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Biznik’s Story

When Biznik was launched in May 2005, the term “social media” didn’t exist. Facebook hit the interwebs six months later in November 2005. Twitter was born in 2006. The iPhone? It’s hard to imagine the world without it prior to June 29, 2007. In 2005 LinkedIn was a database for recruiters. Users could post a profile with their job history but it was another year or more before they could also add their photo to their profile, and many more years before LinkedIn launched discussion forums, groups, and events. Social Networking was a new frontier.

A few social networks existed. Many remember that MySpace came before Facebook. But before MySpace some of us were using the Friendster and Tribe.net social networks to keep track of our friends.

As independent business owners, Dan McComb and I knew the importance of meeting and networking with other business owners and we were disappointed that no one had created a social networking site specifically for small business. We decided to create our own with one caveat—it wouldn’t suck.

Something that sucks can be defined broadly but Biznik’s tagline—Business Networking That Doesn’t Suck—was a direct response to our experiences at conservative Chamber of Commerce events, and inside referral-passing business networking groups that met once a week with the sole purpose of passing forced referrals, who started their meetings with the Pledge of Allegiance, and would fine you $0.25 if you forgot to wear your name badge.

Biznik’s tagline ended up working as a filter in our favor. The community that sprouted was made up predominately of progressive independent small business owners who wanted to meet and do business with like-minded business owners on their own terms. To get the full flavor or our mission, read the Biznik Manifesto.

FOUR TENETS OF THE COMMUNITY

Four key community-minded tenets were put into place to preserve the integrity of our culture.

Online platform support Offline interactions

Long before the term OTO (Online to Offline) became popular, Biznik built a platform that geolocated user profiles and events with an emphasis on meeting face to face and using the Biznik.com site to strengthen relationships people had formed in the real world. Users were actively encouraged to step away from the computer and meet each other.

95/5 Rule

Simply put, Biznik was a place to network and share resources, not sell ones services to one another. Therefore 95% of all content on the site and at events—from articles, to forum posts, to the content of educational events—had to be helpful and relevant to small business. Self promotion of all kinds was limited to 5%. This meant if you were Marketing Consulting who was providing a 90-minute workshop on SEO tricks, with eye towards introducing yourself and your services to the community, the amount of time spent focused on you and your unique offering should not exceed 5 minutes.

No MLM Policy

Biznik was a strict MLM-free zone. Multi-level Marketing businesses have a way of poisoning a community and we weren’t going to let that happen to Biznik.

The success of an MLM representative is dependent on them building an ever-expanding “downline” of sellers from whom they earn a percentage of sales. Very few MLM representatives can sell enough of the company’s actual product to support their efforts, thus the focus of their networking was recruiting resellers to join their ranks. This drive to convert people to their business flew in the face of the majority of the people who came to Biznik events who already owned and were busy operating a business. The last thing they needed was a pitch on why they should join someone else’s business.

No place for avatars and screen names

Biznik was a community of people who’s purpose was to do business with one another. Business is built on a foundation of trust, therefore we banned fake names, screen names, and avatars. If you could not use your real name or were not interested in uploading a real photo of yourself, Biznik was not the place for you.

REAL PEOPLE ONLY

As Biznik grew we encountered growing pains related to quality over quantity. There was the signal to noise ratio to consider, as well as ensuring that events promoted as “Biznik-endorsed,” and articles we featured on the site, matched our high standards for quality and relevance.

Policing the new profiles in search of MLMs and fake profiles created by trolls or bots required concerted effort.

We built algorithms that scoured for violations in the real names, real photos, and MLMs. We had systems in place that rooted out the profiles that were created by reputation-management companies on behalf of clients who had no intention of ever coming to Biznik.com and interacting with other members.

It’s difficult to say exactly how many profiles we manually removed over the course of ten years because many were deleted before they completed a two-step verification process that assigned a unique membership value, but I don’t believe it would be an exaggeration to say that Biznik’s database would have had 1 million user accounts in 2014, instead of the 115,000, if we had kept every new account that had been created.

WHAT WENT WRONG

While hindsight may be 20/20 it’s still impossible to point to any one thing or even a smattering of things and say definitely what caused users to lose interest in Biznik.

Some say Biznik came a little too early before users fully understood how to use and leverage a social networking site.

Others point to the fact that Biznik was self funded and never produced enough revenue in the early years to launch some of the initiatives that could have led to rapid growth and broad adoption. Just as Biznik started hitting its stride in 2009 and membership growth and revenue was steadily increasing, the economy fell and the well of Angel investment that could have helped launch Biznik is the ten cities where it had a foothold, dried up.

