Monthly Archives: March 2009

Why Start (Up) Now — 10/24/08

The following is reprinted from my announcement of the creation of Codename Enterprises. It orginally appeared on the Lullabot  website:

by Ed Sussman

Amid the gyrations of the stock market, and predictions of a severe economic downturn, I have found myself in the interesting position of launching a start up with my friends at Lullabot and Bond Art + Science. Over the past six years, I’ve worked within the comfortable fold of two well known brands in the media world: Inc. and Fast Company, the last four years as president of a digital division with six websites, 40 employees and more than $10 million in revenue. Now I’ve left to be the CEO of a self-funded company formed by Lullabot and Bond Art + Science that doesn’t even have a name for its product yet (even the name of the company is just Codename Enterprises.)

Some people think we’re crazy to do this now. Jason Calcanis wrote a couple of weeks ago that he expects 80% of the start ups already funded would collapse because of the down, part of a “start up depression.” And legendary VC Fred Wilson said companies without angel or VC funding in place would probably have to try to make it without VC funding.

There’s an old axiom, “There’s no bad time for a good company” but that’s a bit flip for the times. After all, some companies with good products are going to fail this year because of the downturn – they won’t be able to cut their expenses deeply enough to make up for lost revenue, and VCs will cut the cord before second or third round financing becomes available. That’s why there’s some panic in the start-up world right now, tempered by lots of practical advice from VCs about tucking in for the long winter of recession ahead. Sequoia Capital’s long slideshow shared with their portfolio companies recently is the best I’ve seen on the subject.

With our fledgling company, we only need to move around headcount numbers on a spreadsheet to make phantom staff we never hired go away. We’re working lean from day one. If this were a funded start up, about three million dollars of other people’s money would have been burned up so far. Instead, we just burned a few more pounds off of Lullabot Jeff Eaton. (That’s an inside “skinny” joke.) By the way, Eaton talks about the technical work done by Codename so far, and the excellent contributions that will ensue for the Drupal project, in this blog post.

That’s been the story for almost a year, now, actually. Day one for Codename was about ten months ago, when Lullabot managing partner Liza Kindred and I started talking about how damn hard the Drupal open source social publishing platform was for the likes of her and me (non-developers), and seemingly, even for the many developers who were working on a large project for me. I was in the midst of launching two of the most complex Drupal-powered sites to date – and – and the separation between the promise of Drupal and the practical restraints were fairly maddening. I advised the Lullabots (the world’s leading Drupal consultants) to start working with Bond Art + Science, one of the best user experience firms in the nation. I also read an amazing post called “How Drupal Will Save the World” by Lullabot CEO Jeff Robbins, that pretty much laid out all the guiding principals that came to be the Codename company.

Some 4,000 hours of development and design by Lullabot and Bond Art + Science ensued. The object was and is to build a hosted platform, powered by Drupal, that gives ordinary people, businesses and organizations simple tools (like drag and drop or point and click) to custom-craft websites with features such as multi-user blogs, social networks, wikis, member reviews and ratings, photo sharing, and custom form fields. With these tools, even newcomers should be able to build feature-rich multi-user websites that go well beyond the boundaries of blog sites, or more rigid products such as and Ning.

“Working lean” is an understatement of what happened. Working for nothing is what happened. Lullabot juggled consulting and Codename to make it happen so far. The excellent user interface experts at Bond similarly kicked in their valuable partner time. An amazing advisory board has similarly been offering up valuable advice: Jeff Dachis, former CEO of Razorfish and senior partner at Bond Art + Science; David Bradley, owner of Atlantic Media; Jeff Veen, founding partner of Adaptive Path and former design manager for Google; and Lane Becker, co-founder of and a founding partner at Adaptive Path.

The Product

But “Why Start Now” isn’t answered just by saying, ‘we know how to do it if we want to, even if it means working lean and in a tight economy.’ “Why Now” requires a deeper examination of the importance of this product, especially in tough economic times.

