I *very* much agree that the site needs to be bloggier. The ad revenue is supposed to mostly come from the associated blogs, not the portal, with the portal's role being to boost traffic to the blogs, give people an easy starting point, and provide some original reporting, etc., that will encourage people to go there and encourage bloggers to do more original reporting.I thought: Wow, that's about the smartest, clearest thing I've read here yet. Who said that? Then I see, it was Glenn Reynolds. Okay. Well, see? That was a blind reading test.
That means that the portal needs to be interesting, and to change a lot. Right now it's neither.
A few posts down Cal lays down the harshest critique I've seen yet:
See, here's what I don't understand: why are these discussions even necessary? Why is Glenn saying (to paraphrase) "hey, great idea, I'm passing this on to the others!"?Almost
What was Glenn doing for the past 8 months or so, exactly, as part of the editorial board? More to the point, what was anyone involved with this absurd enterprise doing all this time?
This isn't a bootstrap organization. It's not something that was cobbled together and thrown open to the public for feedback. This was a venture with 3.5 MILLION dollars in funding.
Where did that money go? Apparently, it was all spent on a blowout opening bash. It clearly hasn't gone to technicians who could quickly respond to the most basic requests for change. Nor has it gone to any more advanced development work--at least none that's readily apparent. Just as obviously, it wasn't spent on competent legal or marketing advice.
When the only evident sign of investment is in the party you throw to announce an organization with an illegal name offering a service that no one understands and that you yourself aren't entirely able to define, you've got a real problem.
So here's a suggestion for PJM/OSM board members and executives alike: Stop asking people what you should do. You convinced a number of fools to invest 3.5 million--or should I say MILLION--dollars in you. They thought you knew what to do. If you don't know what to do, then accept the harsh truth that your only real ability is lies in convincing fools to give you money. Use some of that money to hire people who actually know what to do, then use some more money to hire people who can actually do it. Then get the hell out of their way.
IN THE COMMENTS: It's noted that Glenn Reynolds has now responded to Cal, but only minimally, to distance himself from what has gone on there. Per Glenn:
"The Editorial Advisory Board met for the first time the day after the launch. I'm guessing that the site design, etc., was seen by someone as a business decision, rather than editorial, but they didn't involve us. As for the rest, well, perhaps you should just watch the site evolve and see how it does."
I express sympathy.
Steve H. drops by to tell us about this post of his:
I learned something really funny about Pajamas Media yesterday. A source claiming to have inside information says they've actually raised SEVEN million in venture capital. Again, I have to ask, where did it go?
UPDATE: Moxie and Jay Currie have some thoughts on all this.
Posts
58 comments:
Commenters: Make substantive points. The usual accustions and name-calling will be promptly deleted. Do not dredge up material from old conversations here. Respond to the material in this post and avoid repetition.
Actually, it's 15 hours later, since Cal's post was made just after midnight.
I think it's difficult to interpret silence. It's Sunday, after all. Maybe everyone is caught up with football and/or shopping, and just wants to take a break from all this. On the other hand, maybe everyone realizes that Cal is right and doesn't know how to respond to his comments.
The problem with that dicussion board, it seems to me, is that they can discuss strategies all they want but they have no power to implement them. Or do they? It's not clear to me. But if it's true, I think that fact could also be contributing to the silence over there.
Joan: The Pajama people know about that message board, obviously. Glenn posted on it. They should be concerned about monitoring it. When I think of how closely I've been monitored and quickly responded to for saying much milder things about Pajamas, I'm simply amazed at the silence. Another contextualizing factor for interpreting the silence, to counter your observation that it is Sunday, is that a whole group of the Pajama people did a "blogjam" about their problems in the afternoon on Thanksgiving. I think it's damned strange!
Playah: I think I've read most of the posts over there. Glenn's and Cal's stood out. But I'm not going to keep up a running commentary on the PJM discussion boards. I'm sure if I did, you'd call me obsessive!
I described the whole OSM/PJM venture as a train wreck over on my blog. That a collection of such thoughtful, intelligent people could fail at so basic a level as being incapable of articulating what OSM/PJM is supposed to be about is unbelievable!
Mark Daniels
Since they have invested so much, I wonder where the oversight from the investors was. Aren't they the ones who are supposed to keep the developers in line? I mean, a party is nice and all, but my first thought is that is not the kind of thing you would spend on to attract the potential audience of bloggers and blog readers, but more to get the attention of the MSM, which is just a big exploding irony bomb!
So, who, among the investors, was around to say "no" to this idea? No one it seems.
Cal seems to be saying, "Shut up and hire professionals". I am sure they have thought of that, or do we just assume they are stupid now?
