• Being blind-sided by a competitive threat, whether it’s an actual competitor, or market change.
• Having a competitor out-execute us.
• Market change that will dry up revenues quicker than we can change our model.
• Hitting an invisible ceiling on growth, where our method just stops having any impact.
• Missing the signs of employee apathy
• Saying something really stupid in public
• Taking our community granted (by myself or by the team)
• Not planning or testing enough for a change.
• Planning for too long and taking too long to change.
• Being stuck in a paradox of contradictions

Well, that’s not the full list. But I didn’t want to put you to sleep — which I probably need.

During a recession, it’s necessary, if not fashionable, to be frugal. Eventually, the boom will be back, and those Joneses will be flaunting their new found wealth at your doorstep again. Often, I get questions about how I managed to get out of $40,000 in debt after the first dot com bust. The getting out of debt part had not much to do with the bust, but more to do with the bubble.

This is how I dealt with the temptation to spend at the height of the bubble.

1) I hung out at the mall for fun.
I know that sounds crazy counter-intuitive, but I went straight to the lion’s den. I walked, walked and walked, and bought virtually nothing. Sure, the temptation was crazy strong, but after a while, I got used to it and a sort of numbness came over the desire to buy. Even now, more than 5 years later, the mall seems filled with overpriced things I don’t really need.

2) Used is a beautiful four-letter word.
I do have a weakness for cars — those beautiful, shiny, fun beasts of consumerism. Solution: I became good friends with Craigslist. There are remarkable treasures to be found in the For Sale By Owner Used car market. But then again, there are plenty of overpriced and oversized and overly loaded cars there as well. In 2004, I swallowed my own objections and purchased a sedan with 80,000 miles for $8,000. It was outdated, had scratch marks on the bumper and in a color we never imagined owning. But it was safe, reliable and actually quite comfortable. I was always a “new car” guy, but that used car showed me the virtues of buying less than I “needed”. I haven’t bought a new car since — or paid more than $15,000 for a car (while the average new car now costs $28,400). We still buy used whenever we can and sell our stuff on the used market whenever we can.

3) I ignored raises.
Sure, I got them, but I didn’t let it change my life. In other words, I didn’t grow into my salary. Of all of the things that I did, this little tactic was absolutely the most powerful force. When I was making $35,000 a year, I used to be able to save (or pay down the debt) to the tune of about $2,500 a year. I felt fortunate enough to be able to do that. It meant not buying the new car or that new gadget, while everyone else seemed to do so. But when my income grew to $40,000, that meant I almost tripled the amount of money I saved. In other words, I could get out of debt in 1/3 the time (or grow my savings 3 times faster). As I paid off my debts, we felt our spending power increase even though we were not actually spending any more money — purely because we had less credit card or car payments to make.

The alternative is pretty typical of the pains associated with the boom and bust. As people’s income grows, we end up spending it. That means we establish new spending patterns and establish a “new normal”. When the hard times come, we must cut back, resulting in painful changes to behavior and lifestyle.

To this day, my wife and I firmly believe in Living Small. Living Small (capital L, capital S) means not just spending less than you earn, but resisting the urge to spend more just as your income grows. Instead, find a sustainable spending level and stick with it. This is what allowed us to handle sizable drops in our income.

I know during a recession, it seems like you’ll never be able to save money, but when the day comes when you can start to do so, remember how to Live Small. It’ll help you to Live Large later.

Let’s take a look at my “career” at the Cheezburger Network:

1. Sep. 2007: That idiot who quit his job to run a cat picture site. (Staff count: Approx. 1)
2. Jan. 2008: That idiot who quit his job to run some photo sites. (Staff count: Approx. 3)
3. Jan. 2009: That idiot who quit his job to run a time-waster network. (Staff count: Approx. 15)
4. Jan. 2010: That idiot who quit his job to run a… what the hell are they trying to do over there? (Staff count: Approx. 35)

Every quarter, we embark on a project or come across an opportunity that would fundamentally alter who we are. If you would have told me in 2008 that we’d be running 40+ sites and be one of the largest networks on the Web, I would have not believed you. In fact, I am on the record saying that we could never really see ourselves beyond the 25-sites mark at Gnomedex 2008.

Yet, here we are. WTF?

