Our Back-Door Sell
Friday, March 8, 2002 by Dave Winer.
Good morning! 
A quick catch-up. Thousands of people are using our new Radio 8 software. They're writing weblogs and aggregating news. Exploring, questioning, learning, teaching, documenting, finding, innovating. It's a community. It's two-way.
And get this, they're using XML -- a geeky thing that can work for users, if it's not in their way. Many of them ignore it, and that's totally okay, but some are busy using our DIY Web Services platform to create their own magic. Geeks, writers, designers, educators, librarians, business people, there's something for everyone.
Radio Community Server
At the heart of the Radio community is a "community server" -- not unlike the one Groove Networks has for its users, or the one Microsoft plans called My Services (formerly known as Hailstorm).
Our centralized software is built on open formats and protocols and will be licensed as a commercial product, for less than $1K per network per year. The product, Radio Community Server, will ship on Monday, next week, Murphy-willing, for Windows NT, 2000, XP and Macintosh OS X.
The business model
It's a simple understandable (I hope) business model.
Our revenue goals are more modest than our larger competitors, and they can be because we don't have their overhead. With Radio at $39.95 per user, and Manila at $899 per server, and the community server at $XXX, I think we'll do pretty well. It's a basic time-proven business model. Sell boxes at a profitable price.
A loopback to the pre-boom software business model. Developers creating products for people and workgroups, this time using the networking technology popularized by the Internet, but otherwise seeing users as customers, not eyeballs, and insisting that technology has a pricetag, like all products that do what customers want them to do.
Back-door sell
We've had a lot of discussions about whether we're a front-door or back-door sell, and we're decidedly a back-door sell. Our product is designed for users; they create the pull, they have the applications. As with personal computers, two generations ago, our application is not on the radar of many IT managers in corporations. It's starting to show up, and we will have an offer for them. But first we want the hearts and minds of users, and propose to win them by giving them power they can use today, not someday in the future.
Further, by using open formats and protocols we're inviting competition, knowing that users move faster if they don't feel locked in. We're confident that we have a sustainable multi-year lead in this area.
Like everything, and nothing
First the normal disclaimer, what we're doing is like everything that's come before. Mail lists, instant messaging, search engines, the Web, etc.
At the same time it's like nothing that's come before, because technology has moved forward. A $2K machine today is over 1Ghz with 500MB of RAM, and has a good network connection. At the same time, users have moved forward, they're ready for something new. I'm sure that the dotcom bubble was created totally by user excitement about new technology. It crashed when we ran out of ideas that stimulated the minds of the users with money.
There's nothing terribly wrong with the economy, says Greenspan, unemployment is down, things are getting better in the economy at large. All that's in the way of tech participating in the recovery are some new exciting ideas. We have a few of those coming down the pike. Seeya soon!
Dave Winer
PS: DIY stands for Do It Yourself.