My guess is that little of the $3.5 million has been spent, and they are trying to settle, exactly, what sort of additional technical help might be needed on an ongoing basis, and at what cost. Maybe even a basic disagreement as to whether to pay "in house" people (Charles?) or outside people to really get it done.
Ultimately, the VC's have the say in allocating that money and there must be some tussle going on where someone is not getting the vision thing, or agreeing with the vision. I doubt VC's today (in 2005) would hand over that type of money without having a purse keeper involved with veto authority.
The idea can clearly work so long as that portal page has some of things I suggested on another post, and what some have suggested on that discussion board (original reporting, automated updating of house blogger posts, etc).
Maybe Pajamas Media should write Dear Abby.
Seems to me that the worst aspect of all this is that anyone thinking about investing money in blogs or the internet in general can now point to a high-profile failure, and put their money safer. If PJM had succeeded, they would have opened the door for real money coming into blogs, good thing or not. The problem is, if they fail, they may well lock the doors.
The thing that worries me the most is, given the hash that PJM/OSM have made of this, what happens the next time someone (on 'either side') has a good idea which requires VC funding?
Those people could be the most competent people in the world, and if PJM/OSM has continued on its track towards crashing and burning, then these fumble-fingered fools may have ruined it for all of us.
Former FEMA Director Michael Brown has started a disaster consulting firm. Maybe he can help Pajamas Media.
To Auguste: About 90 percent of new businesses die within three years. Even the best baseball players in the world only hit about three out of ten.
Glenn's response was minimal, but revealing, distancing himself from the actual decisions involved in the project: "The Editorial Advisory Board met for the first time the day after the launch. I'm guessing that the site design, etc., was seen by someone as a business decision, rather than editorial, but they didn't involve us. As for the rest, well, perhaps you should just watch the site evolve and see how it does."
FXKim: The phrase you couldn't follow indicates that I read the post and appreciated it before I noticed that it was Glenn's. So that was an example of a blind reading test, like a blind taste test. It means he writes well. Yes, that was written in stream of consciousness style. It would help to imagine it spoken.
Janet: Yes, you read the line correctly. I think you may be right that Glenn responded as a result of this post. I feel sorry for him, because he's yoked to an incredibly embarrassing project, and I believe he was mainly excited about the citizen journalist angle and that he has ambitious and idealistic motivations in that direction, but that aspect of the project has so far amounted to nothing. I wish people who cared abouut that had had all the money, but I guess that isn't realistic. The people who put up the money want to make money. Based on my phone conversation with Roger L. Simon, I think the focus was on that pile of money and interacting with the investors.
And I don't have a way to ban individual commenters. Playah is someone I'm just forced to delete frequently. She needs to filter her thoughts better and become more substantive. I believe she's capable of doing that. We shall see. The only alternative for me is to put on the monitoring function, but that would slow down the flow of ideas. I think it's better this way. You can count on me to actively delete the bad stuff.
You can start a blog for free. There are quality blogs out there running on free services, being written by pajama clad writers for free. You can upgrade to a blog that might have a total investment of a few hundred dollars. There are plenty of knowlegeable tech people who would do any job for a nominal sum. You could hire someone full time to handle tech for under $30,000 a year. You could hire writers and pay them by the piece for peanuts. What could possibly cost $3.5 million? I just don't get that kind of money for a blog. Shoot, I bit the bullet to get professional services to set up an Internet shopping site with a database of over 3000 products and full service shopping and it cost me under $5000 with about $200 per year in ongoing expense, most of that going for credit card processing.
They could have me and any of my skills for almost nothing ... I'm available full time and I could certainly use a supplemental income as I live near the poverty line on a pittance of disability income. I'd behappy to turn The Squiggler into a portal for a lot less than $3.5 million and still give great parties.
JJ, it is not too early to draw some conclusions. And I know a little more than what's in a college textbook. I was a VP at one of the world's largest banks.
Folks, get a grip. PJM hasn't failed yet. You can't fail a venture-funded company with $3.5 mill funding in a couple weeks. Working back of the envelope --- and while I had some discussions with Roger, I'm hardly inside their finances --- they need no more than a couple thousand a month in server and bandwidth costs, and they've got something like a half-dozen staff, so their loaded (overhead included) payroll costs don't exceed $100,000 a month, and that's assuming some pretty generous salaries and benefits, which isn't the usual way a startup runs.
In other words, they won't run out of money for three years.
Nor is it at all clear that the fuss is an indication they're on their way to failing: if anything, on the "any publicity is good publicity" theory, it may be helping. In the mean time, they're getting "instalanched" a couple times a day, Ann is linking them five or six times a week, and there are whole sites (like Laurence Simon's site) dedicated to discussing PJM. Is it all complimentary? Hardly. But clearly even Ann is reading the site, or parts of the site, and so are lots of other people.
