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WikiHow's Recipe for Success

The so-called 'hybrid' company looks like a nonprofit, makes money like a business, and serves the community like a government.

Wikihow founder Jack Herrick

Courtesy of company

Wikihow Founder Jack Herrick working from his home.

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WikiHow is like Wikipedia, except it's for-profit and focused on offering instructions. Tens of thousands of people around the world write and edit step-by-step articles on how to do just about everything--open a locked car, make a 3D paper snowflake, get rid of fruit flies, and even sneak your cat to work (yes, there are instructions for letting the cat out of the bag). The website gets more than 40 million unique visitors every month, which is more worldwide traffic than Urban Dictionary, The Los Angeles Times and The Washington Post each garner.

WikiHow founder Jack Herrick has taken a decidedly different tack when it comes to building his business. WikiHow's 14 employees work out of a house in downtown Palo Alto, Calif., and the company is intentionally self-funded. On top of that, it's a media company where everyone owns its content.

A Hybrid Approach

WikiHow calls itself a "hybrid organization." The website explains that like a non-profit, it wants to benefit people; like a government, it is creating something for the public good; and like a business, it makes money.

It's an interesting concept and one that seems to work--wikiHow has been profitable for several years, Herrick says.

Wikia is another example. Created by Wikipedia founder Jimmy Wales, the for-profit collaborative content platform was listed by Nielsen last year as one of the top 10 social networks in the U.S.--it gets more than 50 million unique visitors per month and has more than 250,000 communities and more than 20 million pages.

Both Wikia and wikiHow make their money from ads.

Small and Self-Funded

Why a work in a house? Herrick says people can be more relaxed--and hence, creative--in a home environment as opposed to a cube farm. You'd also think it helps cut costs, considering Silicon Valley office space is some of the most expensive real estate on the planet.

As for funding, wikiHow refused several financing offers between 2005 and 2008, a time when Herrick says content companies were hot targets for VCs (now, not so much).

"In Silicon Valley I am a huge outlier in the fact that we're one of very few companies that has the ability to take venture financing and has refused it," Herrick says. "Bootstrapping... really forces you to invent your way out of problems rather than spend your way out of problems [and ] invent ways to grow rather than spend on ways to grow."

Herrick says a "large public Internet company" even offered to buy wikiHow, but he turned it down.

"Accepting the offer would have made me a lot of money, but money isn't everything. We get a lot of joy in continuously improving our ability to offer free how-to instructions to the world," he says.

Owned by Everyone

Another twist: Because wikiHow content is Creative Commons licensed it is "owned by everyone." Plus, anyone can download the software holding everything together because it's open-source and freely licensed under the General Public License.

The wikiHow site even proclaims:

Jack owns the servers, the domain name, trademarks, and some office supplies and furniture. That said... anyone has the right to "fork" wikiHow and move all the content and software to new servers and domain, so in some sense Jack owns almost nothing. Basically, Jack is the steward of the wikiHow community--as long as the community believes he is the best steward possible and acts in the interest of the community and the wikiHow mission.

Herrick's hope, of course, is that no one does it, and he believes they won't. In a Web 2.0 Expo interview, Herrick explained his philosophy:

People contribute to wikiHow because they are inspired by the mission of making the world's how-to manual. Yet every user knows that the web companies change business models frequently and occasionally trash community projects as a result. Giving users the right to fork creates the trust that all the hard work people put into wikiHow will always be owned in some form by the community.

Of course, user-generated content can be messy. Just look at the problems Amazon and Yelp have had with bogus reviews. Unlike Yahoo Answers, About.com, and eHow (which Herrick sold to Demand Media in 2006), wikiHow lets anybody edit articles, but uses multiple layers of quality assurance to try to make sure the changes are good ones.

So far, the model is working--give or take a few well-documented examples of inaccurate wikiHow pages. While it's bound to happen, Herrick says more often than not the company's transparency leads to high quality work.

Not to mention a solid business.

Last updated: Nov 8, 2012

CHRISTINA DESMARAIS is an Inc.com contributor who writes about the tech startup community, covering innovative ideas, news, and trends. Have a tip? Email her at christinadesmarais (at) live (dot) com.
@salubriousdish




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