How To Build a "Lifestyle Business" with 30 Million Visitors Per Month: The wikiHow Story

12/16/11Follow @wroush

In Silicon Valley, there is no more pejorative term than “lifestyle business.” It’s usually applied to companies that do well enough to earn their founders and employees a living—sometimes a very good living—but that will never make anyone mega-rich. Venture capital partners, who have to weed out all but the fastest-growing companies if they’re to have any hope of making the Forbes Midas List, often dismiss these less meteoric players with a phrase like “It’s probably a nice lifestyle business, but it just won’t move the needle for my fund.” Even many startuppers, who often work insane hours on the assumption that their options will turn to gold when their company is acquired or goes public, seem to reserve special pity for lifestyle entrepreneurs who haven’t won Sand Hill Road money and aren’t perpetually “killing it” or “crushing it” in the way Silicon Valley culture demands.

Well, I visited a Web company recently that occupies a lovely cottage near downtown Palo Alto, has grown to 12 employees without raising a dime in outside funding, and attracts 30 million unique visitors a month to its website. For comparison’s sake, that’s more traffic than Groupon, the New York Times, Match.com, Zynga, or Yelp can boast. If that’s a lifestyle business, then I’ll have what they’re having.

WikiHow founder and CEO Jack Herrick

The company is wikiHow, which, as the name implies, is a crowdsourced encyclopedia of instructional articles on everything from how to kiss to how to perform CPR on a dog. (As it turns out, those are pretty much the same thing.) It was founded in 2005 by a former management consultant, serial entrepreneur, and rock climber named Jack Herrick. If I were making a list of unsung heroes around Silicon Valley, I’d nominate Herrick for his success building a huge media property without help from the venture industry, and for assembling an amazing online resource for readers without polluting it with acres of advertising. One hundred percent of the company’s revenue comes from unobtrusive Google AdSense text ads, which makes wikiHow one of the many companies that owe their existence to the search and advertising giant; more on that below.

“I hate the term, but yeah, that’s what we are, a lifestyle company,” Herrick confessed to me in a recent interview. “Somebody needs to create a better word. I think it should be ‘awesome company.’ One of the reasons I have the best job in the world is that we are not venture financed. It just gives us so many more degrees of freedom. We can decide not to have a sales force, we can decide we don’t need to grow revenue 100 percent this year. We can figure out what is the most important thing in our mission, and focus on that.”

The mission at wikiHow is simple, and as breathtaking in its ambition as Google’s: “We want to cover everything and have it be universally good,” Herrick says. And the site has made impressive progress in that direction. It features more than 129,000 user-contributed articles in seven languages. Obviously, it’s not nearly as comprehensive as Wikipedia, which has 3.8 million articles in 282 languages. But you won’t find Wikipedia articles on such indisputably helpful subjects as How to Deliver a Baby, How to Remove Odors from Your Car, and How to Accept Criticism with Grace and Appreciation. If there’s anything Web audiences seem to love more than seeking advice, it’s giving it—and wikiHow taps both impulses with more sincerity, and far less junk, than any other how-to site I’ve seen.

Back in July, just days before its acquisition by Autodesk, I profiled a maker-focused how-to site called Instructables. I called it “the rare crowdsourced site that actually turns a profit,” which brought an e-mail rejoinder from Josh Hannah, a friend and former business partner of Herrick’s who now works at venture firm Matrix Partners. Hannah called wikiHow “the even more rare profitable crowdsourced site that has 5x the traffic.” That might be a bit of an exaggeration: WikiHow’s U.S.-only traffic is only … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Scott

    Dear fellow entrepreneur,

    There is a huge ecosystem out there that does nothing but move entrepreneurs away from building business that can grow and flourish to crafting empty shells that can be inflated and sold. The big law firms have their “entrepreneur universities” to teach you how to get your company ready for funding. Business plan competitions, local economic development agencies and angle groups all do the same. This entire infrastructure is all aimed at getting you ready to sell (out) your company to VCs. By the time you have twisted and bent your company so many ways you will have changed from focusing on your old customer (the one with the pain that you have an unique solution for) to your new customer (the VC). It is the job of VCs to buy and sell companies, not to build them. And certainly not to solve customer’s problems. That is the reason why VCs have a 90 failure rate (by their standards). Think very carefully about that. If they fail to fund over 90% of business plans that they see and 90% of the businesses fail then why on earth should you bend yourself to their needs. Sure, if they do take the company public then you might get rich, if they haven’t kicked you out and the stock doesn’t tank before you call sell your shares. If getting rich gets you out of bed in the morning then go work for wall street, do not kill yourself building a product into a company.

    There is a radical solution out there. Find a customer with a problem, create a solution you can build with your resources, sell it to the customer at a profit and build a profitable business. That may mean cutting down on the scope of your first product to what you can deliver. Say you want to build an electric car company. That would take billions in VC money. Before you get past your first round of angle funding what ever brilliant insight that you may have had will be crushed by the twisted needs of the VC. Do not go there. If your idea to too large, find a piece of it that you can build and sell with your resources, then make and sell that product to start and build your company from there. That might only be new type of suspension rod in the car example, but if you can make it and sell it for a profit then you build from there.

    You say you are an early stage entrepreneur and not interested in the long haul? No worries. There is always someone there to buy a profitable small business. Rinse and repeat on a larger scale. That is what the whole lean start-up thing is really all about.

    Yes, I guarantee you that the VC infrastructure will laugh at you, but what is wrong with solving problems and creating jobs? Does this sound more like your father’s company or your grand father’s company? I hope so. They built companies that employed our neighbors, paid the taxes that build our infrastructure and educated us. It is time we stand-up and do the same. “Occupy Sand Hill Road” would be a silly exercise. Ignoring distractions is always the best course. What we really need is to occupy main street. Occupy main street not in protest, but in progress.

    Find a problem, create a solution, build the product from your existing resource, sell at a profit and build the company! Only take money from those who love you – friends, family and founders. Listen to your customers and then listen again and then listen some more to your real customers. Take pride not in how many share you have, but in how many people you employ. Be proud, be VC free, be a real entrepreneur.

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