Which means page views.
Which is what an advertiser buys.
So before you declare PJM a failure, do some sums. When Apple got its first funding, it was two guys selling hobbyist machines at computer fairs in Santa Clara. It sure didn't look like a success two weeks later.
You think THAT was harsh? I guess you don't read my blog.
By the way: SEVEN MILLION DOLLARS. Not three and a half. SEVEN MILLION DOLLARS.
That's what my source tells me.
Re: Glenn's response
If its true that the editorial board didn't meet until after the site launched, well that's just looney. Content is king. If you are trying to make a splash with an unveiling gala, and advertising, and everything else, you need there to be some there there when it happens...
Charlie, you are correct, PJM has not failed by any stretch. But the start is less than auspicious. And the issue is not just failures of implentation. Its the failure to finish the mad-lib "PJM is _______ [adjective/noun]"
Charlie: Saying "Get a grip" violates my comments policy. There is no reason to characterize me or the other commenters as losing our grip. Make your points without inserting inflammatory (and inaccurate) remarks like that or I will delete. I'm tired of being portrayed as crazy or obsessed for commenting on the very conspicuous, bloggable topic that is Pajamas Media. People have been telling me not to talk about it ever since I did my first post saying why I thought the offer they made me wasn't good. I'll say what I have to say, and you're allowed to say what you have to say over here in my place IF you follow my commenting policy and act like a good faith member of our community, which is marked by civil discourse and arguments on the merits.
"Get a grip" violates your comments policy.
Can I say "oh my goodness"?
Okay, I withdraw "get a grip". Substitute "Folks, you're ill-informed, and naively reacting to a general furor without applying some simple analytic tools that should make the notion that PJM is already failing transparently ludicrous."
Pooh, try this one: "PJM is a corporate service that exists to exploit economies of scale and develop better ad rates for its bloggers while funding more original content."
This isn't as high concept as Jeff Jarvis would like, but there are an awful lot of successful companies that make lots of money and still don't have a high concept that fills in a blank adequately.
Steve, I'd also like to know more about your source. $3.5 million is eminently believable: VCs seem to have pre-printed checks for three-and-a-half. If you ask your source, and your source is well-informed, I'd bet a dollar that you'd find it's "$3.5 million up front, with a follow on of another $3.5 million in a year if certain goals are met." A PR guy might call that "seven million" but that doesn't mean that's the bank balance.
In any case, though, the "where did it go" question is another naive one. just about the only way a startup can fail in a few weeks or months is by spending a big part of their initial funding early on. (I recall one of the dot-com startups that spent half of its $3.5 million on a single Superbowl ad . They didn't last.)
To pick up on the merits of CC's comment, PJM is in its R&D (beta) stage. R&D, by definition, does not generate business revenue and is subject to regular change as circumstances dictate. In short, it is designed to see what seems to work and what does not.
The blogosphere is a novel environment, but there has been no commercially successful venture like PJM attempting to use its unique powers. Even though there are many types of ventures plying some sort of trade there, none has found a way to make its owners money.
That is what PJM is seeking to do.
But as we saw in the nineties new technology business ventures take time and money to develop, and many fail. And it was not just in the nineties that his happened.
For example, the incandescent light bulb was invented in the early eighteenth century. Seventy years later, Edison purchased some patents and sought to develop a filament which would last more than a few hours. He tested thousands of different material combinations, finally settling on carbonized thread to produce the first commercially viable lightbulb. The rest is history.
This discovery process was the origin of Edison's famous phrase "genius is one percent inspiration and ninety-nine percent perspiration".
The 3.7 million investment in PJM is to make sure there is enough money to pay for the perspiration necessary to end up with a commercially viable product.
We can watch the "lab" at work, and our comments whether we agree or disagree with a particular detail are all valuable for the OJM owners. If they are smart they will be watching, listing, evaluating and changing.
When did the issue get changed to whether Pajamas would survive? I thought the issue was whether it was a terrible project that fails to reflect the amount of talent and money that supposedly went into it. Can we get back to that? Obviously, you can keep a website going on the cheap forever, and with all that money, you can make it look like something more than nothing. But who cares? The internet is full of crappy websites. Actually, what is most interesting question is whether the project has or will hurt blogging and bloggers.
Yes, I would allow Cal's post in my comments. It's quite substantive and not abusive. He asks a string of damned good questions. Anyway, my standard is bound to be somewhat subjective. That's inevitable. Things that strike me as too far off, I'll delete. You should note that I DIDN'T delete Charlie's post. I just cautioned him.