The short answer is that websites that are social and dynamic are dramatically more useful than websites that are static, and that has a powerful social implication. In his post, Jeff Robbins tells the story of a village in Nigeria that allowed an oil company to use its land in exchange for clean water and schools. Because they had a website with some flexibility, they were able to post the contract with the oil company and bring attention to the oil company not living up to its obligations.

It’s incredible how many organizations and businesses in the United States, let alone the world, still have static websites where they can\’t even change their business hours without going back to the developer who built the site for them. The simplest CMS back-end remains unavailable to them, unless perhaps they keep a blog (which in all likelihood is hosted elsewhere.)

I switched over to Drupal in February, making it a dynamic site for the first time. Within three months, repeat visits had increased 1000%. The site went from a straightforward publisher to a platform for conversation. But it took us almost a year to build and the work of half a dozen full time developers – not something ordinary people or businesses can do.

Yet, think of the practical implications if we could create a widely accessible web publishing tool with great social tools and format flexibility:

  • Small businesses in search of leads for scarce business online could do a significantly better job attracting and creating a conversation with clients. More efficiency means more business and more jobs. Really.
  • Small organizations could tap into the knowledge and needs of their members, and help them better engage with one another. Stronger organizations mean more powerful grass roots social movements. (Or at least better organized bowling leagues.)
  • Bloggers could expand their work into real websites, with highly flexible formatting of pages and forms, rich tools to interact with their readers, and a back-end CMS akin for group blogging to what a major publisher pays thousands of dollars for. Better blogging platforms mean better information to readers at a time when newspapers are disappearing.

Earlier this year I was a judge at a startup competition put together by Jeff Jarvis, one of the great voices of \”citizen journalism.\” We were charged with judging the business plans of a group of grad students who thought running their own websites might be a better alternative to getting a job. A couple of the plans were, in effect, community newspapers, and a big chunk of the money they were after would have gone to pay for development of their sites. A few others involved more sophisticated dynamic tools: bookmarking, ranking and rating, user profiles, and the like.

When our platform reaches its potential, the startup costs for making these business plans real will drop dramatically. Companies will launch that would otherwise have never had a shot. And more start ups equals a better economy — it’s large enterprises that shed jobs during a recession. Job growth comes from small business.

Drupal is a magnificent modular platform that lets you build most any website you can imagine. If only you have the special know-how. It\’s hard even for developers to master, though. And that\’s not good enough to reach the mass audience that needs a social platform to build their websites.

That\’s why we\’re building a layer between Drupal and the end-user — a layer that simplifies choices, but leaves Drupal core intact. And it\’s free.

Can we make money with a free product?


Some websites will want help with advertising. That something I\’m good at, having grown ad revenue almost 600% during my time at and Some will want premium services, like extra storage space, beyond what we\’ll provide for free. And some websites will want to tap into our expertise in how to maximize a social website with great copywriting, custom branding, SEO, SEM, and community building.

The business model for freemium remains viable even in a weak economy. Fred Wilson wrote a good post about this. The services surrounding a free product can be very valuable, and even in the worst economy, people will pay to get help succeeding in whatever is most important to them.

We\’re well aware that plenty of others have their own visions of expanding social media platforms to more people: Ning with better social networks, with better blogs; Acquia with better, supported distributions of Drupal itself.

What we will offer as an alternative is a more flexible format that\’s still straightforward for average users. And we\’ll be improving Drupal all along the way by giving back to the open source project. Jeff Eaton discusses a number of important breakthroughs we\’ve already contributed in his blog post.

We\’ll see over the coming months whether this approach interests outside investors — outside investment money would certainly speed things along. But we\’re going to keep going in any case.

So why start up now?

Because innovation is always important.

Because getting in at the bottom is how you make the most money in the long term.

Because aggressive companies pick up market share more easily during bad economic times.

Because efficient ad-supported media, like radio during the great depression, can and do catch hold even when times are rough.

Because, as investor Mike Moritz put it, the best time to invest is when people are cowering under their desks.

Because people need this product.


What’s the alternative?

On October 14th, 2008 Scott Phillips (not verified) said:
What’s the alternative? Simply throwing in the towel because the Dow had a wild ride this week? Bah. Go get ’em, I say. I can’t wait to see how this turns out. Very exciting stuff.

