Agile Business on the Web (long)

[Mr. Now]

Let’s say I offer you a 1 in 10 chance to make 20 times your investment within 18 months, or lose it all. How many times are you making that bet? What is your EV?

Empirical processes are being driven by the peer-to-peer nature and influence of the internet. Collaboration, total visibility of process, iterative inspection and rapid adaptation are elements of the new model for working, playing, existing. It is hugely entreprenuerial, and this huge trend has immediate application in business. The new model for doing business borrows from advances in software project management, specifically Agile practices such as Scrum and eXtreme programming. The results are very impressive. The entire focus of Agile methods are on results, and nothing less. Process serves to manifest intentional results. Process is not an end in itself. All Agile process are lightweight and fast.

I’m interested in developing web sites that generate tremendous anounts of cash. It is being done today, right now. I am looking for 100 players that want to take a shot, or series of shots, 300 bucks at a time, with the ability to pull the plug if you do not like the results after 25% of the money is sunk into development of the site(s).

It’s called Agile project management. The idea is to use this, and modify it a little bit. If you go out on the web and learn about Scrum, you learn that there are 3 players: the Project Owner, the ScrumMaster, and the software development Team. What I am proposing is using a limited partnership structure to gather 100 limited (but not silent) partners. These collectively are the Project Owner. I am the ScrumMaster and I select the Team. The intent is to create web sites that generate $600K a year minimum, and pay that out to the partners less operating expenses each year. Web site expenses are very low after development costs are sunk. A winning web site is a huge cash cow.




The revenues come from from the web- Google cash from AdWords, payment for 1-way links, and other forms of web revenue. I am not talking soft dollars here. I’m taking cash. There are many sites out there earning $600, $700, $800K a year from web medium advertising—AdWords, selling links, and so on. If you have huge traffic, your Adwords click-throughs can generate huge amounts of cash. Your high PageRank (Google) gives you the ability to sell 1-way outbound links for $40, $80, even $200 a month. (see www.text-link-ads.com.) Other sites want your link when you have elite-level Google PageRank.






The people with no imagination are not reading this any longer. So now I name a site that is generating this kind of cash: www.plentyoffish.com. Go there and ask yourself if you might like to have 1/100th of that.




I could do this myself, and shell out 10 to 20 grand a throw on varios “maybees”. The web site may be the best idea, it may not. The web site may be successful, it may not. The timing for the web site idea may be good—the timing may be bad.

This whole thing lends itself to an empirical, interative, highly adaptive entreprenuerial model of project management and enterprise.

The whole idea is much much better when others get involved. Risk disappears as it is spread across many partners. But MORE IMPORTANT, the best ideas bubble up from 100 highly engaged and committed players. This makes the odds for success MUCH higher than thinking in isolation.

My concept is simple: get 100 people to risk $300 each and raise $30000 to develop 1 or 2 web sites with the intention of generating at least $600K per website per year net of all expenses. The way to generate these ideas is simple: make sure the 100 investors are engaged, and use a collaborative process to generate the 2 or 3 final web site ideas.

Now the risk is widely diversified over 100 players, and each player is bringing his skills, insight, expertise and engagement in the process-- to the task of idea generation and final selection.

Once the 100 players are in, I go to work creating the site. I marshall the team leadership from people I know personally and have history with. I run the whole business/software development project as the Scrum Master . It’s a software project that is actually a business development project. The 100 partners (collectively) are the Project Owners. The sites are developed in interations of 2 to 4 weeks. After the interation (the “Sprint”) is complete, there are results that are potentially shippable. By this I mean, debugged, tested, and ready to go. Definitely NOT all the features, but functional and working. All the partners get to see it, try it, test it. They do after all OWN it. After the first Sprint, the Product Owner inspect its, and decides go-nogo. This is done during the Sprint Review.

Product Owner likes it? OK. We define the next Sprint and the process repeats. If Product Owners do not like the results, they pull the plug and the game is over. I put rules in the LP agreement for structuring that plug-pulling process. (quorum)

What I am describing here is the Scrum process of developing software. Here the business is software, so this is Scrum applied to business development.

I add the innovation of having an LP with 100 partners who are collectively the Product Owner.

All of the collaboration is done using the web—private message board, FAQ, Wiki, etc. Everything is web-based. There is some overhead on the 1st project to set this up. Thereafter the infrastructure is there and we just use it on subsequent projects. A lot of that can be built using cheap offshore labor, open source etc.

Assuming 30K is raised, all the money goes to project management and software development. But remember we are using state of the art Agile methods focused on intentional results. You are to see results in 1 month and you can pull the plug (quorum based voting, per the LP document.)

The money is well spent. I am a Certified ScrumMaster, a developer and a SEO expert with 22 years in software and project management-- and I need to be paid for my time. So yes this creates a job for Mr. Now.

