Our tell-a-friend service was growing nicely, but the model had some weaknesses.
A few hundred webmasters worked with us, but only the top few had really significant traffic. A Zipf distribution is typical of internet traffic, but it meant that our biggest client was far larger than anyone else.
In fact, the top site represented 60% of our traffic, which gave it a lot of influence over payouts and payment terms. (Many offline companies face this problem if they distribute through Walmart.)
In this case the site owner's name was Joe, and lucky for us Joe was pretty cool about it. We later found out Joe was 16 years old.
This issue would create problems for us though throughout the lifetime of the business, whenever one customer was a large part of our volume.
It was a painful lesson but it gave us a clear picture of what we wanted; a business with many small customers.
We decided to diversify the business, and looked around for what to do next.
We chose online dating as an industry that was high-tech but out of touch.
Most dating services used simple matching algorithms which didn't allow for the subtleties we take for granted in the real world. For example, they gave equal weight to the colour of someone's hair and whether or not they were a smoker. It just didn't add up.
That design decision made it easy to program at the expense of the users. We wanted to build something smarter, a technology that could be useful in multiple contexts; it could help you find a new roommate, study partner or motorcycle buddy.
If you went to Google to find good sites, you'd come to us to find good people.
To build this new service while maintaining our tell-a-friend program, we needed to hire more people. As we grew, we were crossing over an invisible line between tiny startup and small company.
There were benefits to growing, but some new challenges as well. We were able to offer RRSPs (retirement savings accounts) with contribution matching, Employee Assistance Plans and a generous benefits package.
In July 2003 we were invited to a small conference, but it was across the country in Minnesota. Many of our advertising clients would be there but we couldn't afford to fly.
We found a car rental that didn't charge for miles, and four of us set off across the country. We took shifts driving and sleeping, stopping only to eat, change drivers or pee. (ahem... Dylan)
We met some great people there, and learned a thing or two about road trips along the way as well.
- Canvas roof bags are no good for serious road trips. After bombarding them with insects the wind will slowly rip them apart.
- There is nothing quite like waking up at 4AM to the thunder of a car driving fast over rumble strips; those bumpy lines along the side of the road who's sole purpose is to indicate that the driver has most likely fallen asleep, and wouldn't it be great if he woke up real soon now. (ahem... Aaron).
As the company grew the noise level in the office was rising fast, making it harder to concentrate. The lounge had long ago been turned into a meeting room and people were working in the hallways. For our annual ski trip we needed two hotel rooms, and we couldn't just head over to John's Place for lunch anytime we felt like it.
Something had to give.