StackExchange Changes Everything, Risks a Lot

by Christoph Menge in Entrepreneurship, Software

The wikorum-engine StackExchange just announced they completely changed their business model. Basically, instead of buying a license from them, you now need to suggest a concept for a site. That concept can then be voted for by the community and if you can prove you have enough people interested, they will set up the site. The whole site is then community-owned and will be operated by StackOverflow. The details are much more complicated, of course. I still consider StackExchange a commercial technology. They don’t charge you for the technology, but they don’t let you participate in any effort you put in there, either.

That Domain-Issue

There is something peculiar about this I really don’t understand: If the domain is actually owned by the individual who suggested the concept, the FogCreek will never have a reliable revenue stream because the owner of the domain is the master — he could simply switch to a different technology, if he manages to keep the links intact, which might be a very important technology-factor when choosing some alternate technology.

On the other hand, if the domain is supposed to be owned by FogCreek, they have to buy every domain that is being suggested in the forum that exact second, otherwise domain grabbers will just … well, grab it (or even other users signed in). Democratic voting for domain names? I don’t think so. Personally, I would never even write down a domain name -especially not in a forum- if I like it and it’s not taken, I’d simply buy it – that gives me a year to think about it.

Not Convincing

Summing it up, I don’t think the move to their new model is a wise decision. My primary concerns are:

  • The net is a trial-and-error place. You set something up, and see if it works. That might not be a wise model, but it is very democratic and has proven to work fine. Perhaps because it is not so ‘wise’. Note that wisdom grows from experience, inherently incapacitating certain types of innovation, namely those that completely contradict experience made.
  • The code remains closed, so real customizations are not possible. This is a major flaw. I’ve got a dozen ideas of sites that could become really, really helpful to people, but they need some additional features or some heavy customization that is a major pain if you can’t access the sources. They don’t even have an XSLT processor you could use as of now…
  • If a page does not offer any way to gain revenue, you can’t invest in it’s development, both technical development and marketing, where the first is already inhibited by the fact that customization is not possible from the technical side.
  • This move will dramatically increase commitment to the development of open source clones such as OSQA, which looks very interesting by the way. There is also Shapado, and I think more will come. Crowd development can be extremely efficient and fast.

For all who operate a StackExchange site as of now, there is the cool thing that the site will operate for another three months, or if you have some real action going on, one year for free. That is great, because it allows for an easy transition to some other technology. It’s a bit sad to see that happen to such great technology, but I don’t believe this will work. Building a community remains a lot of effort, and people won’t put that effort in if they can’t call it their baby, can’t make any revenues, can’t make any customizations to the code, and can’t use the page to direct some traffic to other projects, I believe. We’ll see how it works out. I guess I will establish a small knowledge-base / link list at wikorum.net to aggregate some related information.

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