The lead developer (who will select the Team) is a hard-core alpha-geek who works for $80 per hour and is worth every penny. And then some. He will do the object-oriented architecture, code reviews, manage unit and integration testing, and do the daily build. He will also cut A LOT of code and manage the off-site (offshore) programming labor. Any site developed is in ASP.NET using C# as the code behind. The site must be hosted on hosting service providers that Mr. Now selects.

If you are not risk-averse and want to take a shot here, and participate in an innovative business/web project in tune with the zeitgeist, send an email to now_meister@yahoo.com with “AGILE BUSINESS” in the header and/or message body. If I get 200 emails, then I form the LP, I put up a website that lays out my resume, the resume of the key players, etc. and you commit your cash. After the cash, I put up a membership site where partners can communicate at each stage in the process, vote, etc. This is the main control panel for collaboration before and after deciding the focus of the site(s).

If I get less than the required 200 emails to now_meister@yahoo.com, then this show is over and this is NOT happening. I need to see the 200 emails by Nov 1st.

Please do not PM me on 2+2 as I want to keep all communication in one place.

Lastly, if you are not willing to learn about Agile methods and actively engage, don’t respond. You must commit to engagement in the process and it is required in writing as a condition of participation.

The LP structure requires “silent” partners and 1 general partner that makes decisions. I plan to use a lawyer to structure the LP such that we get around that creatively.

This idea brings together +EV players, the web, and the state of the art in business and software development using empirical practices. Think hard about that 300 bucks. Come on guys. Click these links, think about it. 300 bucks is nothing. Look at what www.youtube.com has done. I mean come on, let get going here. Can 100 2+2 guys define and deploy the next killer cash cow on the web? YES.



Links:

www.agilealliance.org
www.agilemanifesto.org
http://www.controlchaos.com/old-site/debate.htm


Books:
Agile Software Development with Scrum
http://www.amazon.com/Agile-Software-Dev...TF8&s=books

Agile Estimating and Planning
http://www.amazon.com/Agile-Estimating-P...TF8&s=books

Free web Site that generates 100K a month:
www.plentyoffish.com

Blog, of originator of "PlentyofFish"

[ QUOTE ]

Youtube is already wildly profitable.
August 24th, 2006 by Markus

Youtube has been running adsense on nearly every single page of its site for a while now. I was able to do a test campaign that ran on Youtube and was displayed at the rate of 500,000 pageviews an hour for the average price of 30 cents a cpm.

This article says youtubes pageviews are around 250 million a day. If that is even remotely accurate youtube is making a LOT of money. Lets say only 200 million pageviews a day can have ads. That gives you $300/million * 200 = $60,000/day or $1.8 million a month in revenues from adsense.

I guess everyone at youtube wants the world to think they aren’t making any money so that all the people whose content they are stealing won’t come asking for money.



[/ QUOTE ]

www.text-link-ads.com (type www.plentyoffish.com into the web page to see what a link out is worth)

[MrBlue]

I've been following Markus's blog ever since the pic of the 900k check was posted on 2+2. This guy isn't just another random guy that struck it big (not huge, but decently big). His work with prime numbers was cited in the Fields Medal/Nobel prize in math.

There are a lot of sites out there making quite a bit of money off ad revenue.

Markus summarizes the article to:

[ QUOTE ]

Techcrunch, $60,000 in monthly ad revenue, $50,000 profit from party last weekend.
Boingboing $1 million/year
paidcontent $1 million/year 5 million page views/month
fark $600-800k/month 40 million pageviews/month


[/ QUOTE ]

I should also note that Fark generates additional revenue from the $5 / month subscription fee for premium users.

Digg is reportedly generating 3 mil a year in revenue but has NOT broken even. Rose could be lying though, who knows. Still, not bad for a site that's only been up for about 2 years and was developed using $12/hr programmer.

Interesting idea. I'm going to sleep on it.

[sillyarms]

This idea sounds good. I am interested. If you mean what you say I will come in. As a natural skeptic I do have a few questions…..

[ QUOTE ]
It’s called Agile project management. The idea is to use this, and modify it a little bit. If you go out on the web and learn about Scrum, you learn that there are 3 players: the Project Owner, the ScrumMaster, and the software development Team. What I am proposing is using a limited partnership structure to gather 100 limited (but not silent) partners. These collectively are the Project Owner. I am the ScrumMaster and I select the Team.

[/ QUOTE ]

What % of the company do these 100 Silent Partners own?

As owners would we have the ability to select a new ScrumMaster if we feel you are not doing your job?


[ QUOTE ]
Product Owner likes it? OK. We define the next Sprint and the process repeats. If Product Owners do not like the results, they pull the plug and the game is over. I put rules in the LP agreement for structuring that plug-pulling process. (quorum)

[/ QUOTE ]
[ QUOTE ]
You are to see results in 1 month and you can pull the plug (quorum based voting, per the LP document.)

[/ QUOTE ]

When will I be able to see this document?

