Interview with Dan McComb, CEO of Biznik

Biznik is a business network for indie professionals. Our main site users are people who are bootstrapping their business and we enable them to collaborate with other people. The most sustainable path to success for new businesses is to collaborate with other small businesses.

For us, collaboration means networking. It means finding people who might have something in common with you with which you can share resources or referrals or clients. For example, if I’m a bookkeeper, I’m looking for people to do their books, but unless you can bring those people together then both of them are lacking something.

It’s not just for everyone. I think the thing that makes it work so far is the fact that it’s targeted like a laser beam at the needs of what we call “indie business people.” When I say “indie,” I choose that word intentionally. It’s just a foreshortening of the word independence, but it has a connotation that’s attached to it.

And not afraid to challenge the status quo. They usually have small budgets but big ideas and creative approaches to solving problems.

These businesses are everything from one-person web development shops to lawyers, accountants and everything in between. What we found so far in Seattle, where most of our users reside is that these individuals are quite creative.

There’s a lot of massage therapists in Biznik, perhaps because Seattle seems to be the world capital of massage therapy. There are also a lot of real estate agents, which I think is traditional. Real estate agents seem to understand the value of networking just about more than any other profession. We have lots of what you would expect, like the insurance agents and real estate agents and more of the sort of wacky, oddball creative professionals. I guess that’s how we describe it.

I came about via my need to network for my business. I had just married my wife Laura, who is also a co-founder of Biznik. I was a web developer. I had been building website since 2000 in Seattle.

I was looking to build my business after getting married because my wife looked at me one day and said, “Honey, what are you doing to build your business besides the 20 hours a week that you’re billing?” And so she said, “You should really check out business networking,” because she had actually been a member of a mainstream business networking for about six years and was getting quite a bit of business from her involvement.

I attended a couple of meetings and was really not just disappointed with the group, but actually appalled and frankly embarrassed by how bad my perception of what they were offering was. Their web site was an embarrassment.

It was so bad that I couldn’t believe it existed in Seattle. In a place where technology seems to lie around on street corners, here was this huge organization with a web site where you couldn’t even find individual members, much less make connections between them. So I literally thought to myself, “I can do better than this in my spare time.” I can go home and cobble together a social network and just throw it online and advertise it to a dozen of my friends and we can start our own little network.

I actually mentioned that to Laura and she said, “You’re crazy, don’t do it. Just suck it up and go back to this group and you’ll learn to love it.” For whatever reason I just got stubborn and said, “No, I’m going to do it.” She said, “Well OK, if you’re going to do it, you’re going to need some help and I’ll help you.”

So I literally put together the first version of the web site in my spare time. We invited I think a couple hundred of our friends. We knew lots of people in Seattle in the creative community because we’re both very active in that community and literally a dozen of them showed up for our first event.

The biggest advantage that it gives you is that you know right away whether it’s working or not. I could tell immediately whether or not the site that I was building was effective, because if it wasn’t working for me, then I figured it probably wasn’t working for everybody else because they were working on the same problems that I was.

So from the very beginning I was essentially solving my own problem, which I think is a catalyst for a lot of great ideas. A lot of inventions I think come from that.

We started this project elbow to elbow with about a dozen others, who provide feedback along the lines of “We like this” or “We don’t like that.”

What really made Biznik stand apart, was bringing together this community of people with many different skill sets. We bring together individuals who can teach one another about different aspects of business, whether it be marketing, web design, to launching a blog.

The web site has grown organically from the beginning. I looked around at what other social networks were doing as I’d been a fan of social networks ever since I discovered Friendster and realized that I could use it as an index to my social network. Going to parties and meeting a cute girl and forgetting to get her phone number. But then the next day being able to go on to the friend who held the party and find her in his friend network, and then be able to send her a message and get a date out of it. To me that was really cool. I got it right away.

It seemed to me that that should be applied to business networking. I always wondered why these mainstream sites weren’t creating communities for business networking.

