2Cows besides the fact that we liked their offer was that they really seemed like good people. They seemed like they had real integrity in how they worked and how they dealt with people. And they showed it when things went bad. And they're still our friends even after they deacquired us. And I think that's the way you want to do business when you can. You don't always get to choose your partners. But you should when you can. So we're on our own. What are we going to do? Well, we'll live off the advertising revenue because that was working okay before. We'll just sell ads. Everybody's selling internet ads. That sort of thing. This was the .com crash. Shall we say it didn't work? So, I mean, I want to talk just a minute about advertising because a lot of people still think they're going to build businesses around advertising. And there's something you see in the open source world where you don't necessarily sell software as such. Or you're not selling your valuable intellectual property in this sort of way. So what are you selling? Well, maybe you're selling advertising. And I would really advise people to avoid that for a whole lot of reasons. Beginning with the fact that it's a very cyclical business. If you're trying to build something stable, say you want a lifestyle business, this is a very interesting lifestyle. I mean, if adrenaline is your lifestyle, this can work for you. But otherwise it goes up and it goes down and there will be really lean times. The business model I have decided after all these years is something that I don't like. Your business model is you're delivering other people's attention to advertisers. That's what you're doing. So you have to say, okay, well who is your real customer here? Is the customer the people that you're writing for, your readers? Or is the customer the advertisers, the people who are actually giving you the money? And in my mind it's really clear that it's the advertisers. This quote, I don't know who first said this. It wasn't me. But I stole this quote from somebody who says that if you're getting the service for free as such, then you're not the customer. You're the product. And so it puts you in a position where you're dealing with people and you're making them into a product. And depending on how that works, it may be a good thing, it may be not. But it's a very different sort of business. And it can distort things. I talked to a guy who was running another, I actually hired a guy for a while who was running another new site back in the early days. And he told me that when he was running his other site, they made very explicit under the table deals with advertisers in terms of you buy this advertising with us, we will run articles on your products and so on. We have never done this. Nobody's ever even asked us to do this. Well, that's not quite true. A couple of people have, but we've never done this. And our business model is such that it would make no sense for us to do that. It would be a really stupid thing for us to do. And I like that. I like that a lot. The incentives are right. Advertising. You lose control, especially with ad networks. If you have something like a site, you're putting it up, you're giving somebody else a piece of your space, saying, you know, do what you will with this. And so one example, if you're dealing with, say, Google ads, you say, okay, well, really honestly, we'll block ads from Microsoft.com. You know, I don't really care if I get Microsoft's money, but it's not. It gives people an impression of our site that I don't like. I don't want them there. And so what's that? Yes, yes, it did not do them any good to take those ads. So then this worked fine. I blocked them for a while. Then I went to Ottawa for a conference and I pull up my site and I see Microsoft ads. Like what's that? Like, oh, I didn't think to block Microsoft as CA. It's like, okay, well, maybe I could block that and a couple hundred other countries and all that. And then you start seeing getthefacts.com showing up. All right, which is a Microsoft website. And I realized that the whole whack-a-mole thing is just never going to work. You don't have that control. You can block specific things only after you know about them. And you can never, ever get them all. And it gets worse than that. We had troubles sometimes with people with ads with brown teeth and things like that that would pop up on our site, crap like that. This wasn't on our site, but I was showing my wife my nice new G1 phone and I pulled up some application and the ad right there, it rolls for your G1. And my wife was kind of new. Can't you get a knife from me? I don't like that. So, how many of you know what Proposition 8 means? This is American politics. This is a ballot initiative in the state of California depriving people who want to get married of the right to get married, depriving gay people in particular of the right to get married in the state of Colorado. Oh, sorry, not in Colorado, in California. It's important. Okay. Because we are not in California. We're in Colorado. So, Google started running ads in favor of this ballot initiative on our site to readers in California. We're in Colorado. We never saw them. We didn't know about this at all until the hate mail started coming in. And the hate mail was vicious. And I can see it. I felt the same way. And so once it was there I was able to whack it off and I complained to the big mother machine and never