[ QUOTE ]
The money is well spent. I am a Certified ScrumMaster, a developer and a SEO expert with 22 years in software and project management-- and I need to be paid for my time. So yes this creates a job for Mr. Now.

[/ QUOTE ]

How much does Mr. Now get paid for his time?

How much of your own money will be in the LP?

Will you receive any additional equity for your role as ScrumMaster/Founder?


[ QUOTE ]
The lead developer (who will select the Team) is a hard-core alpha-geek who works for $80 per hour and is worth every penny. And then some. He will do the object-oriented architecture, code reviews, manage unit and integration testing, and do the daily build. He will also cut A LOT of code and manage the off-site (offshore) programming labor. Any site developed is in ASP.NET using C# as the code behind. The site must be hosted on hosting service providers that Mr. Now selects.

[/ QUOTE ]

Will the Lead developer receive any additional equity beyond the $80 per hour?

[ QUOTE ]
The LP structure requires “silent” partners and 1 general partner that makes decisions. I plan to use a lawyer to structure the LP such that we get around that creatively.

[/ QUOTE ]

Details needed to make adequate analysis.

[poker-penguin]

Sounds like it could be interesting.

I'm wondering why mr Now picked 100 people - that is a lot of people to expect active involvement from and my worry would be that it makes the ownership team too unwieldy.

Hopefully he gets all the emails he wants, I'd be interested to see more.

[avfletch]

$30,000 doesn't seem like sufficient funding for this venture, especially if you are paying your alpha-geek $80 an hour.

How many hours a week would you expect him to be working?

If he works full time on this project at $80 an hour then he'll receive $12,800 in the first four weeks (or nearly half the funding). You need to pay the rest of the team and yourself out of the remaining money and I believe the idea is that only 25% of the investment is sunk within that first month.

Am I missing something here?

Fletch

[John21]

Seems like a sound idea, as long as you have a good plan for getting 3+ million visits per month.

[Mr. Now]

The piece you are missing is found in the book THE ORIGIN AND EVOLUTION OF NEW BUSINESSES by Amar Bhide.

The essence is taking shots at low cost, low probability, but potentially very high payoff bets.

Because of the nature of these small bets, an empirical iterative process (rather than a defined process) works best. Bhide discusses this in detail in his book, but from the other end-- he shows how corporations invest more, and have more to lose, and do not use empirical methods. Instead they use defined methods aimed at predictability.

Entreprenuers take shots in areas of rapid growth. Online dating was growing 100% a year when www.plentyoffish.com came in with the innovative freeby. The model is: spend minimal time and money predicting, and maximum time getting something out there, in a growth market or zone of activity and interest, inspecting and adapting quickly over several iterations.

30 to 50K is enough to get something "good enough" and get it out there. Amazon, Ebay, Google, YouTube, MySpace, PlentyofFish, ICQ, these are all examples of empirical winners.

Collaborate. Get it out there. Inspect, adapt, iterate.

[CrayZee]

So you're basing a business model simply on the development methodology and a random sample of +EV poker players (that might not know anything about software)?

Agile methods are best for small team groups and implies flexibility. "100 non-silent partners" doesn't seem to fit the bill unless most people are saying and doing nothing and a few are actually doing the real work. It's probably better to get a small team and go from there in a bootstrapped form.. but it looks like you are looking for a job via 2+2 and guaranteeing a profit from the initial investors. +EV however the coin lands. [img]/images/graemlins/smile.gif[/img]

Don't forget about innovation, competition (which can be fierce in a low barrier of entry market), marketing, making something that people actually want, etc.

It's funny how things in software seem to be the vogue in cycles. One day it's Java and automatic garbage collection, then it's eXtreme programming, then it's Ruby on Rails... Not to say that agile methods are bad, it's def. another good tool in the toolbucket. Even in the rational world of programmers, fashionesque things can take hold.

[Dazarath]

Mr. Now, it seems weird to me that someone like you would post about gathering 100 people with 300 dollars each. Considering how much some people on this forum make, 30k is a pretty piddly amount of money to need that many other "partners" to help you out with. If I had an idea that I thought had a good chance at becoming the next big "hit", I'd put 30k of my own into it, and my bankroll isn't even that big.

Maybe I'm misunderstanding the point, and the money is not the point of getting together a large group. But what is, then? The trouble I see, is getting a good idea in the first place. After that, getting together the money, and the people to work on it, shouldn't be as difficult, especially if the project will only require 30k.

[Colt McCoy]

I agree with you on one thing, the idea of taking many small-investment, high-payoff shots is good on the Internet. I think the rest of is a somewhat interesting, but needs a lot of work, particularly the way you're structuring the partnertship. Also, I'd try rewriting this without so many paradigm-shifting, out-of-the-box-thinking phrases. This was absolutely painful to read.

Also, if you're going to use youtube as an example, try looking at their burn rate. They're losing money fast and don't really have a business model that will ever make money short of finding someone to buy it.