semi-regular business Q&A session

[mark]

It's been a while since the last one, so denise suggested that we do another Dreamwidth-the-Business Q&A session.

But first, some data. One of the things that we promised when we started this site - and still do! - is that we will be open with the details of how the business is run, how it's doing, where your money is going, etc. Given that, here's the breakdown of our first few months of operations (discounting May):

June: $7,500 income
July: $5,000 income
August (thus far): $2,500 income

This is pretty much what we expected. More people buying accounts towards the beginning of the site, tapering off as we come up towards the various renewal periods. We're comfortable with these numbers and trends so far.

Our current monthly expenses come to about $6,000. This breaks down roughly 50/50 into "server costs" ($3k/month) and "people costs" ($3k/month). We are presently paying a few people as contractors to do time-sensitive and business-critical work for us. (Systems administrators, ToS enforcement, and some development time.)

We are not, currently, paying any salary to Denise or myself. (Which is one thing we really hope to fix...but stay tuned for today's news post.)

Summary:

Dreamwidth is running slightly in the red, but has enough money in the bank to keep the site running for several years at the current run rate. We have a few things in the pipeline which we hope will allow for us to increase the attractiveness of the site to paying customers (features) as well as give us more sources of revenue (credits, virtual gifts, etc).

There will be more data about our next-6-months plan in the upcoming news post. But for now, if you have any particular questions about the business, things you want clarified, or anything, please comment. Denise and I will be happy to answer!

Comments

[chris]

Could we sponsor you (say, I dunno, fifty people converting their paid accounts to premium paid accounts, or some other comparable token contribution from those who have premium paid functionality already) not to implement virtual gifts as a shameless money grubbing venture? There are some shameless money grubbing ventures that can be done classily, like the Paid Account Fairy, and there are some shameless money grubbing ventures that can't be done classily. Virtual gifts, for me, fall firmly into the latter category. (I can vaguely envision, though not specify, a way that they could be done and be meaningful, if they represented something a bit more significant than "Hi! I spent a dollar on something ephemeral" - for instance, if you had to earn them like invite codes, or something. This is not so remunerative for you, though.)

This is a very broad brush and I'd like to be able to justify this plea with a more convincing, factual, coolly objective argument than "it feels lame", and nobody likes lines of arguments in which people accuse sites of turning into (insert other, somehow less fashionable, site name here). My argument really is one of taste and feeling, though, and when part of the joy of Dreamwidth is the high respect we hold for your two senses of taste, virtual gifts would feel like a misstep.

[mark]

So, there's two sides to this. The feature itself and charging for it.

On the feature end, it's actually something that people seem to really want, regardless of whether it costs money or not. When we were doing the original feature polls over a year ago in Denise's LiveJournal account, virtual gifts got ranked as a positive feature in the list.

Charging for it is a separate issue, and I'm not really sure where I stand on that. Fiscally, it's a sound decision: there's very little reason for us not to give people the ability to pay for something if they want it, when that thing doesn't conflict with our stated Principles, Terms, etc.

In this case, virtual gifts are wanted by the userbase (in general, maybe not by some people in particular -- I personally have no use for it!), and charging for them satisfies my goal of keeping usage reasonable and giving people a way to do something fun and support the site at the same time.

FWIW, I agree with you on the somewhat dodgy feeling about charging for them. But without a stronger argument, it's hard for me to justify cutting off that potentially significant source of revenue that doesn't impinge on our Guiding Principles and personal beliefs about how this site should be run.

(As an aside, it's really tough trying to find the line between "if we do X we could make money and maybe be able to afford to pay ourselves a salary" (godyesplease) and "if we do X we will be going too far".)

Thank you for your comment, I'd love any more thoughts you have on the subject!

[foxfirefey]

In addition to the things Mark is saying, one of the items in the vgift spec is to make sure that people can refuse to receive vgifts, (or limit getting them to only people in their circle, or block anonymous ones). I think that helps a little; anybody who thinks they're tacky and doesn't want them can block other people from giving vgifts to them.

[azurelunatic]

One thing that LiveJournal has done is include the ability to send certain vgifts free of charge as a reward for people who have earned certain levels in Support. This has contributed significantly to the Support exchange I outlined below, but even in those exchanges sometimes someone purchases some in addition to using the free ones.

