Whence Wondermill?

In 1994, when he should have been attending class, Aaron spent his days in the University of Victoria library learning HTML and making websites.  It was the early days of the web. Sites were text-only, and the browser of choice was NCSA Mosaic, which would soon change it's name to Netscape. 

Things got started with humour newsletters and websites, with server costs covered with advertising.  Income climbed very slowly, and in 1998 Aaron quit his day job and started Wondermill on credit cards, losing about $400 monthly.

In 1999 Shannon and Noam signed on to help with programming and writing, and off we went.

We didn't have any systems in place at the beginning.  When it came time to get paid, instead of cashing a paycheque Shannon found herself outside an ATM, holding out her hands while Aaron apologetically counted out twenty-dollar bills.

Our debt was growing, but the business model seemed to have potential if it could scale up, and so we kept going. At our lowest point we had $27,000 on Aaron's credit cards before things turned around.

At this point we were still camped out in Aaron's living room to save money. It was crowded but it worked out fine.

We had two nice chairs and one junk chair.  This led to an ongoing game of musical chairs, wherein the first person to cave in and get up to get their lunch would sit in the crappy chair for the rest of the day. You could eat, or you could have a nice chair, but rarely both.

We were working hard and having a good time, but life was about to get a lot harder.

When the stock market crashed in April 2000 we weren't immediately affected because it took time for the big drop in advertising dollars to trickle down to the little companies like us. We needed to diversify the business, something which would be an ongoing challenge for years to come.

Our revenues dropped but server costs remained the same, meaning we lost money every time we sent out a newsletter. Our previous success and size was now working against us, and ultimately we had to abandon the model. At the time our readership had grown to more than 250,000 subscribers.

We had to figure out a way to survive in this new cash-strapped environment. Because we'd been careful with our costs there wasn't much to cut there, so the answer had to be finding a new source of revenues, and we didn't have much time left.

While reading an online discussion forum we saw a scanned-in earnings cheque that someone had posted. It was for $5,000 from a company called Mailbits. They had created a simple form that webmasters could put on their sites, that allowed visitors to tell friends about those sites, much like you see today all over the web.

Mailbits paid webmasters an incredible $0.25 every time someone submitted their form. They could pay so handsomely because anyone submitting the form was subjected to page upon page of aggressive advertising and bombarded with popups.

It seemed there was a need for another player in this niche, paying less than Mailbits but with a gentler experience for website visitors.

We rolled out our own version in June 2000, two months after the market crashed. The service grew slowly and surely, eventually needing multiple web servers so that if one went down we could still keep the service up.

As we thought carefully about the company we were building. "What's most important to us?"  What's the experience we're looking for in building a business?

We liked being independent and were willing to sacrifice the higher income that came with contract work for other companies for the freedom of being able to build whatever we wanted and be our own bosses.

Of course that's easy to say, the hard part is earning enough money to keep the lights on.  We figured if it all went downhill, we'd pick ourselves up and walk away smarter for next time.

Life's more interesting when you play by your own rules.