More Bootstrapping: VirtualTourist.com Co-Founder J.R. Johnson (Part 3)

SM: What was your plan for monetizing the site? How did you do it?

JJ: During that time I convinced GoTo.com, which later became Overture.com, to allow us to take their paid links and put them into our content. I made the argument that a user who had to click six times to get down to our London page was a better advertising target than someone typing in “London hotels”.

The irony of it all is how Google has made such a huge success of it with their business. GoTo was on a very different track. It is funny, looking back, how successful Google has been and how GoTo fell flat because they would not let people take their paid links and put them into content. I finally convinced them to do that, and we started making a little money. Advertisers started coming back after the bubble burst, this was in late 2001. In 2002 we actually started making enough money to pay ourselves.

SM: How much traffic did you have when you started making money?

JJ: I don’t even remember what the number was. The site always had decent traffic because it was a very old URL. That was something that Google weighed very heavily in their algorithm in the early days. The site had decent traffic.

SM: You got organic traffic because of the URL name?

JJ: Yes. As soon as we started putting in user-generated content we picked up even more SEO, which brought in more members who contributed more, thus helping our SEO even further. This was a real positive snowball. We always knew that in the worst-case scenario we could go into cockroach mode and just hide out in the dark for a while and let the content grow. The more content we had, the more people we would get, and the more valuable the company would become. The one thing we did right was pick the correct business model, a model that was able to sustain itself on very low investment. As long as we kept the server plugged in, it was able to grow.

SM: How did you sell ads? Did you have your own ad sales force?

JJ: We did not have our own sales force until late 2002. It was some small network stuff and a lot of Overture links. When Google came on and started doing it, we swapped them out. Early on we only got a very small percentage of the revenue share, but now it has swung completely in the opposite direction. What we were giving GoTo at the time is what we are getting from Google now. Having another player in the space has been very favorable to publishers.

[On life as a bootstrapper…] we had a Coffee Bean down the street, and they had a punch card program: if you purchase 12 coffees you could get another one free. These things were like gold to us. The Coffee Bean was our one indulgence during the day. We would go buy the cheapest coffee they had and load it up with sugar and milk, sit there and have our coffee. We would save these punch cards and when we got the twelfth punch we would order the extra large, ice blended coffee with an extra shot of espresso. It was a $6-$7 drink by the time we were done with it. These pink cards became like gold to us. My partner Tilman had a card that had 12 punches, and he left it in his pants when he put them in the wash. He was so bummed that he sat there and took these little pieces of paper, pieced them together, then took Scotch tape and taped it all together so it looked like a laminated card. That is how desperate we were.

SM: Take that story and then look at how much AdSense gives publishers, and it is not very much. Even when you made the switch from Overture, you cannot have gained that much.

JJ: We did not have a ton of traffic when we made the switch, but for us it was more money than what we had been making. I don’t recall the numbers off the top of my head, but it was enough to get a real office and start getting some salary.

SM: You must have had millions of visitors to do that, right?

JJ: I think we were right at 1 million unique visitors a month at the time.

This segment is part 3 in the series : More Bootstrapping: VirtualTourist.com Co-Founder J.R. Johnson
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