heard a thing back about that. And almost did away with advertising entirely at that point because that was, I thought, such a violation of the trust that we put them. But this kind of thing will happen to you if you're doing advertising. So I really, I dislike the I dislike the model, especially since the money in general is not all that great. Unless you have really high volume or you have really good salespeople who can do it for you, it's not going to do it. It tends not to work so well in this particular community. And we make just enough from the Google ads to make it, so that we keep them around. They pay for our bandwidth a little bit more. But I may wipe them out because it's just, it's not worth it. And all this stuff out in TigerD already talked about that. Don't need to do that. But we have turned down things. Microsoft, Novell approached us saying, can you market this for us? And now for us, quite a bit of money to do it. And I just don't think I could take that money, even though I really wanted to do that. So ruins your customer's experience. I don't think we need to get into that. But the other thing that I found in this particular case is that a worldwide community of Linux developers is very hard to advertise to. Likely as not, they're not going to see the ad in the first place. And if they do, they're not going to be too impressed by it. So advertisers tend to not be impressed by the results that we got. That sort of thing. It's just, it's a hard thing to advertise to. So in the end, for all these reasons, advertising didn't work for us. I'm not going to do it. Tried the tip jar approach for a little bit that didn't really work for us either. And so in July of 2002 we put up a message saying, okay, we're done. This is a nice idea. But the money is not there. We're going to have to go off and get real jobs now. So what happens when you do that? People put $35,000 in our tip jar over the course of about a week. That got our attention. Most of them attach notes saying, you know, that's great. Thank you for what you've done so far. We appreciate it. Here's for that sort of thing. And people started asking us again, well, why don't you try subscriptions? And so I thought, well, why don't we try subscriptions? Well, obviously it's not going to work because nobody ever pays for anything on the web. Guys, even if they did, Linux users are total cheapskates. People were saying that back then. They still do, but they were definitely saying that then. Linux people just want everything for free. They won't do it. They won't pay for it. That sort of thing. But I figured, well, all right, how about we give it a try? So we gave it a try and we frantically hacked on the site and we kind of rebirthed ourselves as a subscription publication. So I'll say once again, listen to your customers, right? Especially if they're throwing money at you, right? Yes. I have heard this rusty hum. It's really true. Listen to your customers, right? Because you can't, as Arjun was saying before, you can't do something just because a customer is offering you money to do it. But listen to what they want because it's often the direction you want to go. So this is an interesting time because we almost died almost right after that because the credit card company said, well, gee, you got all this money and oh, it's international cards and so on. So they actually reached into our bank account and pulled the money back out of it, which got our attention, shall we say? What? The credit card company, the company that we deal with for processing credit cards, took the money back out of our account on the basis that they thought it might be fraudulent. Right? Some real risk alert went off somewhere and so they did that. So I'm actually going to talk about it a little bit because for a lot of businesses you have to deal in credit cards. You really have to. But it's really a pain. It's expensive. If you ever thought to say your cell phone bill or your cable TV bill had a lot of weird fees on it, try reading a credit card merchant account statement sometime. There's all kinds of things. If you don't give them the right address information, then they charge you more. Otherwise, you end up asking all your customers for your address and customers sometimes don't like that. And if they're outside the U.S., it doesn't matter anyway. So all that, or international charges, most of our business is outside the United States. So every one of those charges costs more. Affinity cards, if you've got one of those nice little mileage cards, something like that, then the cost of that is actually a part of the cost. At least it's taken out of the merchant side. Those cards cost the merchant more than you use them. Something I didn't know before. And various other sorts of things that are listed as essentially arbitrary charge for the hell of a charge and things like that. And you can go and you can figure out why they charge you this or that. But after a while you just give up on it. It's expensive. Credit card banks are not nice people. They're banks. After all. But the relation that you have with a bank when you're a credit card merchant is very different than say if you're a card merchant. It's totally different. You may think that banks are not nice to people who have credit cards. And perhaps they're not. But they're way, way nicer than they are to merchants. They hold all the cards in the merchant side. You have to