CC - I have no problem with that as a mission statement. But it's not their mission statement. Yet. Until they decide what they want to do, how can they possibly be proactive in getting it right?
vnjagvet - R&D is fine...BUT, (and this is something that the late 90's should have taught us) you do that before you make your 'big splash' not after. Nothing wrong with a 'soft launch'. When you go for the big unveiling, you have to be ready to deliver as soon as you flip the switch.
The fact that basic conversations are still in progress, more than a week post-launch, does not inspire confidence that they have a clear direction.
I have some personal experience in this area, having worked for a (failed) e-tail start-up in the late '90's. The problems PJM is having bring back some very bad memories for me. Though I wish we would have had $3.5 mil in VC...
Seems to me that the worst aspect of all this is that anyone thinking about investing money in blogs or the internet in general can now point to a high-profile failure, and put their money safer.
That's what was irking me at the beginning of this whole mess. These are supposed to be at the top, the best, the upper crust of the blog world (at least on the right side of the aisle) and they're literally the punchline to a hundred blogosphere jokes now. In screwing the pooch so publically, SO badly, OSPJMABCDEFG or whatever they are have done nothing but lower the value of bloggers across the board. We are ALL cheapened by the monumentally bad decisions and Keystone Cop-like beginnings of this well-funded venture.
This could have been avoided by simply talking to bloggers outside their little circle of influence...but alas...that has never, and will never happen. Some people just don't like to mix with the "lessers."
I agree with Pooh. PJM lost the opportunity to soft-launch when it went for the hoorah-look-at-us huge party in NYC.
I wouldn't say PJM is already a failure. I say, they stumbled out of the gate, and still haven't righted themselves. They are, in fact, still groping around rather blindly in a shocking fashion: they have all that money, how did they convince someone to give it to them? And what are they really going to do with it? They don't know! Why didn't they delay the launch until they were ready? Or why didn't they soft-launch and let things hum along for a bit while they tinkered with the site, figuring out what worked best? There's nothing like a little humility to evoke kind feelings in others.
I'm hoping that PJM does get it's act together, because I would like blogging to come with more income-generating opportunities! It would totally suck if PJM poisoned the well for everyone else. As it stands right now, it seems that PJM suckered VCs into ponying up some cash without a viable business plan for generating income. What I wouldn't give for a copy of the PJM business plan!
BTW: just how reliable is that $3.5 number, anyway? Where did that come from? It's getting tossed around a lot, and I find it really hard to believe that anyone would cough up that amount of cash without a solid product to invest in.
As to Ann's question, "has or will [the project]hurt blogging or bloggers", my answers are:
No it has not hurt blogging.
No it has not hurt bloggers.
No it will not hurt blogging.
No it will not hurt bloggers.
Any experiment, whether it succeeds or fails, teaches lessons to anyone in the involved "business space" of the experiment.
It might hurt the principals of the venture who are also bloggers in the sense that they might lose money and/or credibility in the industry. But how could those of us who were not involved be harmed by the failure of this venture?
Henry Ford failed four times in the automobile business before founding the Ford Motor Company in 1903. Those failures didn't seem to hurt Ford or other automobile producers, manufacturers or owners.
"For example, the incandescent light bulb was invented in the early eighteenth century. Seventy years later, Edison purchased some patents and sought to develop a filament which would last more than a few hours. He tested thousands of different material combinations, finally settling on carbonized thread to produce the first commercially viable lightbulb. The rest is history."
(It was not the early 18th century, but the 19th) Did Edison throw a huge, splashy party before he knew the lightbulb would light and stay lit? No. You can bet that he made damned sure of his invention's viability before he called attention to it.
"To pick up on the merits of CC's comment, PJM is in its R&D (beta) stage. R&D, by definition, does not generate business revenue and is subject to regular change as circumstances dictate. In short, it is designed to see what seems to work and what does not."
No, it is not in its beta stage. Nowhere on the page is the word "beta" mentioned. I have never seen a web product that was in beta stage that didn't clearly say so. Look at Google News, a service that has been operating since September of 2002; notice what it says prominently on the logo: BETA. You don't have a huge launch party at the Rainbow Room for a beta. This just sounds like another weak defense of incompetence.
When did the issue get changed to whether Pajamas would survive?
My guess would be somewhere between "train wreck" and "If PJM had succeeded".
I have no problem with that as a mission statement. But it's not their mission statement. Yet. Until they decide what they want to do, how can they possibly be proactive in getting it right?
Pooh, I think it's closer to the real working mission statement than you realize. But it doesn't satisfy the demand for flash and pith that marketing types like.
No, it is not in its beta stage. Nowhere on the page is the word "beta" mentioned.
Um, Palladian, there are lots of things out there that are in beta even though the name doesn't say so. (I'd point to the X.0 version of any Microsoft product, for example.) In any case, PJM is trying to invent a way of using a fairly radical nusiness model. You'e probably right that they're not in beta --- pre-alpha is probably closer.
