things, like what do we do with banking relationships? What do we do with the capital structure? And just kind of planning for where the company’s going to go next and what type of support it needs in growing next.
X: Ben mentioned that he’d been doing all the finance himself before you came along.
PC: It was internal! Those just plain keeping the books—how do you pay your bills? How do you pay your people? And that sort of thing—that’s when you first just need to get the business moving. But once you start getting a large number of people in and once you start getting revenue in, there are all kinds of other—I keep going back to the word, the foundations need to be set. Because if you don’t set the foundations, you can’t report on what you did and reporting is part of your report card. If you report the performance of your company, that really shows how you’ve done. And if you don’t have systems to track that, it’s hard to say how do I generate my report card for my company. And the investors want to see that too.
X: One of the biggest questions when talking about online startups is how to make it profitable? Is looking for new ways to monetize going to be part of your role as CFO?
PC: There are a lot of different ways in which you can monetize. And that seems to be quite the word that people use a lot when they talk about Internet companies. There are lots of ways in which you can monetize, and I think what we do here is the company reinvents itself almost every few months. You reinvent in lots of different ways. You reinvent in the way you brand, branding meaning how the public and how your fan base and your users view you—you’re answering to what they’re asking for. You keep changing and evolving in order to meet the needs of your user base and your fan base. So that kind of reinvention goes along all the time—it’s a continuous evolution. But as the company grows with revenue and expenses, that’s part of the reinvention. Like you said, monetization of profitability is key. But a lot of Internet companies don’t achieve both. And that’s the unusualness about this company—somehow we kind of stumbled upon it, and then we found the way and made it more scientific on how we actually continue to monetize. And yes, we definitely will need to explore all different ways to monetize, but we want them all to be able to answer our users’ needs.
When we first started up with our most wonderful fan base, we were just satisfying them, we didn’t think about monetizing them. And then the next thing you know, we have all these people visiting our sites, and we could actually advertise because there’s an audience! So first you go back to your core basis: satisfying your users. They get happy, —oh wow! We have a fan base—now you can advertise. That’s one natural progression of monetization. But then what happened is we got a large enough fan base that they kind of said, ‘we want some merchandise too!’ Because all the fans kind of like to carry around they’re little, tangible stuff that says they’re part of the fan club. So things like T-shirts, we sell some of that stuff. This isn’t something that we said, ‘oh, we’ve got to monetize,’ and we come up with these ideas. It was almost driven by what the users are asking for and what their behavior patterns are. So we started doing little merchandizing—trinkets and magnets, and things like that. Then as the fan base grew and got a little broader, the publishing companies would come and say ‘hey, how about doing a book with us?’ Yes, in a way we continue to be creative to come up with ways to monetize, but in many cases [if] you stick to your core values of keeping your user happy, those things kind of happen and