have this. And they deal with it properly. But they're also really nervous because they are in fact issuing a kind of credit to the merchants. We are selling people a service that extends out over a year or so into the future. If we go out of business next week all those people who charged the subscription to us on their card are going to go back to their cards and say I didn't get what I paid for here. I want my money back. And the banks are pretty much going to have to do that. So they're in a sense fronting some money for us. They're giving us a kind of credit. That's just something that you do when you enter into the credit card world. And so they're nervous and not entirely without justification. I have to say that's just part of how it goes. So you have to deal with them very carefully. And there's this whole thing called charge backs. If a customer disputes a charge often they win. In particular if it's an internet charge they always win pretty much. You really have to go out of your way to deal with it. And this happens a lot. Merchant banks will compete on the basis of how nice their system for resolving charge backs is. They have this thing that will make it easier for you to go through and deal with charge backs. And try to dispute them or just deal with them whatever. Something like that. We have had maybe five charge backs over the course of the better part of ten years. So we've been really lucky that way. But a lot of other people have a whole lot more trouble that way. That's really hard. The other interesting thing about credit cards is security. If you lose your customer's credit card numbers the customers are not happy with you but they are the least of your problem at that point. Who's really not happy with you or the banks. And all of a sudden you find yourself facing perhaps very very large numbers in terms of damages that have been caused by the loss of these credit card numbers. That sort of thing. It can get incredibly expensive. As well as you lose the ability to take cards which kills your business. Likely is not. And so on. And you can say this kills the business but I didn't think mentioned that if you are a small business getting a credit card account you sign for that account personally. You don't get to hide behind your business for something like that. So you're taking a real and honest and serious risk with something like this and you have to be very careful with that. So you have a security issue that's beyond the normal sort of I don't just want people messing around on my server. You've really got something to lose at that point. So like I mentioned they require personal guarantees for that. They're dealing with this whole thing called PCI compliance. It's an incredible set of rules for security which some of them make sense. Some of them don't. Companies that will scan our server for PCI compliance and they're always complaining at us because they say you're running an old version of open SSH which has got holes in it. It's like well no I'm not. I'm running Red Hat Enterprise Linux or something very closely derived from Red Hat Enterprise Linux. And it has been patched right. These holes are fixed. But they don't understand this. And so you're always fighting this sort of thing. And they take this really seriously in fact. They take security so seriously at that part of the business that they charge us 25 bucks a month for not being compliant. Yeah, that's it. That's how seriously they actually take it that sense. But if things go bad they will take it very seriously indeed. And it will come to you. Yes. I have been threatened not catching my server to be on the same network as a commerce server. That we will a lose our credit card and be able to find us thousands of dollars a day. Yeah, I mean you run into all kinds of weird stuff. It's a pain. So the thing is though you can't avoid it in a lot of lines of business. It depends on what you're dealing with. But it's your display. You have to be very careful with it because if it goes away you're just dead. Yes. Next slide. So one thing I've learned. This is a good thing to learn in general. Keep your main stash of money somewhere else. Somewhere that they don't know about. You know, if things go really wrong they will find it anyway. But they will not just be able to whisk it out of your account on moments notice. And I've learned the value of that. Donations are a very hard business model shall we say. And credit card companies don't like it. And have alternatives. So there's other sorts of alternatives. We had a question about PayPal. PayPal is between 5% and 10% of our revenue stream. And PayPal has just dogged all kinds of horror stories. But it has always worked just flawlessly for us. I can't complain about it unlike the credit card side. Which we have some horror stories for. So I don't know but it was PayPal that kept us going when the credit card thing totally choked on us. That sort of thing. But it's out there. Costs about 4%. I didn't put up credit card costs but credit card costs can be either below or above that number depending on what you're doing. Checks are a pain to deal with especially internationally. We do have people who send us checks from far around the world and it costs us money to cash them and so on. But we deal with it. You know, a lot of lines of business here instead of actually dealing in this line of things at least in the United States and elsewhere