We also can’t ignore the significant blow delivered to the founding team in 2009. Biznik was founded by my husband, Dan and I. And while we enjoyed spending 23-hours a day together for the first three years, by the fourth year we arrived at a fork in the road. We decided to stay married, which meant one of us had to leave Biznik. Dan took the fall and his departure was both sudden and all-encompassing.

In the wake of Dan’s leaving, innovation came to a grinding halt. After the dust had settled, I learned that I was sitting on a custom platform with an aging codebase that severely limited the amount of functionality we could improve and add to.

All businesses struggle with dividing efforts, attention and resources between acquisition of new users, and the retention (and conversion to a paid level) of existing users. Biznik’s core team was never larger than four—Dan and myself, our CTO, and our Community Director. Now we were down to three. This struggle between acquisition and retention was particuarly keen in 2009 when sites like Facebook were pouring millions of dollars into new features including a mobile platform. Before long many die-hard users and would-be “Bizniks” alike found that they could get their needs met elsewhere.

I think all those of things played a part but that it’s important to look at our user base and monetization strategy as well. Biznik was virtually ad-free until the end. We had a freemium membership model and over 90% of our revenue was generated from membership dues. We took pride is delivery curated content on a platform that was ad-free and spam-free.

Biznik’s core audience was made up of small business owners. This is the largest segment of business owners in the country. According to the US Census, 4 out of 5 business in the U.S. are solo-run companies—businesses run by one person with no employees. This segment is also notorious for having trouble staying in business. Depending on how you slice it, some experts estimate that 50% of small businesses fold within the first three years.

These businesses (with the exception of MLMs) matched our definition of “Bizniks.” The majority of Biznik users provided a service and were earning less than $100,000 in gross revenue. Working for themselves, they understood the value of networking with their peers but they were busy. These business owners do their own marketing, their own bookkeeping, and their own tech support, in addition to providing the service or product they are in business for. They schedule the company Tweets, update the web site, generate the customer invoices, and are the only ones in their company who follow up with clients who don’t pay. They are processing new client intake forms while they’re filing their taxes, all while trying to get their printer to start working again or problem-solving why their internet connection is down.

Business networking is important, but unless it is crystal clear that the effort leads directly to paying customers, it may need to wait until tomorrow. Tomorrow becomes six weeks, then six months, and pretty soon it’s something they don’t get around to until business is slow and they need more clients. When polled, most users said they felt Biznik was a bargain at $10/month but if they weren’t actively using it or getting clients from it, they couldn’t justify paying for it.

WHAT IS AN “ENTREPRENEUR?”

Aside from being too busy to network, we discovered something else about small business owners that posed a challenge. In a survey, when provided with a list of terms they most identified with, from “self employed” to “independent contractor,” “small business owner” to “entrepreneur,” the mass majority of Biznik’s users self-selected the label entrepreneur. They didn’t realize that in broad stroaks, this wasn’t actually true.

In traditional terms, an entrepreneur is someone who’s business is bigger than themselves. They often rely on a team, have a strategy to grow their company, seek outside investment or capital, and when asked can identify an exit strategy.

When compared to traditioally-defined entreprenerus, small business owners are not entrepreneurs, and they behave the opposite of an entrepreneur.

Marketing consultants, freelance designers, real estate brokers, and life coaches; wedding photographers, event planners, boutique attorneys, and alternative health practitioners. A small business owner is an emodiment of their business. They work in isolation with a few professionals they hire on occasion, such as a CPA, a web site designer, and a lawyer. They have no growth strategy, in fact many cannot grow their company much larger than it’s current size because there simply aren’t enough hours in the day for them to perform the services they market. They rarely use outside money or capital and they have no exit strategy. When thought of in terms of self-employment, most desire to remain self-employed until the end of their professional life. Some supplement their business earnings or take a break from their businesses occasionally, and get a j-o-b.

For all intents and purposes these business owners created a job for themselves. Analysts refer to the as “lifestyle” businesses. Try using that term on someone who pours everything into their business, at great risk to their security; someone who puts their clients and customers above all else to the degree that an MBA-grad might question if there’s sounds business-sense behind some of their decisions. See what kind of reaction you get.

Where this became a problem for Biznik was is marketing and outreach. We provided a niched platform with a custom set of functionality designed to meet the unique needs of a customer base who couldn’t find us because they weren’t searching for a community of self-employed, small business owners, freelancers or independent contractors—they were searching for a community for entrepreneurs.

And when we marketed Biznik as a community for entrepreneurs we attracted a fair number of angry bloggers who were quick to point out that Biznik provided none of the networking or resources “real” entrepreneurs needed to help them find a board of advisors, recruit new team members, or attract investment capital.