Ann, I've got to say, "If you don't know what to do, then accept the harsh truth that your only real ability is lies [sic] in convincing fools to give you money" seems significantly more abusive than saying "get a grip."
Pooh:
I am not sure that beta testing the idea in public is such a bad idea.
There is nothing set in concrete that cannot be changed.
To the extent it breeds competition, that may not be a bad thing for the overall venture.
Sometimes controversy and mishaps generate traffic in the same way people are fascinated by a train or car wreck.
The burn rate of this organization is pretty low, as I understand it (and as explained in an earlier comment) and to some extent, building audience is a matter of time and exposure, which is not costing much money to generate.
This is not to suggest that it was better to come out with a poorly conceived plan, only to suggest that doing so may not be as detrimental as it would be for another kind of venture.
Palladian:
You are right, of course. I did not proof my comment, and missed my eighteenth century reference.
And you are also right that PJM had a big splash opening, which may show they did not intend their opener to be that of a beta.
But in, e.g., the software industry, there is often much fanfare to introducing a new program, or version six months or a year before official introduction all the while beta testing is still going on. Often many of the features of the new version still don't work, hence the derisive "vaporware" description.
And you are also right that PJM has not labeled its product "beta" as has Google. But does that really matter if functionally, that is what is going on. I have nothing to do with PJM or any of its principals.
I am just making observations based on my experience as an owner, executive and investor of entrepreneurial businesses.
Fortunately, my observations are worth only what compensation I am receiving for them.
You are welcome to 10% of the gross revenues derived from those observations if you desire.
I don't know if PJM will succeed or fail, or whether they're hideously behind where they ought to be in their evolution or right on track. No data, no opinion.
However, I do know that the idea of a blogging portal is workable, but will not lead to massive fortunes. I know this because I have a news portal that is written entirely by bloggers (www.bloggernews.net); it's entirely viable, it pays its own way, and it doesn't make any real money.(And I developed it with spare time and lots of begging e-mails to other writers; if someone wants to give me $3.5 million retroactively, I'll endorse the check.)
Would BNN make a fortune if it had A-list bloggers associated with it? Almost certainly not, because A-list bloggers themselves do not generate substantial revenue streams. Glenn could make a living at blogging if he wanted to; he's #1. A couple of the other big-time guys do OK as well, although Kos is not buying Learjets. Then there's a big swathe of people who derive some nice bonus income from their blogging, but who aren't ever going to earn a living doing it. If I had A-listers writing my copy for free, BNN would make more money than it does. It might even make enough money that I could do it full-time. But it wouldn't make so much money that it would be of interest to any serious venture capitalists, particularly if I had to actually pay writers for content.
I suspect that the hope behind PJM is that there will be synergy between these bloggers, and that Frank's 100K readers will join Larry's 100K readers will join Amy's 100K readers, leading to 300K readers for everyone...but it doesn't work that way. Frank and Larry and Amy already have a great deal of overlap. The remainder, those who don't overlap and who could in theory synergize between sites, have generally already been exposed to the potential synergies, and have rejected them. Frank's readers who don't currently ready Larry already know about Larry's site - they don't like it.
So best of luck to PJM, which includes some friends of mine. I hope that it is a very successful venture and that everyone gets pots of money out of it. I hope, in other words, I'm completely wrong about blog economics. But I don't think I am.
Charlie,
You could be right, but I'm not sure that everyone involved would neccesarily agree. Further, what is their plan for driving traffic? As in, what makes PJM indispensable or at least add value? I have no axe to grind here, I just objectively don't think they are doing a good job...
vnjagvet,
there's nothing wrong with public-betaing, that's the point of a soft launch. The problem is that when you claim that you are going to be revolutionairy and have a big to-do about it, and then its a dud, well that's a blow to your credibility. This is not analagous to MS releasing a buggy new version of Word, or even CIV IV being not quite ready for primetime, (which it isn't, but I have faith that they will patch...) because there are plenty of other places for people to go to get their news, or their snark or their mixture of both (snews? nark?). MS has a degree of market power (as does Sid Meier) which PJM does not, which is why a stumble out of the gate could prove costly.
Can PM survive its unimpressive launch? Absolutely. One big story such as Rathergate can wash everything away. The site has not wrecked its credibility as a source of information. But the gunslingers who are attacking PM's critics here need to be careful. All things equal, people do business with their friends. All things unequal, people still do business with their friends. Therefore, it is important to have as many friends as possible--even critical ones.
"Steve, with all due respect, even if someone were inclined to trust *you* ...we'd also have to trust your anonymous source."
This is no ordinary source, JJ. It's bigger than the Head Pajamistanis in Charge. It's not some guy who cuts Roger Simon's grass.