too in Europe. In Europe they are very big on their PO cycle and you have to do everything just right. And if it doesn't say invoice on the right part of the page then they won't pay it. It's a real pain and you're sort of net 30 terms that they then force you to do net 45 or whatever. Or just sort of when they start thinking about how late they want to be in paying you. Getting companies to pay can be a real pain in the butt. It's really painful but in some lines of business that's what you have to do. You have to deal in that world. And if you have that you need a good cash cushion because you don't really know when the money is going to come. It comes in big chunks when it does. That sort of thing. And various other things that you can look at. Services like Google Checkout on Amazon they work. They're actually even reasonably cheap. Google I know is relatively cheap but you have to register yourself with the mothership and not everybody wants to do that and so on. We haven't used it so far but it actually seems like a reasonable service for some people want to do it. Or if you really want to go wild do something like Bitcoin or any of these other sorts of strange services that are stringing up and trying to rework the financial system. I think those are very hard to build a business around personally. So we'll lay a lesson with this. Have a cash cushion. Especially as soon as you've got employees and payroll and all that you've really got to have something there that will get you through because things will choke on you at times. Yes. Well it should be somewhere safe. Yeah relatively safe. There's only so safe you can get but in a separate account at least is a very good thing to do. So where are we? We now have a business where we put the stuff out there more or less on a weekly basis. And subscribers get access to the future content. And everything becomes free after a week or two which is a part of our business model that surprises people sometimes. And I have to justify it. I often have to justify it to my wife who actually says well two weeks that's nothing. You should make it whatever. We do that there's a whole lot of reasons for doing that but it makes us part of the conversation. We're out there and we're part of the wider community. If you go and grep for LWN.net and the Kernel sources or whatever you'll find lots of links because it's out there, it's free, it's available and it's searchable and so on. So I think that's really an important part of what we do is putting stuff out there for free eventually. Yeah that's part of it. There's more to it than that but that is part of it. Yes. There's more to it than that. It's also the cost of our being a part of the community as opposed to something just trying to sell to the community. I really see it that way. There's also various type features and the ability to disable advertising. Various things you can turn on if you give us money. They're part of that but that's basically what you get. We sell this now for $7 a month. There are alternatives for people who want to pay more or for less and various sorts of group subscriptions sorts of things which have grown over time as various companies by subscriptions for employees but it still remains about a quarter of our revenue. The individual subscriptions are by far the biggest part of that. So why does this work? I just mentioned this before. It aligns our interests with our readers. We have one group of people to keep happy which are the readers. We're not trying to then present them to another group of people, the advertisers to get money from something like that. It's a much more straightforward arrangement with the right incentives. It works frankly because people simply want to support us. That's a huge part of it is that they want us to be there and they want to support us. Sometimes LWN feels a little bit like a public radio station in the United States. In the US there's a piece of the spectrum, FM spectrum, that's set aside for publicly funded stations and every now and then they get on the air and they say, well you guys aren't sending money, we're going to go off the air and give this space to a right wing talk show and whatever and that sort of thing. You've got to send this money right now and sometimes it feels a little that way. I'd like to get away from that but that is how it's like that. We have some, it's a business expense for an awful lot of the people who do it and it's non-cyclical which I really like. In 2008 things went a little difficult and our subscription sold steady. We didn't really grow during this whole sort of thing but neither did we shrink. Our readers stuck with this through this whole sort of thing even though the advertisers, which ones we had, flew the coop fairly quickly, that sort of thing and many of our competitors went away at that point. You remember things like Newsforge and various others, a lot of those vanished during that time. We find ourselves suddenly surrounded by people who wanted to write for us who had lost all of their other outlets, which was kind of nice because they were willing to work cheap. Even though in fact part of what we're really trying to do with our business is to pay our writers really the best, the good writers, we want to pay them the best of any outlet that they can find out there because good writers are very hard to find and our readers insist on good writers. Let's see. Oh yes, the Amazon