THINGS WE TRIED…

Despite the challenges we faced with our chosen user base, we persevered. Not only did I identify with the “Biznik” persona—someone who’s business is an extension of their self expression—but I also wanted to attack that statistic that said 50% of businesses were failing in their first three years of business. At the root of it, I had too strong of a passion for small business to give up without a fight.

We launched dozens of new products over the years. A smattering of my favorite includes:

Biznik Pods
Affinity groups of 6 to 8 people with the sole purpose of providing accountability and support. Participants were matched by experience, interests and needs. We provided a 6-week initiation for them to establish a foundation for their pod, then continued to support them after the pods were launched.

Ambassadors
Volunteers in cities outside Seattle (Biznik’s home) were provided featured placement on the site, and free advertising in the weekly mailings, in exchange for agreeing to be available to new members in their area. We asked them to be responsible for getting two Biznik events in the calendar each month, be it a coffee-chat at a local Starbucks, or a casual gathering during happy hour at a nearby pub. At it’s height we had 52 active Ambassadors in 24 cities.

Welcome Team
Each profile that was created on Biznik went into a queue and volunteers who wanted to greet the new members could apply to be a part of the Welcome Team. In addition to a personalized message from Biznik’s Community Director, volunteer “greeters” sent a personalized message to every new account holder within 72 hours of their account being created. Inside the U.S. the majority of the greeters were within 100 miles of the new user.

SHINE
In 2009 Biznik produced a 24-minute short film called SHINE: The Entrepreneur’s Journey. In an effort to find a commonality between small business owners and the more traditional entrepreneurs, we interviewed over 400 subjects to discover what it is that drives them. (Watch SHINE online.)

The end of free membership
In 2012, we took drastic measures and ended “free membership.” Unpaid accounts and new accounts were given drastically reduced profiles without the famous Biznik SEO lift, and were prohibited from initiating content on the site—they could RSVP for an event, but creating a new event, publishing an article, starting a new discussion, adding a comment, and joining a group required a paid membership that started at $6/month. (Summarized in the 2012 press release that announced the change.)

At the time there was a lot of discussion about the future of free social platforms. (There’s still a fair amount whenever Twitter’s revenue is held up next to its market valuation.) This 2010 post by Ruben Gamez founder of Bidsketch, called Why Free Plans Don’t Work played a significant role in our decision.

As a business model, we found most of what Ruben said to be true. The larger your free user-base grows, the more people will require support that no one’s paying for. Mix that together with our goal to not only keep the site ad-free, but our commitment to never sell our user data to an affiliate, and somekind of change was imminent. But it wasn’t just that the revenue model wasn’t working, we also discovered that a free plan adds noise to the relevant content and contributions, and ultimately dilutes the value of the community.

In 2012 we anticipated a future where pay-to-play online communities would become the norm for the simple reason that it provides a more valuable environment because it permits more resources to be applied to supporting the customers who are paying for the service. That future has yet to arrive.

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I’m proud of Biznik’s accomplishments. Biznik won international recognition in 2008 in the form of a Webby Award for Social Networking and was featured in some great reports by Forbes magazine and National Public Radio. Greater than the awards and media attention were the stories from members about the impact Biznik had on their business and on their lives. “I can’t tell you how much Biznik has meant to my business as a consultant,” member Steve MacDonald wrote to me quite simply. “I don’t think I could’ve done it without Biznik and that’s not a warm fuzzy, that’s a cold hard fact.”

I’m often asked if I would launch Biznik.com today, knowing what I now know. If we’re talking about the custom social media software, building a social platform is infinitely less complicated today than it was a decade ago, and may be entirely unnecessary in light of the plethora of platforms that can be leveraged. If we’re talking about the development and management of a niched community, I’d ask if there’s a reason to scale beyond a single city or put effort into supporting customers outside an urban center. The truth is, I’m not sure. So many things are different today in 2015 than they were in 2005. If I did launch a niched social networking platform for independent workers and entrepreneurial-minded business owners, I’d take a very different approach. You’ll have to get me on the phone if you want to hear more. But do I believe there’s still a real need for a platform or service that facilities small business owners in helping each other stay and thrive in business? Yes, I do.

I started to explore a new angle in the form of a Network Relationship Management platform (currently hibernating) that I named MyFive. While I may be taking a break from actively seeking a way to help small business owners thrive, I still feel strongly that they need as much support as they can get. I will always have a soft-spot in my heart for them, so please reach out if you’re working on something you think is related to Biznik and you’d like to bounce some ideas off me. My experience, expertise and insights may be helpful and I’m eager to share them.

Lara Feltin, Founder & CEO
2015

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Also see…

Tour of Biznik

Selection of screenshots of the site

The Biznik Manifesto

The Biznik Way