[cleverthylacine]

What's wrong with spending a dollar on something ephemeral? If someone can't (or doesn't want to) buy a tangible present there's nothing wrong with ephemera. Most people are drowning in dead trees, they don't necessarily need greeting cards. IDK, is it really that bad when you consider the amount of money people spend on World of Warcraft or PoupeeGirl? (I am a confirmed, committed and probably committable PoupeeGirl user, I'm no stranger to spending real money on pixel ephemera.)

[helens78]

Providing a counter-POV to the above poster:

Honestly, I rather like virtual gifts, and would be perfectly happy to see them -- as long as they were well-designed and not, you know, "Pepsi Zero!!!" or whatever. Flowers? Chocolate? Wine? Books? Maybe more esoteric things, like yarn swifts or sock blockers. I think they're cute and charming and they don't require a huge outlay of cash all at once, and I'd be thrilled to have them.

[mark]

Yeah, we also want to allow users to make their own and submit them so they can just go up on the site so it's a far more involved process. (And then when we get the credits system in place, every time a gift someone made gets used, they get a portion of the credits... etc etc...)

Thanks for your comment. If you're interested, I did reply to the other commenter too, with more thoughts.

[lady_ganesh]

Yeah, I think a lot of the negativity around v-gifts is in part a negative reaction to Pepsi Max.

[cesy]

Thank you for explaining all this stuff!

[jeshyr]

And yes, what cesy said too. I find the level of transparency here to be a breath of fresh air and VERY wonderful and generally something I think is utterly brilliant. Congrats :)

r

[kasuchi]

I actually like vgifts - receiving balloons or a cake on my birthday is very sweet and a nice way of knowing that someone is thinking of me - but it bothers me when some of the more generic ones aren't free. I think maybe there should be one or two "free" vgifts - like the price is one unused invite code or something like that. And these should be very simple, direct things - a simply-designed image of a gift for a happy birthday, or perhaps a single balloon. I would like to share the love with my friends, but I honestly can't always just charge vgifts to my credit card.

Still, in general, I do like vgifts, and unlike a commenter above, I don't see them as a "shameless moneygrubbing scheme" - I see them as a way of letting someone know in a small way that you're thinking of them, and I think gestures like that are important to community-building.

[denise]

I totally wouldn't be at all opposed to having one plain vgift that people could send X per month of, or even giving people credits to send X free vgifts out of all of them per month, but X would have to be a really small number. It's amazing, but vgift revenue is actually a significant revenue stream on a site like this!

One of the things we want to do to fix the problem of not wanting to charge a bunch of micro-purchases is create a gift certificate system that isn't like "you get a GC with a fixed value and you can only use it on one purchase"; we want to create a points system, where one DW point = $.01 USD, and let people buy points in blocks of like $5, $10, $20, etc. Then they can spend their points on vgifts whenever they want and keep the rest saved for when they want to use them, as well as transfering a few points back and forth to friends, "tipping" a favorite author in DW points, etc, etc.

We have to think about it carefully, though. We don't necessarily want to set up a whole second economy, just make it easier for micropurchases (since anything below $3 and the PayPal fees are pretty ludicrous -- on a $1 purchase we'd probably get about half that after fees).

[blnchflr]

Just before account prices go up, I expect you'll get a lot of business (I know I plan to renew my account then), but I'm sure you've taken that into consideration.

Vgifts: Thanks to LJ, I have very negative knee-jerk reactions to the concept (urgh), but it doesn't mean I can rationally justify being against the feature being available to other users :o)

[zooey_glass]

I'd like to see DW introduce v-gifts, personally. I was fairly uninterested when LJ first introduced them, but actually I found I liked them. Sometimes I just want to make a little gesture to someone without spending a lot of money, and they fit the bill really well. I don't think I'd want to see all v-gifts have a charitable donation - for me part of the point of buying them is that I'm supporting DW. (Not a charity, but a business I want to see succeed! I stopped buying them on LJ at a point when I had serious issues with their business model.)

I'd like the idea of being able / encouraged to buy a block of credit (I suppose technically on LJ I could have bought myself a gift voucher for this, but the thoguht never occurred.) I also think having one or two generic free ones would be nice, for people who can't pay or don't want to.

I'd be in support of being able to buy people other things in small finanical increments, if you had good ideas. I was thinking at first of icon slots in ones, but I recall you saying that extra icons aren't really financially viable for the site. So - actually, there's probably nothing else that doesn't already exist, but leaving the thought anyway on the offchance.

