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I Launched My First Business 16 Years Ago. Here’s How Things Have Changed

Germany, Frankfort Main: The turn of the millennium. Three ferris wheels symbolizing the year 2000Germany, Frankfort Main: The turn of the millennium. Three ferris wheels symbolizing the year 2000
(GERMANY OUT) Germany, Frankfort Main: The turn of the millennium. Three ferris wheels symbolizing the year 2000 (Photo by Seitz/ullstein bild via Getty Images)ullstein bild ullstein bild via Getty Images

Looking at pictures of myself when I started Beliefnet.com, a sprawling religion and spirituality website of an earlier era, I think: “Hey, that doesn’t seem like that long ago. I had fewer gray hairs but I am, at least, recognizable to the naked eye.”

But it sure does seem like an eternity has passed when I remember that at launch, in 2000, Facebook didn’t exist. Nor did YouTube, camera phones, iTunes, the cloud, Twitter, Gmail, Dropbox, the iPhone, Ruby on Rails, emojis, LinkedIn, usable videoconferencing, Instagram, or viral videos of kangaroos boxing.

Today, I’m doing another startup. This sometimes gets me labeled as a “serial entrepreneur” which suggests that I spit out companies every few months by a finely-honed formula. The truth is, the changes between web 1.0 and now seem almost as jarring as the differences between digital and non-digital did back then.

Some background: It was 1998 when I surprised friends and terrified family by leaving my career as a newsmagazine journalist to start a website about the impossibly controversial topic of religion and spirituality. The site now doesn’t much resemble what we built, but in its day, Beliefnet was the market leader, reaching about 12 million people daily. We won the National Magazine Award for website excellence before being sold to News Corp in 2007. My new startup, LifePosts.com, is an online and mobile platform for people to remember and celebrate the most important people and life milestones, specifically memorials, anniversaries, and other commemorations.

It’s still early, but so far here’s how the experiences compare:

The Closet vs. the Cloud– The scale and complexity of the two sites are similar. Yet Beliefnet cost about a million dollars to design and build – LifePosts will cost about a quarter of that. More importantly, the ongoing tech costs for LifePosts will be about 10% that of Beliefnet. That’s due primarily to the invention of cloud-based storage, which enables me to eliminate the cost of buying, running and air conditioning the servers in that grim, closet-and-tech room.

One thing that has remained annoyingly similar: the shortage of good web developers nearby. Even though there are many more of them out there, the supply has not kept up with needs of entrepreneurs. As a result, we rely on talented, but distant, developers in Pakistan, India, and Brazil.

Angels and Unicorns – Beliefnet was launched with a $5 million check from a single venture capital firm, before the site was even built. Nowadays, venture capital firms (at least in my experience so far) typically expect sites to actually exist (go figure) before they dive in. LifePosts’ initial funding (under a million dollars) came mostly in $25,000 increments from individual angel investors – a class of people that is larger and better organized than it was in 2000. Last time, our office was in Silicon Alley; this time it is in my dining room.

Venture capitalists argue that this is a better system, as it forces companies to prove themselves before money is invested. What they really mean is it’s better for venture capitalists … which is fair, as their business objective is to increase portfolio value. However, I’m not sure this increases the odds of success for each entrepreneur. We now have to make pennies stretch further in part by hiring fewer people, giving away more equity sooner, launching with less runway before cash runs out and having less margin for error. The new system reduces risk for funders by increasing risk for entrepreneurs. To reflect that risk, my angel investors got a better valuation than the VCs did in 1999.

 

Words vs. Pictures – At Beliefnet, we solicited user photos from day one. But truth is, not many readers did it, as the process was arduous. To contribute to a Craziest Christmas Ornaments feature, they might have to take a print, go to the camera store to scan it on to a CD, and upload it. Of course, the ease with which we can now snap and share images has enabled a revolution in personal storytelling that has, in turn, fueled the web’s growth for a decade. And it will be at the heart of LifePosts. Think about the newspaper death notice and how, well, lifeless it is, and you’ll quickly realize the need for modern digital storytelling tools to be at long last applied to commemorations.

LifePosts is making a bet on a heavy topic: life and death. While our emphasis is on celebrating people’s life stories, there’s no getting around the fact that millions of our users will be people who have suffered a significant loss.

I’m gambling again that while the topic might not be sexy, it is at least profound, and there’s a gaping unmet need.

Certainly, some parts of the experience feel familiar: the thrill of inventing something new, fear of humiliation and the cold sweats produced by financial uncertainty.

But in many ways, I’m doing this for the first time. And that’s a good thing—for being an entrepreneur is about both learning from the past and rejecting it. Old companies fail when they either cling pigheadedly to the old ways, but new companies can fail when they assume that “disruption” means ignoring previously-discovered wisdom. The trick is discerning when to use the old molds and when to break them.

– Steven Waldman is the founder of LifePosts.com, an online platform that commemorates life milestones.