I believe our ability to grow has to do with two things:
1) Having no false expectations about who we are (we’re here to make you happy for a few minutes, nothing more) and,
2) Having no holy 3-year plan. (Few thought we’d be anything, so it was easy to be something).

That meant we could relentlessly chase what our users wanted each and every month — our own visions be damned. Every year, we look back on the last, and we’ve reinvented ourselves as a different company. Perhaps to the outside world, we haven’t changed much (which I see as a huge positive), after all, we still post the same number of lolcats to I Can Has Cheezburger? each day, but the dramatic internal change is easy to recognize in the office.

That constant drive to reinvent means it starts with me. Every quarter, I look back at the last and my “job” has totally changed. Last quarter, I was hell-bent on finding the Cheezburger way to do recruiting and hiring. This quarter, I want to create a lasting Cheezburger culture within the company. The only thing that’s common from quarter to quarter, from “job” to “job” is that I’ve never done it before. It’s scary as hell. But I really don’t have anything to lose. I can always get a new job.

However, when it comes to dealing with the public, the same is not true. Unlike a team environment where people want to learn, the public generally doesn’t care about one particular view or another. It’s easy to pass judgment and paint the other side as a moron, pure evil or a greedy bastard. I do it all the time. And the Internet has made it that much easier to polarize each other.

Jumping into the flame war can have serious consequences. Ask anyone and they will tell you that they prefer a factual and reasoned argument over name-calling and absolutism. But a quick read of pretty much any site’s comments will reveal otherwise.

But I don’t buy the “public is stupid” argument that people use an easy way out to paint the users. I’ve learned over the past three years that the public is in fact quite intelligent and reasonable. When you run a user-generated content network, you rely on the smarts of your audience for everything. Quite the contrary to conventional cop-out, the public is actually pretty awesome — with occasional, temporary, lapses.

The broad stroke of painting the users or the public as “stupid” will only color you ignorant. This is a lesson we drill into our team at every opportunity.

If you’re going to start a public-facing company, here’s a few well-earned lessons I learned over the last several weeks:

• Lesson Number 1 is to not argue with the Internet — there’s really no winning.
• Lesson Number 2 is that I am not as clear of a communicator as I wish I was.
• Lesson Number 3 is that disagreements are impossible to avoid, so don’t fret about it.

Haters gonna hate, but learn to love your haters ‘cuz they’re just like you and me.

I’m blessed enough to have endured some of the most humiliating lessons of my life early on in my career.

The Cheezburger Network’s Board of Directors is the one and only boardroom experience I have. While things are going well, I feel that it’s important for me to know how other Boards operate (so I can get ideas, experience something new, and make meaningful contributions) but I know that being on the other side of the Boardroom allows me to see myself with more objectivity.

As a board member, here’s what I can offer:
1) Everything I know about being a start-up CEO and growing it to profitability.
2) Everything I know about making the hard decisions as a person.

So, I am actively looking for a board seat at another startup as an outsider. The criteria for me is simple:
1) It cannot conflict with my responsibilities at Cheezburger.
2) The startup must have E&O insurance.
3) The company must be committed to good corporate governance.

One of the fundamental changes that technology brings us is a change in the way we do business. One of the least-understood impact of such change is a change in culture.

When I went down to Las Vegas for CES, I was invited on a tour of Zappos by two Vegas social media starlets Bill Cody and Chris Rauschnot. I started the Zappos tour with a healthy dose of skepticism: “they can’t really love working there that much, could they?”

I’ll cut to the chase: I walked out a believer with a handful of business books from their free library and an appreciation for the blank slate technology has given entrepreneurs like us.

The most important thing I learned is that Tony Hsieh, the CEO of Zappos, had an opportunity to reinvent the way shoes are sold as a result of the Internet revolution. But rather than using technology to define the business, he used the technology to enable a new culture in customer service — by re-examining every little detail. (If you want to read more about the Zappos culture, I would recommend that you Google it. There’s been enough written about it to fill several books. Then go take a tour and see for yourself.)

The most direct reaction from my revelations at Zappos would have been to run to the airport, draft a long email on the flight and implement the practice by edict. Wouldn’t that have been easy and effective? But most importantly, it would have been a waste of time. Cultural changes don’t work that way.