[helens78]

I second all of this. :)

* Charitable icons: I'd like this as a subset, but not all v-gifts. The point for me would be supporting DW; I can support other places with my money separately.

* Blocks of DW points = WIN. That sounds great. I'm actually not at all likely to charge $1 on my credit card, partly because I know how the fees are and because it seems like nickel and diming myself to death -- I've had to really train myself not to spend $1 here, $1 there, and ending up with nothing at the end of the month. But I can budget for $20, it doesn't get eaten up with fees, and then I have a bunch of points to share. Sounds like all-around good.

* Being able to buy things in small financial increments sounds great, and I too wish I had better ideas of what to suggest here.

[manna]

Personally, I don't like v-gifts, and I have them turned off on LJ, but I think they're probably the least-obnoxious of all the revenue-raising ideas LJ came up with, and if lots of people want them, then you should go for it.

For other revenue-raising ideas, I think you should have profile dragons. $1 buys you an egg, which hatches after a month. For every month that you keep paying your $1 in dragon-feed and maintenance, the dragon grows a bit bigger, and starts doing interesting stuff, until it's...I don't know...breathing fire while doing back-flips and tap dancing. If there's a break in the payment, then the dragon flies off. Maybe you'll be able to catch a glimpse of it on other people's profile pages, where it will settle for a day then move on -- it starts by migrating to somewhere on your flist -- and maybe it will stop by for a visit, but it won't come back permanently until you start coughing up the $1 a month again to feed it.

Damn. I totally wasn't serious when I started that, and now I really want a tap-dancing dragon.

[cleverthylacine]

You know, aside from ads and obnoxious userpics, one of the #1 things I use Adblock for is ignoring people's dragon eggs that they post all over LJ... ;-)

[cleverthylacine]

My primary concern about V-gifts is that they can be used to harass people because they display on the profile page and LJ would not allow you to block non-trusted users or anonymous users from sending them to you. (I got a lot of flack from LJ about suggesting this including the very unpleasant and patronising suggestion that no-one should be allowed to turn off anon v-gifting because "what about Valentine's Day? How can you say you don't want anonymous presents on Valentine's Day?" Totally ignoring the fact that Valentine's Day may be a holiday for secret admirers but is also a holiday frequently observed by crazy stalkers, abusive exes and other flavours of the fatally attracted.)

If V-gifts are implemented here on DW, I would really like to have the same options for blocking as with PMs: block anon, block non-trusted, block non-mutually-trusted. I actually like V-gifts generally, but couldn't receive them on LJ because I had no way of blocking my troll and my crazy ex, and sure, you can remove them, but you still have to look at them first, not to mention they are on your profile until you remove them, which means everyone who saw my profile before I got the notice has seen them.

[owl]

I would be another voice in support of v-gifts (implemented in a sensible way). I disliked the concept very much on LJ -- I left news a Pepsi with a snarky message -- but once I started with Support I was converted over to them.

I'd be very happy to throw a few v-gifts around to support DW. I don't exactly like the sound of 'slightly in the red', but if you're not worried, I'm not worried. :)

[afuna]

Note that that's with the money from the seed account sale, which is exactly why the sale was held -- to have capital to fall back on for the first year or so, especially, while Dreamwidth is ramping up to launch *g*

[ai]

One of the major requests I always see on LiveJournal are for more user icons. I've seen some terrible ideas be put in place on other clone sites for increased user icons. I do believe this has been argued before though, so I don't know why I bring it up, other than it's the most common thing I see people paying for. The other thing are rename tokens and earlier accounts.

Virtual gifts are nice but a lot of people view them in the same way they view ads, especially when they are browsing other user pages. Will there be an option to not only hide them on your profile, but to automatically hide them on other user's profiles? If so, wouldn't that conflict with the users who want them to show?

I just checked out the shop and wanted to say how fancy it was that there were options to buy for random free users. I know what I am going to do when I get a job.

Hm, another thing I can think of is offering specific layout styles to users who pay for them. Make them a limited amount (or limited time). Only problem with that is they generally are easy to mimic, so perhaps that's a bad idea. And here I thought paying for a cute layout would be a great idea *g*

[celestinenox]

Just wanting to throw in my two cents and agree with the people who are saying "No crappy Pepsi vgifts!!!"

DW vgifts should be as different from LJ's as possible, unique to DW.

