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

[anya_elizabeth]

True, true... maybe a year, and/or a limit to how many you could receive. And a reject gift button, heh. But even at a dollar each it seems that they still generate more money per icon than upgrading an account to get more icons does, if that makes any sense. The price jump from a year's paid to a year's premium paid is $15 or whatever with 125 more icons. If you were to add 125 icon gifts one by one that's quite a lot more money per icon even at a dollar or less each. Ditto free to premium. I don't know if that means they'd pay for themselves, but it does still ensure there is still a sound reason for users to treat the gift system as it is intended and/or upgrade. Assuming they are self-destruct.

And you could still save and re-upload the picture as a non-"free" icon, assuming you have the space, so it's not like the gift really self-destructs per se. I dunno. In fact, I dunno to an impressive degree. It may well be utterly financially and coding-ly impractical. But as far as v-gifts go, I know I personally am far more likely to give someone something I have made/written/scribbled in MSPaint as an e-present, unless I am so unfamiliar with them that I HAVE to give them something generic, in which case I'm not sure why I'd be giving them a gift but hey, you never know.

Although maybe that means I'm just cheap. :p

[denise]

Icons really are the most expensive thing we can offer, though, so anything revolving around icons/giving more icons/etc has to be really worth it for us to do. Icons are the only thing we can offer that don't benefit from an economy of scale -- most things, the more you have, the cheaper you get per-unit, but with icons it's the opposite; every additional icon we let someone have is more expensive, in terms of site load and cost to us.

With the percentage of $1 payments eaten by transaction fees, the remaining leftover revenue isn't really enough to justify allowing more icon space, I'm afraid. We haven't worked out exactly how much each icon costs to offer -- it's certainly only in the realm of pennies, and this proposition wouldn't lose us money, but it wouldn't be as much of a moneymaker as one might think.

[princess]

Because I'm a little unclear on how the internet works...does icons hosted off-site increase bandwidth in the same way icons hosted on site do?

Because I keep poking at this idea of allowing people to purchase an option that allows them to call icons from their own icon space (as I pay a ridiculous amount for a lot of space and bandwidth, and I'm not using it) and wonder if that would be a more practical solution to the "moar ikonz plz" problem.

[cesy]

No, they don't increase bandwidth in the same way, but there are various problems with off-site icons in terms of potential for abuse, among other things - some of them are described at http://community.livejournal.com/suggestions/708712.html

If there are people for whom 200 icons still isn't enough, I'd suggest submitting a suggestion for an extra account level above Premium Paid, as that's the only really workable solution I can see.

[princess]

Fair enough.

Although really, my ultimate solution is "use DW code to host my own site in federation with DW using open ID, and then have all the pics I want".

But I don't know if that nerdtastic option is possible either.

[cesy]

It's possible now, but difficult. There are currently two clones that I know of: http://www.scenejournal.net/ and http://www.deathnote.me/

You may well be better off waiting until the site is out of beta, and there will then be cross-site friends-page reading, and better installation instructions. However, if you want to have a go, do explore the wiki and post in dw_dev with anything you're stuck on or anything you work out that could be useful to other people trying to host their own clones.

[yvi]

Although really, my ultimate solution is "use DW code to host my own site in federation with DW using open ID, and then have all the pics I want".

However, please note that OpenID accounts on DW can only use up to 6 icons. You can't actually use your 500 (or whatever) icons anywhere but your site then.

[princess]

Right, but I can linkthrough the way I do when I crosspost to LJ or whatever, and then people will see the icons when they comment. (See cross-site friends list reading, which is the thing I was actually trying to say.)

[cesy]

So people will see them on your entries, but you can't use them when commenting on other people's entries. So it depends if you want the icons more for posting or commenting.

[princess]

I definitely use my icons 99% for my own posts. I tend to reply to comments through the mail form anyway, because I'm lazy.

(I may or may not be representative of the majority of DW users, and make no claims for anyone else! :) )

This is all also a moot point for now, as I'm fairly happy with my icon allowance!