Same person told me Daddy Warbucks, AKA Aubrey Chernick, was the one who told Simon to put out the 3.5 figure. I was not told why.
It's not important, really. I only released the news to be an irritant. The contrast between the quality work other bloggers have done with fifty bucks and the inept work the Pajoompa Loompas have done with their huge nest egg is stark, and it would be horrible even if the figure were a thousand dollars.
Charlie: Hell froze over - we agree ;-) Among one group of my friends, "Get a grip" is commonly used instead of "Wait a minute..." or "Oh, come on, what about..."
I was going to post earlier that I thought Cal made some legitimate points but his attitude and excess verbiage (calling people "fools") wasn't exactly the way to win friends and influence people, so I wasn't surprised by the lack of response.
I thought Glenn Reynolds ultimately provided a gracious reply, (probably in response to Ann's post).
BTW, Finn Kristiansen provided a much more thoughtful and business-like set of suggestions here on Althouse a few days ago. I hope someone forwarded it to the principals.
I only released the news to be an irritant.
Doesn't that pretty much say it all?
It was a great party, in the tradition of 90s dot.com grandiose spending. I got to meet lots of bloggers I have enjoyed reading, that was fun. I wasn't planning on living on the revenue from the ads. In fact, they haven't yet given me any ads. I don't really care that much.
My biggest question is: why are people giving them free advice on that forum?
Moxie, my love, might it be that the billing rate matches the average value?
Pct, you're mistaken about $3.5 million for a software/e-business sort of startup. Think "two to three years operating expenses". It's different, for example, for a manufacturing concern.
Pooh, I'm not sure everyone involved would agree, but this is something where I actually have some inside information.
Similarly, on the value add question, there are some limits about what I feel free to talk about (even though they didn't employ me) but I can point to two things.
First, while I'm sure that, say, Roger's 100K plus Charles' 150K plus Glenn's million aren't going to add up to 1.25million, I think you can be sure that they'll add up to more hits for everyone, for the same reason everyone tracks back or puts their blog address in their signup information. It's possible analytically to evaluate how much it has to do to be worth it (I'll leave that as an exercise for the interested reader) but I'll give you the hint that it isn't a whole lot.
Second, they actually have plans to do some unusual things; one example that they've talked about publically is the notion of sending "reporter in a box" kits to places with something happening in order to get blogging from the ground. Consider, for example, what could have been done with a laptop, a satphone, and a webcam by a Superdone blogger in New Orleans during Katrina. Hardware investment, a couple grand. What would the potential value be of a live video feed from the Superdome the day after the hurricane?
Charlie: Hell froze over - we agree ;-) Among one group of my friends, "Get a grip" is commonly used instead of "Wait a minute..." or "Oh, come on, what about..."
I promise I won't tell anyone.
By the way, just to make something clear, I'm by no means sure that PJM will be successful; I just think some of the criticism has lacked realism.
If they really wanted to make money, they'd take that VC and invest it in a porn or gambling site where the real money on the Internet is. Also where the most creative tech people are born. There is absolutely zero about the PJM site or the content on it that is different from what any of the rest of us are doing and many are doing 1000% better. I questioned before how one could possibly spend $3.5 million on a blog. I figured it out ... it will cost them that much to get mentioned on TV and in major media. So what makes them any different from any other MSM entity. Who wants more MSM? Isn't that what blogs are for, to be a viable alternative? And isn't Instapundit already providing a better aggregate? I guess they could become PJM Select. Frankly, I don't see any way this venture can have any viability, with no originalty of format or content, no uselfulness since their nitch is well-filled by others and we don't really need another compiler or aggregator. We can all list the various author's own blogs in an RSS feeder to get them in one place and keep updated on new posts. So what's the point of PJM anyway?
People have been telling me not to talk about it ever since I did my first post saying why I thought the offer they made me wasn't good.
Ann, come to think of it, you keep saying people are telling you not to talk about it. Can you actually point to a comment that says that, bearing in mind that "I think you're wrong and not evaluating this very rationally" is not the same as telling you not to talk about it?
I don't think you're characterizing the critics fairly.
I only released the news to be an irritant.
Doesn't that pretty much say it all?
Indeed. There's a lot of spite mixed in with the possible disaster we're watching unfold. PJ should have seen this coming - blogs are personality-driven, they have some of the biggest personalities in the center-right blog field heading their operation. It attracts all this e-drama.
As for the Website Formerly Known as OSM, the row of marquee players only seems to mask managerial ineptness. We've all seen this before:
Pajamas Media: the Planet Hollywood of blogs!
PJ Media is a private company. They have no responsibility to make public their internal decision-making process or their internal communications. The people who own the company can do what they want with it. (That doesn't mean those of us on the outside - potential customers - have no right to criticize what we think they are doing.)