[ranunculus]

I think it is extremely reasonable to want to be paid for your time. Further I believe that a lot of us who use the site do support paying for it. What about free v-gifts for permanent and premium accounts and everyone else has to pay a nominal sum for them? Says a person who has never, on any site, sent one.

Love the changes you are making, and am eagerly looking forward to the photo upgrades!

[ashcomp]

I have to admit that v-gifts have always struck me as a little silly--but if they're so popular, who am I to complain? My own thought is that you might have a selection of *real* gifts people could give through Amazon with a click-through, allowing you to rake a little off the top.

Privacy concerns here would have to be left to your creative wizardry, but it seems as though there ought to be *some* way to make it work.

[anya_elizabeth]

*drive-by commenting*

One of the comments here about icon allowances being the thing people pay for most made me think... what if the v-gifts were icons? I have no idea whether such a thing is possible, but I quite like the idea of seeing/making an icon that I know someone would really love, then being able to upload it and gift it to them so that they can use it without it taking up a slot in their allowed icons. That way you can give an icon as a gift even if the recipient is using all their available icon space. It's more personal and I know I'd pay for it. :)

[pne]

It would probably have to "self-destruct", though (i.e. you can only use it for two weeks, or four weeks, or two months, or whatever makes financial sense) -- otherwise people could give each other huge icon allowances for a one-time cost, while the bandwidth cost for Dreamwidth is emphatically not a one-time one.

[birguslatro]

As you're planning "photo/audio/video hosting", why not extend the hosting concept a little bit more and allow users domain-names as well? (For a price, of course.) Lots of artists and the like use social networks because of their ease of use for posting pictures of their art and getting feedback, but then they also want (or eventually do) a gallery with their own domain-name. DW will be providing most of what they want, (a gallery and a blog), so why not give them all they want?

[mark]

I believe there's a bug open for this. We absolutely want to support it! :)

[pauamma]

If you implement vgifts:
- Please, no anonymous vgifts. (Or at the very least, make it possible to refuse anonymous vgifts, and don't allow banned(*) users to evade banning by making their vgifts anonymous.)
- Allow recipients to specify a rate limit (overall or per user).

[kareila]

We are implementing vgifts. It's bug 215 and I'm designing the system.

The way I'm planning to handle this is to require the recipient to accept/refuse each separate gift. Accepted gifts are displayed on the user's profile for a few weeks, and refused gifts get dropped from the system.

There will also be many levels of control to choose from when deciding who can send you vgifts: anyone including anonymous, registered users, circle, access, specific trust group and none.

Banned users will not be able to send vgifts as that is a purchase and all purchases already have ban checks in place.

I had not planned on supporting rate limiting. If you get a bunch of unwanted vgifts, you can refuse them and reset your vgift permissions to not allow similar future gifts.

Prehaps beinga ble to transfer?

[asacute.livejournal.com]

pehaps set upa function though [people using openid can cinvert there acount to a 'real' one? also if you do macking them able to pick a user name would be nice

Re: Prehaps beinga ble to transfer?

[azurelunatic]

There's a plan to have people able to link their OpenID account to a real account, and claim all the comments they've made with the OpenID account.

When do people most frequently pay for Paid Accounts?

[chris]

Partly with reference to this suggestion, but partly as standalone questions:

1) Do you see spikes in Paid Account sign-ups (or, I suppose, resubscriptions) relatively soon after each new post to dw_news?

2) Does it make a difference in generating Paid Account sign-ups whether you appeal for people to sign up for Paid Accounts in dw_news posts or not?

3) Do you see most activity at the same time of the month that you first permitted people to start paying for their accounts, on the grounds that a large chunk of your Paid Accounts started paying at the very start and so will expire at the same time of the month in whichever month they expire?

Re: When do people most frequently pay for Paid Accounts?

[denise]

Just wanted to let you know that we're not ignoring this question -- we just haven't yet put together the tools necessary to do analysis this closely!

[chris]

It's now been five months since the last semi-regular business Q&A. Keeping calendrical, can we expect one next month? (I know some people are busy with going to NZ and the like this month.)

[mark]

The idea is to do them when people call for them, or when we remember them. Now that you've asked for it, I'll poke Denise to put it on the agenda so we get to it.

But yes, as with NZ this month, I wouldn't expect it in the next two weeks. :)

Thank you!