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Interview with Ben Elowitz, CEO of Wetpaint

Ben Elowitz, serial entrepreneur shares how Wetpaint, his latest venture, has reached over 450,000 user created sites and the secret to his success (hint: focus on the customer).

Interview conducted by Nathan C. Kaiser on Monday, August 6, 2007 in Seattle, WA.

Ben, would you mind giving us an introduction to Wetpaint?

Wetpaint powers community sites. It brings together the best of wikis and social networks, blogs, and message board technologies. The idea is that if you get a lot of people contributing to a site about a topic that people are passionate about, they can read the best information, meet one another, have a great conversation online, as well as build a great website.
What is the need that Wetpaint is serving within your consumer base?
Social networks have made it a little bit easier to connect, but if you look at the idea of communities really exchanging in dialogue, that hasn’t gotten any easier since the message board started ten plus years ago.

What we found is that people are looking for a way to have a better connection, a better way to build new information online. Some of the newer technologies, like wikis, have helped move in that direction. The only trouble is wikis started out being written for technical people. Ordinary people have a really hard time using them. We make it much easier to engage with other people who share your interests online.

It’s about larger groups of people and about engagement with others.

It’s about sharing information and connecting. Getting to know people — exchanging — getting help for things on your mind. It can be about anything from something as light as a car club for people who have the same model of car to as important as a health condition that they might share.
There have been a number of changes in the overall marketplace that enable this type of service to be successful.

What, from a technology perspective enables this type of business model to be a success?

I think a couple things have happened. One, for ordinary consumers, they’re so much more interested, ready, and willing to participate online. That means that you have people every day who want to use a service like this.

We’ve only been up and running about a year, and we’ve seen over 450,000 people create their own website with Wetpaint. That helps a lot because there’s so much more demand, because of the higher participation.

The second big thing is that there’s a way to monetize this now with advertising revenues, so the consumers don’t have to pay a subscription fee. A subscription fee can be such an impediment to creating a site like this. Because we’re able to offer it for free, we see so many people bringing up new sites every day.

The last thing is that we’re also seeing, from some larger companies, that to better connect with their consumers online. Those larger companies see it as a strategic priority to bring consumers into a conversation using Wetpaint and similar services.

Creating an identity around that brand, and having a community coalesce around it?
We see sites like CBS, for example, with the CSI TV show bring a site powered by Wetpaint to organize its CSI fan community. Or T-Mobile who makes the Sidekick telephone has Sidekick owners online in the Sidekick community powered by Wetpaint.
What do you see as the overall market potential for this type of service?
I think it’s extremely large, because if you look at the range of topics that people can create a site about, it’s practically unlimited. I think you’re seeing that today already in the number of social networks and social network groups and the number of message boards that are out there. We’ve already seen it with 450,000 sites in just a year.

The number of topics is, frankly, high. What we’re also seeing is that a lot of people are coming online in order to join a site that is already up and running and help make those sites bigger. It’s getting even larger with the ability to create your own private site, so that if you have a group of friends who want to coordinate. Maybe a sports team or an event, you can create a private site, now.

So what we keep saying is that there are so many applications where people are looking to collaborate online, my making it easier to collaborate, the volume has been astoundingly high.

The real opportunity is branching out to a larger mainstream audience. The people who, for better or for worse, have historically been with AOL and others services.

Has Wetpaint started to transition into that larger demographic?

We really have. When we started out, we decided that we were going to break one of the existing rules. Until now, it had been that sites using wikis technology had been designed for people who knew what a wiki was. That’s a relatively small percentage of online users that really has that technology background. So we designed the site for anyone to be able to start or contribute to.

As a result, we’ve seen that our top categories are things like entertainment. We see sport sites. We see music sites, and there’s really a very clean green sections of interests that people are collaborating online with.

The technology is powered by wiki, but you specialize in the ease of use.

That’s exactly right. What we try to do is make it easy to connect with other people and build and exchange information online. To do that, we leverage lots of the wiki technology, but also some of the social networking. For example, it’s very, very important to get to know other people, who are on the site with you and to be able to manage who you can invite and know on the site.

Some other ways we find that it’s really helpful to let people have authorships the way they can on a blog, and have the dialogues that they can have on the message boards. So we really bring all those together. It’s almost like if you take web publishing, but you move it from something that you have to be a professional to do, and you make it easy enough for anybody to take part in.

What would you say are some of the most interesting applications that people are using Wetpaint to achieve?
I love to see the fan types that people create. They create them for teams, athletes, TV shows, movie stars, musicians and many more. That’s probably one of the most interesting because they really love sharing their passions. I’d say another neat category is that we’ve seen the gamers, people who play online games, collaborating online and building their skills and exchanging information with them.

And then now with the types of wikis that we’ve just announced where we really let anyone have a wiki, we’re even seeing departments within companies creating a website just to be able to exchange information on the site.