One of the things that I think we’ve realized is that we believe in technology and the web and all those great online features that come with being on the cutting edge of all that. But we also believe that the most dependable and sure way is to build trust via face-to-face events, which is the essential foundation of every business relationship. So Biznik is about bringing people together from the online world into the face to face world and bridging those two worlds through our events.

We have a membership model so the way that we make money is through memberships. We call them supporting members right now. What that means is everyone can join Biznik for free. We have a real belief that it should be open. From day one we’ve created Biznik to be an open platform for connecting people.

Whenever we face a challenge of design, like building a messaging system that would connect people. You can choose as a businessperson to get in the middle of that transaction and charge money to connect people, but what we realized was that that’s not our job. Our job is to connect people, not hold them apart.

We built the system to get us out of the way as much as possible and get people together as much as possible. We say to our members, “If Biznik is working for you and if it’s relevant for you, give us $10 a month. In turn we give you a few more features that make the web site even cooler than it would be otherwise.”

As it turns out, right now, before we even launch the significant upgrade that’s coming on June 9th to Biznik, 5.5% of our members are choosing to pay us. While that’s not a lot of money, right now we have 195 people who are supporting members out of the 3,000. However, if we maintain that percent as we continue to grow our members it can be a significant source of revenue.

Last year at the beginning of the year we had 109 members. At the end of the year we had just over 2,000 members. If we continue to grow at that rate, like we are already growing at, we’ll have 40,000 members by the end of this year. If we can maintain just our current rate at 5% of them being supporting members it’ll be a $200,000 a year business. If we can double it to 10% which is our goal it’ll be a $400,000.

It’s viable when you grow it organically. In other words, if we had taken venture capital and we had to scale quickly, then it wouldn’t work the same way. You have to have a different business model.

We don’t have that constraint. We are quite content and happy to grow organically and have modest income goals, because we’re more concerned with making what we’re doing authentic. That’s at the core of everything we’re doing.

There is quite a bit of cheesiness within the business networking arena. A lot of what passes for business networking, for me I just find unacceptably fake. It’s people promising you all these things and saying, “Just sign up for our group and pay $500 a year and show up one a week seven o’clock in the morning. You’ll love it and your business will grow from it as a result.” But they don’t actually let you try it before you buy it usually, at least not for long enough for you to tell whether it’s really going to work.

Biznik you can create a profile and you can jump right in and do everything for free. That’s been our whole approach from day one.

We need to make money to be able to continue doing what we’re doing and to improve. We don’t need to make a lot of money. Money isn’t necessarily our immediate goal in all of this because we’re having a lot of fun doing it. There’s a lot of value just in building a strong network.

That’s what we’re doing, and our long-term goal is to really scale this out. We’ve been successful in Seattle. The fact that we have 2,000 members in Seattle to me is a fantastic success. But what we haven’t been successful doing is taking what has worked so well in Seattle and making it work in other cities, which is why we built the current web site. The web site that we have now addresses that need at the core level, which is localization in different communities.

Essentially I have funded my efforts through Biznik. It was driving more business to my web design business. It proved that Biznik actually worked.

Well Biznik didn’t start out as the business. It started out as a community first, and it sort of accidentally turned into a business.

So really I’ve only been working fulltime on Biznik since January. That was when Laura and I made the decision to focus on Biznik. Essentially Biznik is funded by Biznik. The work that I got through Biznik allowed me to then focus on building the site in my spare time.

Our developer, John Adair, who’s done a magnificent job on releasing everything that you see on the current web site. He is someone who I met through Biznik.

That, to me, is what Biznik is all about. It’s about making those connections, and collaborating with others.

I think the biggest one for me has been learning to let go of things. For example John is a much more talented web developer than I am. It’s tempting to keep doing things the way you’ve always done them. Since I used to write all the code, it’s tempting for me to think that I can continue to write all the code.

What I’ve learned by working with someone who is actually better at what I do than I am, it lets me step back and let go of that and say, “Wow, you’re amazing. You do that and now I’m going to be free to focus on something else.” Focusing more on how we’re going to build this business. I’m going to write a press release today and contact a journalist and all the other things that go with building a business.