thing. In the middle of this we ran across this website and this guy is saying, I'm making $5,000 a month through Amazon affiliate stuff where you put up ads for products on Amazon and sell them through there and then they kick back a piece of it to you. So we were just trying to mess with that. We weren't getting very far with that so we weren't doing all that and then one day I get up and I read my email and I get this little note from Amazon saying oh by the way all of you in Colorado you're fired because they didn't like a tax law that the state legislature passed and so they just dropped everybody in the state just like that. People who had serious businesses based on this stuff just lost it overnight completely. Now there are of course ways to set up a mailing address in another state and get around all of this sort of stuff and then somebody who was serious about this I'm sure did that but we just you know we're done with that. So lessons from this all this sort of way but one of the main lessons that I have drawn from many things that have happened is that a whole lot of revenue sources is really nice. It's nice to have money coming in from a lot of directions. We have thousands of subscribers, hundreds of or hundred and some companies. Our biggest company is nice to us and quite a bit but it's still less than 5% of our revenue stream. We could lose them and we would cry for a day and we would go on and it wouldn't really change our life at all. If you're ever ever in a business in a position where you're dependent on one company like the Amazon affiliate thing or just a one really big company you're in a really dangerous position. It's just not something you want to be and by the way the government is a company I think along those lines. So why doesn't it work? Because it doesn't work as well as we would like it to. We'd sure like to make more money than we do even though things have improved over where they once were. Perhaps our audience is too small. I think we pretty well captured the kernel development crowd at this point. There's just not a whole lot more of them to sell to. So maybe we need to broaden a little bit like that. There are still people who don't want to pay for web oriented stuff. We often hear from people who do saying you're the only website we pay for at all. That sort of thing. So it's sort of that. And we are just terrible at selling. None of us we don't like it. We don't want to do it. We just we don't have a salesperson and sometimes I think we should. So as Val told me once actually at LCA a couple of years ago what you really need is an evil take people's money person and I think we probably do but we still don't have one because we are a company of friends after all this time even though it has shifted and so on and we like that a lot. A non-evil take people's money person. Do they exist? They do. If you can find me one. I looked at Kindle and Amazon just didn't want to deal with us at that time. They were making it very hard for people wanted to set up as a periodical and selling through them. I understand they made it easier now and I haven't gotten back to it but yes that's definitely something I want to look at. For sure. So I have I have like two or three more slides of all that. Anyway, it's too loud so we're still here. I just want to say briefly pricing. Pricing is one of the hardest things in a business. It's really incredibly hard and so we kept our same price for a long time. In 2010 we raised our prices and we raised them by 40% and I did all these spreadsheets trying to figure, you know, raises and loss rates. How many subscribers will we lose and all that sort of stuff. We basically didn't lose anybody. Well, no, no, they noticed. They noticed but they stuck with us. I put out an article selling it pretty hard and described it saying why we were doing this and so on and they took it. So that sort of thing. Another thing is to think of business as a design problem. I've read a lot of business books, most of which really, I don't have much of opinion of business books honestly, but this one is not bad. And one of the things I've seen is that a real business is one that works when you're not there. If you have a business that requires you to be there then what you have is not a business, you have a job and you not only have a job but the boss is a jerk. So what you really need is that you need to think about the business as its own functioning system and try to design it that way. It's really hard to do because especially I set myself up with this weekly deadline on the idea that I was freeing up my life. And you find yourself in a business where you're shoveling coal into the boiler all the time and never really thinking about the direction that the whole thing is going. But every time I've stepped back and done something more meta with the business and redirected and thought about the business rather than thought about what I'm publishing this week, there's always been a good thing to do. You really have to step back from the business and think about the business and design it. It's something you're designing. It's a program in its own way. So as I said it's really easy to get caught up just keeping it going and that's really fatal in the long term. So that's where I end. I just want to say thanks to you for listening and thanks to LWN readers who've kept us going for all these years and expect to be around for a while. If