What are most of the sites being used for?
When we look at it the entertainment area especially is the one with the most traffic. I’d add technology and games and music, but there’s so many and it’s such a diverse set of applications that people are using already, that there’s no one thing. In fact, what we find is that even across the board, is that making it easy to collaborate, means people are expressing themselves and connecting about all kinds of topics that used to be really difficult.
What is your favorite community or Wetpaint?
Well, we have been very active on a site that American Express Publishing published, called “Executive Travel Magazine,” and that’s because I’ve been traveling so much. But it’s a site where people are exchanging travel tips and staying up to date on destinations, and pointing out how to kind of manage the hectic lifestyle of the busy summer travel season.
Relying on advertising means you need to get to the scale in order to support ongoing business objectives and costs. Are you currently at that scale? Are you profitable and if not, when do you expect to be so, if you can share?

We’re still investing in the business. What we’ve been finding is that advertising is actually a very viable way for us to make this service free for consumers, and to support it. So it’s been super helpful to let us sort of drive so much as options from consumers. So, so far, so good.

What is the purpose of creating the private sites for all users?
The idea is to let people collaborate however they’d like to. Sometimes it’s in a public forum that you want to exchange information and build a site for the entire world to see and share your passions. Sometimes, on the other hand, it might be a closed group that you really want to exchange information with.

For example, a lot of moms like to exchange information with other moms and they have mom websites looking for those resources from one another. But they like to have their personal information on the site, and once you put personal information on they don’t want it to be public anymore.

What we’ve found is that the number one most requested feature from Wetpaint over the last couple of months, is private sites. So we made it possible now where only people who are invited can log in and see that kind of information.

I could see potentially more businesses using the private wikis or the private Wetpaint sites to host internal discussions.
Yes, we are absolutely seeing that. We’re seeing organizations and businesses, particularly departments where they can’t get resources from an IT group. They say, “Well, the stuff that I want to collaborate on. I’d like to be able to work with my colleagues, and to have a private workspace. I can do that for free now without having to get the IT department involved. And so, I’ll go to Wetpaint and set up a free private wiki.”
What other types of revenue models could you incorporate, including premium services, or set up fees and others?
We’ve tried to make a lot of the things that other folks charge for available for free to our users. So, if you have a domain name you’d like to put onto your site, you can actually do that for free at Wetpaint. If you want to customize the look and feel, there are 24 different style templates you can choose from. You can put in a logo with a header, and so on.

We’ve really tried to make a lot of those things that other people consider premium services available just as part of the free package.

One thing that we do that might be of interest here, in addition, is that we work with the companies that I mentioned. For example, media companies and electronic manufacturers are interested in other offerings. For them, we have a separate organization offering, where when they really want to get the word out about their product and build a community, we can help them do that.

You work with them to build kind of an extension of their own brand, but offering it to your online community, and offering it to the overall Internet community as a whole.
Companies such as American Express Publishing, Meredith Publishing, PBS, T-Mobile, etc. definitely need to engage with their consumers online and we enable them to do that.

What they’re finding is that by building a collaborative website, they’re getting their consumers engaged with all types of content. We’ll share advertising revenues with those partners, we’re finding that they’re able to solve a real problem that they have, which is how to create more advertising inventory and make more money.

I’d like to transition a little bit to your experience as an entrepreneur. You worked at Fat Brain, co-founder of BlueNile, and co-founder of Wetpaint. What are some of the insights, or key lessons that you’ve learned through your experiences that you are implementing at Wetpaint as an entrepreneur?
I think one thing is coming across in every business that I’ve been a part of, is simply that the consumer experience is extremely important to your success. That’s something that we focus on intently at each one of those companies. At BlueNile, for example, the idea of buying diamonds online is a scary proposition to a lot of folks in 1999.

We really dug down into what the consumer wanted and then designed a website and a product experience that really made it comfortable, and in fact reassuring.

With Wetpaint, it’s a different challenge. It’s a space that consumers traditionally have found intimidating to contribute to a website. While our friends are helping us there, because we’re all getting so much more comfortable, we really designed a user experience that removes the fear and uncertainty that people have historically dealt with at other sites. We want it to be as easy as possible for people to create their own site.

What are some of the key missteps that you see entrepreneurs making, and you feel that they don’t necessarily need to make?
One of the key issues that entrepreneurs face is paying attention to what they want, versus what the customer actually needs.

It’s pretty hard to get customers to adopt a service that’s all about your agenda. So, instead, we always make sure that when we have those types of calls we’re looking long and hard at what the consumer wants. What our customers need. From there we make the changes that our customers will value.

What are the key types of employees or co-workers that you like to bring on to Wetpaint?
It’s an amazing team that I’m very privilege to work with. A key trait is that these folks have been around the block and know what they are doing. They aren’t guessing, but instead are working from experience.

Number two is that they’re focused on valuing the consumer experience. That’s so important at all levels, really. They understand what’s important to our customer.

Number three is that we have such a talented group, and we believe in having very high standards, so we look for people who are really experts at what they do. Then we’re able to trust the expertise that each one of us brings to the team, and work extraordinarily well with them.

What is your long term outlook for Wetpaint?
I think Wetpaint has an enormous opportunity, not only as a company but also to help consumers collaborate better online and connect to other people who share their interests.
Do you see Wetpaint remaining independent or being acquired?
Interesting that it’s the same question, in this Web 2.0 world, that people love to ask. My answer is always the same. We focus really hard on building the business and building a great service for consumers. We’re less focused on what happens as a result of that, because great things will happen.

We really do look first at what we’re doing to help our users. From there, the rest should take care of itself.

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