So it’s allowed me to focus on other things, but that wasn’t an easy transition for me.

Well, it took me a long time to even sort of admit to myself that I needed to work with another developer because I think especially small business people have this kind of bootstrapping ethic of we can do it all ourselves. The key is to find other people to collaborate with because as good as you are at whatever it is that you do, you can’t be the best at everything.

Before I even talk about John or Nadia, I should really talk about Laura, my wife, because we never could have done this without each other. She is an indie business person as well, running her own photography business.

We both were relatively successful, independent of each other. Then when we met, we had no idea that we would be business partners. Then when we sort of accidentally got into doing this together, we quickly realized that actually I really am horrible at whole pieces of running a business.

For example, she’s much more organized than I am and she’s really good at pulling events together. My skills were in building the first version of the site and interacting at the events with all the attendees. Without each other to grow the way we’ve been, it just would have fallen apart. I would have gotten frustrated with the process of organizing events and would’ve stopped doing it and she would’ve never had the technology background to pull that piece together.

So working together and collaborating allowed us to get to the point where Nadia and John thought what we were doing was interesting enough to approach us and say, “Hey that’s really interesting.” Although actually I have to say it was the other way around. I actually asked John for coffee, but at the time I asked him he was already interested enough in Biznik to become a member and thought it was pretty cool.

I love working with my partner and it’s not something I would have ever imagined or chosen really. It’s just kind of evolved that way. And much to both of our surprise, we get along just fine. We don’t get tired of each other. And so the more that we’ve been together, the more that we find we like working together.

The biggest differentiator that we have of all is our laser like focus on indie business. We’re not the business networking group for everyone. We are the business networking group for independent people who are bootstrapping their business, trying to do a lot with a little and want to collaborate with other people who are doing the same things, and learn from other people who are doing the same things.

The second big differentiator is that every single thing that we’ve put into the Biznik web site has come from a perspective of openness. We really believe that we should be in the business of bringing people together, not holding them apart. So what you’ll notice on a lot of networking web sites is if as soon as you go past the front door, immediately you are confronted with a screen that says, “You have to log in to do that, ” or “You have to create an account to do that, ” or “You have to pay us money to do that.”

Our approach has been we’re going to make as much as we possibly can of the web site wide open. Not just because it makes sense, not just because it’s in the sphere of business networking, and bringing people together, but also, for a really key reason, which is we don’t want to lock out search engines. We want all of our content to be accessible to being indexed because that makes us more findable. And it’s really worked very well for us.

A massage therapist really doesn’t know that much about that kind of thing. It’s not their core thing and they just don’t care really. But they can benefit from it if they can just sort of walk in and have it. With Biznik, they don’t have to focus on that aspect of the service; we take care of it for them. I put a lot of effort and thought into how we could basically benefit our members the most, and one of the big ways was by getting them noticed on Google. Because a lot of indie business people don’t have the time or the interest in creating a web site that’s properly.

We want our members to be noticed and that’s a big differentiator. We don’t have the same kind of privacy issues that large networks like LinkedIn have to deal with. On LinkedIn, as many of their members don’t want to be found as do want to be found, because for example, they don’t want their boss to know that they’re looking for a job at some other company. So they have this complicated and really arcane permission system that I’ve never been able to figure out and I don’t think half of their members who use it have been able to figure it out.

We have a much simpler approach, which is on or off. So if you are inside Biznik and you want your privacy, you turn your profile off. If you want to be noticed, you turn it on and we go to work for you, making it noticeable.

Well, our goal is to take what we’ve done here in Seattle and do it in cities elsewhere. And our initial approach is to go into the creative class cities that were outlined in Richard Florida’s book “The Rise of the Creative Class.” It seems like logical targets are Austin, San Francisco, and New York.

Places that have large indie business populations. The last US Census figures showed that there are 27 million businesses in America. 20 million of them are what they call personal businesses, which are businesses of one person, someone who has started a business and has no payroll.

That’s our audience. Those are the people we want to empower through Biznik. Our goal is to make the service available similar to what we have done in Seattle and localize it into those communities.