While I am surprised that minor technical glitches mentioned here and elsewhere days ago have yet to be fixed, after reading Reynolds's response, I'm not surprised that little has happened quickly to rectify content problems.
Reynolds confirms something I thought before this all went public: the editorial advisory board has heretofore been "window dressing," ala the New Yorker's stellar editorial advisory board when it went public (most of whom thought the magazine would fail and rarely contributed anything to help it succeed in the early years).
This was, is, and remains the project designed and managed by just two people: Roger L. Simon and Charles Johnson. (How much they own of it after the cash infusion is unknown.)
It is controversial because a lot of people had very high hopes for something "home-grown," the advance p.r. was pretty good, but the delivered product was unbelievably banal. And the follow-up in the days immediately after the launch was virtually non-existant. (Does anyone else find the "Blogjam" section touting the Thanksgiving Day blogjam incredibly stale news at this point?)
Squiggler, if that's the way you feel, I suggest you not invest in PJM.
Look, folks, one of the things I think is missing from this whole conversation is that part of what a VC does is invest in high-risk things. Some of them are inherently silly; I remember a client who wanted to do internet dot-com drycleaning. The idea was that you'd find a local cleaner, they'd come to your house.... Now, why it didn't occur to anyone that this business model had been tried by drycleaners, and given up, 30 years earlier, I don't know.
Sopme seemed inherently silly (letting people auction off their spare junk?) but turned out not to be.
Some of them turned out not to be inherently silly, but hard: Amazon makes a ton of money now selling toys and pet stuff, but thanks to some early missteps, K&B Toys put themselves into bankruptcy; Pets.com did much the same with pet supplies. (It turns out that what Amazon really has is about the best just in time inventory and fulfillment operation in the world, along with a very good, highly available, high capacity web site.)
Before the dot-coms, I didn't buy into the Mircosoft IPO because Borland's products were so much better.
The point is that you can't really predict very much this early. Maybe PJM isn't going to work out; that sure has happened before. Maybe BNN would do it better, or powerline news is doing it better; they don't have VC money though.
Well, do you know how you get venture capital?
You ask for it.
Ronin, most VC-funded companies have some kind of "Advisor Board" of big names who get a chunk of stock for the use of their names. As I recall, Thinking Machines (a startup from the parallel-processing and AI boom and bust) had Dick Feynmann, Marvin Minsky, and I think John McCarthy. (I had a friend in grad school who, as an intern, shared an office with Feynmann and Minsky. I would have given my left testicle to have lunch with Feynmann. but I digress.)
And I agree completely that people are entirely entitled to criticize them even though they're a privately held company. My real complaint is the degree to which the criticism has been ignorant, hyperbolic, semi-hysterical, and basically silly.
Charlie: "Can you actually point to a comment that says that, bearing in mind that "I think you're wrong and not evaluating this very rationally" is not the same as telling you not to talk about it?"
Yeah, lots. Explicity and slightly indirectly. I'm not going to dig things out, but look at the stuff back in August under Pajamas versus BlogAdds.
Charlie...I've been involved with online marketing and development since the original CompuServe days (DOS/Unix), before the web or AOL or Windows. I agree with you though on being too early. I don't think many predicted that Microsoft and their Win 3.1 would eventually do in OS2 and IBM. But software development and a blog that doesn't want to be a blog ... well, I guess I'm asking the same question as Ann ... what do they want to be and why? And why should anyone care? BTW, Microsoft did in IBM because they were the little guy taking care of the little guy (the home user). This is a case of the little guy wanting to be the big guy by becoming just like the big guy ... all about advertising and money. They sure don't want to be a blog.
I wonder what the interest is on 3.5 million? If they stuck that in some brokerage account and left it doing nearly nothing, it would throw off, what, $140,000 a year or $11,666 a month, at 4%?
And yet we look at the site and say, "Oh my, where did the money go?". Well, as some have said here, it likely went, NOWHERE...yet. They could run the site, as is, without changes, indefinately till we are all dead, based on the money that is there.
So if we are basically seeing nothing that costs any money, then we can assume there is a hang up somewhere in terms of HOW to proceed. Delay is not failure or mistakes are not failure, especially in a medium with nearly zero costs. They didn't invest in an airplane and crash it.
DEC said...
But the gunslingers who are attacking PM's critics here need to be careful. All things equal, people do business with their friends. All things unequal, people still do business with their friends. Therefore, it is important to have as many friends as possible--even critical ones.
Unless you plan on buying tons of advertising from them, I would doubt they would care about any particular blogger's friendship. That's not really relevant to the business model. They have to speak to the advertisers. That is their target, not bloggers.