Fantastic news

On October 15th, 2008 Benjamin Melançon (not verified) said:
It’s always bothered me that the minimum cost for a genuinely good dynamic web site was too much for many people, groups, and even businesses that should have one. And Agaric makes money doing those sites!Best to you and Lullabot in this venture. benjamin, Agaric Design Collective

Something like Elgg?

On October 17th, 2008 Lucas Pereira (not verified) said:
Are you guys trying to achive something like Elgg?

Hi Lucas, Elgg appears to be

On October 17th, 2008 liza said:
Hi Lucas,Elgg appears to be very similar in offering to Ning – a way for users to create their own social networks. This is definitely a part of what we are going to offer!We’re going to offer a lot more, too. We’ll offer social networking capabilities, as well as social publishing, media sharing, wikis, blogs, and tons more.Thanks for your interest, and stay tuned!

It’s the “Perfect” Time to Launch!

On November 10th, 2008 John Smart (not verified) said:
My logic has always leaned toward following the crowd, however, after many hard lessons, 20 years of experience have taught me that I\’m usually wrong to take that path! Now is the \”perfect\” time to launch a serious enterprise..1) Talented human capital is readily available.
2) Every major business is trying to “leverage” their market to survive – The web is their natural means to do this.
3) “Downturns” are ALWAYS the source of innovation, to do it better, faster, employ smarter thinking… (the little “G” company that began in ’98 but “thrived” during 2000-2003)
4) Everyone will “watch” you just for kicks, so you can cut back on marketing expenses. Every press release that hits their inbox will be read! :>
5) Open Source is here to stay…business just wants a solid partner behind it to deliver a solution and hold their hand.I plan to drop all my focus on Microsoft solutions in favor of a value added “FREE” (license wise) solution to my business customers that includes my service delivery aspect. And I have always received better response from the Drupal Community than the “paid” MS support option.Best Regards,

Please heed my Vote of Confidence!

John Smart

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The Media is Social — 2/28/2007

The following is a February, 2008 reprint from my blog at At the time, I ran as president of Mansueto Digital.

Fast Company is about to shake things up again. Back in 1995, in our first issue, we announced on our cover: “Computing is Social.” It became a Fast Company mantra and helped open the eyes of a generation of entrepreneurs to the possibilities of the Internet.

In November of 1997, before social networking on the Web was called social networking, started the “Company of Friends,” dubbed the “Fast Company Readers’ Network.”

The network featured members’ professional profiles, online business discussions that were moderated by volunteer group coordinators, and in-person monthly meet-ups of more than 200 regional groups around the world. (Sound familiar? was founded five years later in 2002 and LinkedIn followed in 2003.)

As progressive as Fast Company was, serving our online community of about 100,000 members was a secondary mission to creating great editorial content.

But no more.

Starting today, we become the first major media website to tackle the following problem: Can a business publication blend journalism and online community to create something better than either by itself?

We think so. If done right. That’s what we’ve been thinking about and working on at for more than a year now.

Why bother in the first place? I could get high minded and talk a bit about what my colleague Jeff Jarvis of [1] and the director of the new media program at the City University of New York calls the rise of “networked journalism [2].”

There are a lot of important reasons why amateurs should be powerfully enabled to participate in journalistic endeavors.

But we’re also doing it because it’s fun. It’s innovative. And it’s very Fast Company.

So what is it?

First off, here’s what it’s not: It’s not a pure social network. A pure social network tries to recreate what Mark Zuckerberg of Facebook calls the “social graph [3]” of a community that already exists. You go to Facebook or MySpace and find the friends and co-workers you already know. The real world gets reproduced virtually. Maybe you meet a friend of a friend.

We’re not that.

We’re an entirely new community of people brought together because we want to share ideas about business. We like business. We think it’s important. Work gives more meaning to our lives. We believe business profoundly helps define our culture.

We don’t always know each other yet. We’re an open community. Feel free to introduce yourself to a stranger with interesting ideas. Try not to pay too much attention to the resume info on their profile pages – pay attention to their ideas, what they write or say.