Coincidentally, for weeks before visiting Zappos, I have been obsessed with finding The Cheezburger Way to do recruiting and hiring. It’s been priority #1 for me for weeks.

So, on the way home from Vegas, I took a deep breath and decided that culture was best built by the people who work here — so I started asking our team questions about what kind of a company we wanted Cheezburger to be and we started experimenting on our recruiting process, because that’s where it all starts.

It may be subtle and hard to notice, but this job listing for a “Supercharger” is the result of 6 weeks of interviews, research and soul-searching. Can you spot the difference?

Then we end up with:

Don’t tell me I do nothing at work…

What looks like this on TV:

Actually looks like this from the point of view of the talking heads:

It’s amazing what you can do on TV. Also, Aussies are just so adorable!

I’ve been on both sides of the system. As a relatively young man, not being insured doesn’t appear to be much of a problem. Medically, young males have very few things to worry about. On the other hand, as a husband, I can’t imagine putting my family through a financial disaster that is possible under the current arrangement. I’ve seen my mother survive cancer and enjoyed the benefits of company-paid healthcare. And then watched her become worried and desperate for coverage after she was laid off and became uninsured.

As a CEO, I’ve come to realize that lack of healthcare is a barrier for employees from leaving jobs and starting new businesses. That’s a problem for a small business / startup like ours. Its not unusual to run in to very talented employees working at large companies who feel that they cannot leave a job they dislike because our company’s health plan is not as good. I’ve met many people who would love to start a new business but can’t, because they would be unable to get coverage for pre-existing conditions until they reach a certain company size.

Effectively, unequal healthcare serves as a barrier to innovation. It’s entirely possible that our own employees may quit and start their own companies because guaranteed heathcare coverage may allow them to do so, but I have no desire to be the man that keeps an employee down. Increasing costs in healthcare also means that annually we face the choice of paying more in premiums or cutting benefits.

This will probably be the last time in a long time that we’ll be able to have an intelligent public debate about how we can safeguard our family from healthcare costs. So please, don’t be afraid of the complexity and start asking questions.

If the crowd’s job is basically to follow orders from well-funded visionary authorities… and kinda look all crowdy-like while doing so — then what, exactly, does crowdsourcing mean?

I love Rob’s question. I think most other people miss the big underlying reason why the video was so amazing and enjoyable to watch. There’s been a trend and pattern among viral videos that leverages “Obsessive Houdinism”. (I’m going to call it that.) “Obsessive Houdinism” is the theory that by using technology and a big helping of obsessive coordination, we can transform what appears to be an impossible feat into an entertaining event.

The Sour music video almost maximizes this theory by using amateurs and hence people’s awe of “amateur aesthetic”. I say almost because if the video had been performed by the users’ puppies and kittens, the Houdini act would have been more impressive.

That video is not crowdsourced. Just massively awesome.

Turning the question upside down also raises an interesting question. Consider Hollywood, where millions of struggling amateur writers are creating new shows and some get made, is that crowdsourcing? If not, what about American Idol?

Watch the promo video where Christian dresses up for the first time in his life:
Watch live video from PC Hookup on Justin.tv

And next Tuesday at noon eastern, I’ll be on MTV’s It’s On with Alexis Chung.

<goosebumps>

</goosebumps>

Via Dweebist.

Here are your normal, beautiful, colorful varieties of tulips:

Then came the Ninja variety.

True to form, they could not be seen…

(More on ninjas…)


see more Lolcats and funny pictures

Thanks for all your emails, tweets and screen shots about me on the New York Times front page. (It was for this article on blogs to books.) The kitteh on mah shoulder is the Happy Cat plushy from Lolmart.com.

After a while, this can get really taxing and stressful. It’s like running a mental marathon everyday, whether you feel like it or not. Running a start-up isn’t a young man’s game, it’s a game for people who love what they do. Because if you don’t love doing it, it’s not worth the pain.

My friend Jeffrey Kalmikoff of Threadless wrote about the time in between the running. Sometimes the hardest thing for me to do is to turn off the brain. Instead of fighting it, I’ve learned to just redirect that energy at something else. I’ve found it extremely important to structure an environment that helps me become more knowledgeable and connected.