Charlie, I don't have VC for two reasons. One, I would have to write up a business plan that shows a realistic return on the capital, and I don't see a way to make that happen (and I don't write business plans that I don't believe), and two, I'm just in it for the fun. That's why I handcoded everything myself, and have ground-up rearchitected the site twice so far, instead of relying on perfectly good free software. (It occurs to me that this is probably a very wrong definition of "fun".)
You're right that there will be some synergy from interpromotion, and that the return from that will be well worth the cost to the bloggers involved - I just don't think that the return will be high enough in absolute terms to be worth the management time it requires to facilitate.
You're also absolutely right that it's way too early in the day to be talking about failure or cratering. Some critics (I exclude Ann) do seem to be jumping on a bandwagon of doom-doom-doom, rather than having an analytical position.
Finn, you are underestimating the importance of PR beyond potential customers. In the mid 1960s, Ralph Nader didn't own a car. He was not a prospective customer for GM. But he destroyed the Corvair as a product line.
So DEC, PJM is unsafe at any speed now, a Corvair in the form of a blog? Dangerous even, with bad bloggy suspension? And the naysayers are Ralph, warning the customer of its danger?
One problem with the analogy: G.M., or Airbus, or "Infant Toy Smaller Than Mouth Incorporated" cannot go, indefinitely, making products that may in fact, KILL YOU, by usage. So there are regulators in the wings that they are subject to. So if you make a deadly product (as opposed to a cosmetically bad one), and someone raises a stink, and proves it, you may be in serious trouble criminally or financially. And one wonders as well, was the Corvair actually a popular car, and in wide usage, when Ralph began to chirp, or did he critique it on day one, before it had even found an audience?
In our case study, there are no regulators at all, so they need not worry about them. The number of bloggers is infinite, so they need not worry about them. (And even the finite number of top bloggers ultimately want to sit in a small quaint town in Maine or South Carolina, sip espresso, and spend the day blogging for a living, so they are susceptible to the lure of "filthy lucre", and one need not worry about them either).
So we turn to the true customer: Advertisers. They are all PJM (unlike G.M.) truly has to worry about. How do you feed the advertisers the necessary eyeballs?
Here is but one method:
(And based on the $3.5 million)
You know how they can immediately boost readership on the portal (and then, via trickle down, to its member blogs)?
Okay look...you start with $3.5 million, placed with a good money manager at Goldman, Sachs. They earn you a return of a mere 7%. That translates to $245,000 per year, or $20416 per month. Take 10,416 of that money and offer it as two $5,208 prizes that all registered members of the 70 PSM house blogs will be eligible for. Take another $1,000 or two, and offer "spot money" prizes, where bloggers reading the member blogs have to search for some special symbol or word or phrase and can then become eligible for the prize. That leaves about eight thousand. Hire two really smart college students to help with grunt and punt work. (Oh, and pay your cap. gains/dividend taxes).
There are so many ways you can use a pot of money to boost readership, without even spending down the pot of money.
Heck I have a friend who continually annoys me, because he sends me links to articles using one of those search sites that offers monthly prizes. I am constantly like, "Dude, use google, or A.P. or something," and he is like, "I may win something"... and I am the dirt poor one!
Finn, it sounds to me like you just laid out a business plan. Give it a try.
As I understand it, PJM doesn't want to be in the raffling off pageviews business, it wants to be in the broaden the exposure and bring in original content business.
To: Finn
You wrote: "So DEC, PJM is unsafe at any speed now, a Corvair in the form of a blog?"
My point was that people other than customers can have an impact on a company, not that PJM was a dangerous product.
You wrote: "The number of bloggers is infinite, so they need not worry about them."
I am sure Dan Rather thought the same thing.
You wrote: "There are so many ways you can use a pot of money to boost readership, without even spending down the pot of money."
One way to boost readership is to have quality content.
I find it more fascinating that this was supposed to start as a new ad network... and even some blogs advertised very publicly that they would be moving theirs from BlogAds to PJM Ads on Nov. 16th. It's now the 28th, and Instapundit, LGF, Rogerlsimon, and Volokh either still have BlogAds up, or no ads at all. You'd think they would have had at least that working right in the beginning.
It's now the 28th, and Instapundit, LGF, Rogerlsimon, and Volokh either still have BlogAds up, or no ads at all. You'd think they would have had at least that working right in the beginning.
Why? I'd expect having many ads running would be about the last thing they'd get. (Hint: you don't generally get your best revenue the week after you open.)
Pooh, assuming you're still looking down here, I just happened across Roger's original statement about PJM, which includes the following:
We have enlisted some others with names familiar to you with the intention of working in two areas - aggregating blogs to increase corporate advertising and creating our own professional news service.
Cf. my formulation.
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