Personalized profiles collect most everything a member contributes to the site: from a blog if you choose to write one, to your answers to daily questions from our editors, and much, much more.

If members participate actively, we’ll all get to know each other very well.

Second, the site is not an end to professional journalism. We’re still the website of one of the most influential business magazines in the world. Journalists like Robert Safian, Ellen McGirt, Chuck Salter, Linda Tischler, Will Bourne, Charles Fishman, and Adam Penenberg will continue to produce thought-provoking, ground breaking stories.

Our newest online editorial employee, superstar tech blogger Robert Scoble, [4] will continue to cover Davos and CES and SouthbySouthWest. We’ll even be introducing a full slate of professional video programming (featuring Scoble and Shel Israel, among others) on [5] on March 3.

We are, however, an open forum.

Write an interesting blog post [5] and you’ll find yourself featured on the homepage of alongside Scoble, McGirt and Fishman.

Respond to one of our articles and you may find yourself in an exchange with the author. Or perhaps you’ll add the author to your contact list so you can keep talking about related issues.

Suggest an interesting Fast Talk [5] question for the community to debate and you’ll find not only fellow readers mixing it up but our writers and editors as well.

Contribute a provocative video [5] and tens of thousands of our million monthly visitors might take a look.

Join a group [5] centered around a Fast Company core topic and engage other experts in your field.

Fast Company is about eight core topics: innovation, technology, leadership, management, design, social responsibility, careers, and work/life balance.

When you contribute content to the site, you can tag the content according to one of these topics and add your own free-form tags. We’ll automatically tag certain content, too (if, for instance, you’re responding to something, like an article about technology, that’s been previously tagged).

Will we stray off-topic once in a while? Sure. It’s sometimes too much fun to resist. For the most part, only the content and groups that fit our business-focused mission will bubble up to be featured on the site. That’s part of what our editors will be looking for.

We intend to stay a site centered around business conversation and that makes us unique. Facebook and MySpace already do a good job as general-interest sites. LinkedIn is a site for professionals to manage contacts. We’re different.

Third, we’re not chasing a fad. We’ve been in the business of online community for a decade. Opening up the site to deeply ingrain it with the voices of our millions of online and print readers has been a goal we’ve had since our owner, Joe Mansueto, gave us the means to realize this vision when he took over in 2005.

To make the vision a reality, we have become heavily invested in the Open Source movement. is now one of the most sophisticated websites built on the open-source platform Drupal [6].

We’ve worked with some of the most talented user-interface experts [7] and Drupal [8] developers [9] in the world to build our platform and we’ve staffed up internally to become one of the best Drupal shops in the nation. Our office is now the New York home of the monthly Drupal meet-up.

Open source allows us to take advantage of the work of thousands of developers contributing back their work free-of-charge to the platform. We hope the development work we contribute back will help to improve all sites running on the Drupal platform. We’re committed to supporting OpenID, the movement to allow portability of a member’s own data from one site to another. (When you register [9] at, feel free to import your LinkedIn, Gmail, Yahoo mail, or Outlook contacts. If Facebook opens their “walled garden [10],” we’ll help you import those contacts, too.)

Finally, we don’t intend to be a closed-site. We want to share our model and our technology. We’d like to join with like-minded sites and to share the software we’ve spent a year developing – if they’ll join us in an open network where members can easily find each other and engage in a dialogue.

If you’re interested, just become a member of That’s where you’ll find me [10].

We think our site will help change how traditional media websites think about online community. It’s shouldn’t be bolted-on to the main website as a side show. And it’s not something only pure-play start ups can do well. In fact, media websites can leverage their editorial staff to develop a deeply engaging conversation with and amongst their community. It’s a model the pure plays can’t even compete with.

Community should be at the core of all media sites. From now on, we’ll see that social media doesn’t need to be separate from traditional media. The Media is Social.

Edward Sussman is the president of the Mansueto Digital network of sites, which includes [11], [12], [13], [14] and starting in March, FastCompany.TV [15] and [16].


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