there are questions I'd be glad to answer them. Very simple question. How would you prefer we pay you as an international audience? What's the best for you if we can do it? You know international honestly to pay us as an international subscriber credit cards or what works or pay pal. One of those two. I didn't put that up but there are companies that pay us through international wire transfers. And given the global nature of our economy I've always been amazed at just how flaky international wire transfers are. They go astray all the time. You have to track them down. It's amazing how badly that works. So credit cards and such really work best for that honestly. I find it really impressive that you basically just documented how well you've done something that huge people like Murdoch are trying to convince the rest of the world to do. Do you think it's because you've got a connection with the community? Do you think that's why it's worked out for you? Being part of the community is certainly part of it and understanding what we're doing. We're also obviously trying to operate on a different scale than Murdoch is trying to operate. I mean convincing people to base paid money for web content is the thing that you've managed to do which they're trying to. You have to offer something that can't be found for free somewhere else and that is good enough. Then they will do it. Editorial integrity actually does matter I think not quite a bit. Without that we wouldn't have a business. How many people does this business support? We have three employees currently down from maximum of five at one point. I'm hoping to go back to four sometime pretty soon. How many of the freelance writers? How many freelance writers? We have probably we have three or so that appear in almost every edition now. We've built up a small stable of regulars and we have a much larger crowd of several dozen who will occasionally put something in. I'm really trying to grow it so anybody who's looking to write please talk to me because we're always looking for writers that sort of thing. We've been definitely increasing our use of freelance writers but it's really hard to find good writers and really easy to find bad ones. I noticed that you're still running ads on LWN.net but I wondered if you'd considered running job listings? Had we considered running job listings? People have raised that idea with us every now and then. It's just one of those things that's on the to-do list. That does actually seem something that could maybe be sold to our audience. It might put us in conflict with some of our corporate subscribers if they start feeling like they're being poached through something they're paying for. That's a concern that I've had but we could probably get over that. It's on the list but job boards have popped up all over the place and some of them I think are pretty successful others I'm not so sure about. It's something we'd have to sell and we haven't. We have an audience that people would want to market jobs to for sure and yeah, it's been on the list. The list is long. Why won't you take my money? Why won't I take your money? Rusty is after us to add a higher level supporter subscription level for people who want to pay really ridiculous amounts of money for their subscription and I intend to do that because as somebody once said I think I saw this out of the Unix Fortune program actually. It's morally wrong to allow a sucker to keep his money. But as I said the list is long and it's hard to do things and that hasn't quite made it to the top yet but soon. Before Real Time Linux has merged. He's a really good writer. So how do you find time to stay involved with the community and participate with the community and actually manage to run a business and write all the articles that you do given that the difference that actually makes your business work is the fact that you are part of the community. Little things like raising kids too. Life isn't that optional. I'm going to discuss that with my wife. How do I do it? The next thing I do is I try to dual purpose everything I do. If you look at code contributions that I do for example there's almost always an article associated with it in one way or another. Either that or it's an insulting thing just paying some money some other way. That sort of thing. I really do try to make things work in a lot of ways and there's a whole lot that you can do. If you can write an article about just having delved into something interesting and figured out how it works it's fun sometimes. But I think that's a big part of it. I guess I work fast. I was just going to add to that. For me everything I do in the company is essentially community related. I don't do business and then I spend a little bit of time for the community. If you treat it that way it's not going to be nice in any way. It's not going to work well. People are not going to trust you. If you are a part of what the community is doing anyway then it will work much better and then you don't have to make the choice. That seems like what you're doing because you write an article or you write something for the colonel and that turns into an article. It's the same thing. That's why you don't have to choose. I think we're well into tea time at this point. I'd like to thank you all for listening. I actually had a lot of fun. There is a 30 minute break but for those who want to stay around Aaron is going to show a video.