When I’m not working, here’s what I’ve been able to structure myself to do:

• Help my friends:
  During the week, I make a list of things I “owe” to my friends and I try to come up with ideas to help them. It’s sometimes a lot of fun to think outside of my world and put myself in their shoes. I found myself learning a lot about my friends and myself that way.
• Read:
  Technology can make a big difference. I purchased a Kindle 2 recently and it’s upped my book-based information intake 300%. Dorky, but I love it. I also found a way to use my credit card points to pay for magazines I like. Cash is king. And saved up points don’t accrue interest. Use them.
• Plan relaxation:
  Personal trips, buying some toys, making appointments for things. This commits me to blowing off steam so that I am sure to do it and give me the mental reward of knowing that there’s a small reward at some point in the certain future.

So, how do you turn it off?

Eaten at this amazing restaurant:

Ben Huh on Sound Magazine Cover, April 2009

My very first cover. It was a fun, crazy, cat-filled photo shoot (half kitler, btw). Here’s the link to the digital version of the mag.

I know that Macbook looks totally HAWT on my head. I should wear it more often. I did get a little nervous when I read that title “Seattle’s Internet King.” I’m sure some Seattle Internet folks are asking “Who died and…”

Here’s a picture of the invitation being delivered to the office.

So what does that have to do with the implosion? Running ICHC leads to SXSW, which leads to Twitter, which leads to Digg homepage, which leads BACK to Twitter, which leads to Son of a Tweet, which is one of our network sites…

Ridiculousness and dinner tab roulette ensued and I’ll post videos when I get back. If you’re at SXSW, you know where to @ me.

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A piece of content that has virtually no value finds meaning in a new context and a new time. Then, like a salmon swimming upstream, it finally finds its home in the hearts and minds of those who want it the most.

The ‘Tubes makes me just as happy as that drummer.

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The cat captioning business is an unreal business — in a good way. So good, that we jumped at the opportunity to buy the site. And we did deals like it again, and again, and again.

If you’ve heard me talk at any conference, you’ll frequently hear me talk about how valuable our users are to us. Any publisher will tell you how much they need their users, but in our case, it’s even more so. Thanks to our users, we have virtually no costs on content production and no marketing costs. For a publisher, that’s a dream come true.

Look at it this way: If we were General Motors, it’d be like getting all the raw materials for free, getting your customers to assemble the cars for free and getting them to convince their friends to buy the cars. Unreal. No bail out needed.

It should come as no surprise to anyone that we turn a profit. But it does. To practically everyone. To be fair, it’s not glamorous earning crappy CPMs in this busted economy, but a lean business is a real business.

I’m not writing this to brag*. I want to share that you don’t have to think like everyone else to make money. In fact, thinking unlike everyone else will help you see opportunities where others see none.

(* ok, maybe just a teeny bit)

37 Signals:

TV quality in the last 10 years hasn’t gotten any better. They’ve replaced 1 decent show with another, just staving off decline. Imagine how much the Web would be eating TV’s lunch had TV not moved to HD. TV rakes in the bucks because it’s hard for people to change habits and it’s easy to use. But habits will eventually chase desire and the Web only gets easier. It’s only a matter of a little time.

Radio. You’re up next.

An eye-opening thought. Since I was born, the US has been governed by the following presidents: Carter, Reagan, Bush I, Clinton and Bush II. But effectively, in my childhood memories, it has been Reagan, Bush and Clinton. (Sorry Prez. Carter. I was just too young.) I can recall hearing “Mr. Gorbachev, tear down this wall,” watched The first Gulf War, and experienced the wild prosperity of the Clinton years.

Fast forward to the future. “I have a dream…” Let’s say Obama wins re-election in 2012. Then Clinton (or *ahem* Palin) takes office in 2017.

<cloud9>Here’s what’s amazing. If you were born any time between 2000 and now, your entire experience and understanding of this nation’s leadership will be through the pictures and actions of a black/mixed-race man and a woman. Think about the fundamental change in perceptions of race, gender and leadership this new Dream Generation will bring to the world.</cloud9>

Poster by xadrian (Creative Commons)

I used to blog regularly for 5 of those 7 years, but found that I really didn’t have much interesting to say. This time I’ll try to be more interesting. In the words of moms everywhere “if you don’t have anything interesting to say, don’t say anything at all.” Wait… that’s not what mom said.