What do you do when your startup is profitable and you're pulling a six-figure salary? If you're Scott DeLong, you try to cash out.
DeLong's intention to sell ViralNova, the viral news site known for its click-baiting headlines, was first reported by Business Insider earlier this week, which obtained a copy of his e-mail pitch to potential buyers. Scott argues in the missive that the site's low operating costs, ad revenue potential, and exceptional traffic--ViralNova drew more than 100 million visits in November--make it a good proposition.
But still, the move was a head-scratcher. Why would an entrepreneur, who built his company from the ground up, decide to give up now?
The Wire offered one reason: Facebook recently "cut back organic reach for pages" so more high-quality content would appear in the newsfeed, thereby pushing the viral stuff out. DeLong admitted the overnight success of his site, which he launched in mid-2013, smacked of a bubble in viral content. "This haunts me at night," he told The Wire. "The short answer is, I don't know."
To get the full story, I reached out to DeLong, who agreed to answer questions by e-mail. His comments suggest he might be an example of a unique type of entrepreneur who likes building things but not managing them once they achieve scale. He also had plenty to say about the decisions he made when he was building the company, as well as advice for new entrepreneurs. Here is the interview.
What compelled you to bootstrap the company in the beginning?
Scott DeLong: I have always done it this way. I've been creating, operating, and selling websites since the early 2000s. I've never hired a single employee and I've always kept the operation very lean, utilizing freelancers when necessary. I feel this is a better fit both from a business and personal standpoint.
Describe how you bootstrapped the company. What did you skimp on and where did you spend?
DeLong: It seems that ego tends to drive a lot of entrepreneurs. They want an office, they want employees, they want to feel like they're the real deal. But this is the Internet. There are thousands of high-quality freelancers around the world willing to work with you, and an office is absolutely not necessary in today's age. So I guess as far as "skimping" goes, I cut out all the unnecessary things that I consider ego-driven and focused on only spending money when it's absolutely necessary. When the site grows, you need more servers and more bandwidth. When one writer can't keep up with the amount of work, you contract another one to help with the load.
Why did you refuse to take outside investment for so long? Looking back, do you feel like you did the right thing?
DeLong: Yes, because I still own 100 percent of the business and I answer to no one. There's no one breathing down my neck or questioning my decisions. It allows for a faster, more efficient operation.
I also didn't take any outside investment because, honestly, what would I do with it? The site is profitable. I could open an office and hire several people tomorrow without taking a dime from investors.
According to the e-mail obtained by Business Insider, you had more than 100 million visits in December and generate "well into six figures of revenue" per month. With things going so well, why not expand into an office and start hiring? Is there something about management that rubs you the wrong way?
DeLong: This is the question I get asked so often because it seems like a no-brainer to the media. But the truth is pretty simple: that isn't what I want to do with my life. I worked hard to get out of a nine-to-five scenario, so it makes very little sense to me to fall right back into that. Except this time all of the pressure is on me. All of the employees' livelihoods are on me. There's a lot more to life than work and money.
What made you decide to sell the startup? Do you have any attachment to it or do you feel it would be better expanded by someone else?
DeLong: This is just a feeling-out phase. If nothing significant comes through by the end of January, I'll try to better optimize the business end of things and keep running it. Given that similar-sized sites have anywhere from 30 to 100-plus employees, this would be better suited in the hands of a team. As far as attachment goes, I'm happy with the success, but business is business. I've never looked back after an acquisition.
Where do you go from here?
DeLong: Anywhere that computers are outlawed. For a while, anyway.
Looking back on everything, especially bootstrapping, what advice would you give to entrepreneurs just starting out?
DeLong: The Internet has changed everything for entrepreneurs. Individuals can now compete with corporations and there's really no limit to what we can create and do. Use others for inspiration, but always find your own style and your own approaches. Fine-tune absolutely everything. Stop spending time looking for that one 1,000 percent change and focus on making one thousand 1 percent changes.
Live and breathe your business--despite the promises, there's no such thing as easy money. Never be lazy, not even for a second. If you are, in that second, one of your competitors just got an extra step on you.
Do you have any regrets about the way things were handled at ViralNova?
DeLong: No regrets. It's been an exciting and stressful ride so far.
What are your hopes for the site? What kind of buyer would you like it to have?
DeLong: Like my previous sales, I want to see ViralNova not only continue to do well but flourish. So many people assume when you want to sell a site, it's because you fear the end is near. I've never done that and never will. January has been the strongest month yet, but when your business doesn't align with your personal goals ... then you have nothing.
I'm open to any potential buyers as long as they have an open mind and the right people in place to learn the "system" the best they possibly can. Ideally, a business already doing similar things would be the perfect buyer.