October 2014 status - a live autopsy and question

monetise the classifieds

I would quite happily pay a monthly/yearly fee to be able to sell stuff on here, esp. consider how much a f*cking joke ebay is now

^I've always said this should be the case. Classifieds are just full of fee-dodging spammers.

Even more so now

^^ Serious consideration right there.

Always intended, but it was impossible to do so under vBulletin and we had to lay a solid foundation where we would be able to say "this is a conversation, and that is a classified advert". That foundation has been laid (with the ability to say "that is an event"), and the plan was to build the user numbers and get the funding before moving on to things that make sales easier (native mobile clients that felt awesome would really differentiate more clearly) as well as turn on more revenue streams for us and sites on our platform (tickets for events, paid classifieds, etc).

You can see why it was a "go big, or go home" plan... native mobile clients, and significant new projects whilst still maintaining and supporting the sites we have, whilst also needing to sell more and get new sites... this was always way beyond 2 people (now 1 person).

Even with the prospect of Microcosm going open-source, I will probably continue those features anyway. Simply because even if the company is no more, I still believe in what we've done to the point that I want to push it forward. I may not get rich off it and take over the world, but we've created a good thing that is working for the sites using us, and I'm not sure I (or the other customers) can now look at vBulletin, phpBB, and the other forums (including even new ones like Discourse) again. Microcosm is actually a solid product and a pleasure to use (though my Following page seems to be getting slower - will need to look at that).

And the quote function^

You need to look at that too

quoting will be the next tagging, bans galore. ha.

It's hard to know what to suggest - I stand to lose (for me) a lot of £$. I feel like it hasn't had the time to pick up enough people/forums/customers - it needs more time. I understand you don't have more time.

I wonder if Zombie + commitment to massive engagement from investors/users to advertise and promote it might help?

Or Seedrs again - you have a lot of credibility there with the speed you've raised funds and could hopefully get another £100k to pay you and a marketing/sales type person, and hopefully get a wider base of investors including more non-lfgss.

There doesn't seem to be a hurry to get investors back our money, from our point of view it was always a punt, and I don't see the disadvantage to us of waiting longer - I think we'd still get the SEIS relief if it sat as a Zombie for a year and you then pulled the plug, wouldn't we?

The main disadvantage to doing that as far as I can see is that it is a massive burden on your shoulders. If you can minimise that somehow, get another job and keep it limping along, and we can all try to advertise it and sell it to forums and to any potential investors we might know it could be worth keeping it running for another year. IMHO.

But I would respect your decision either way, both as it is better informed than mine and because I trust your judgement.

you've done something awesome, whichever way it turns out, and loads of us believe in the product and in you.

The other question is: how do you stack up against competitors? We know Microcosm is streets ahead of old forum technology, but how does it compare to new tech springing up now? How do you stack up against Discourse? Any others you keep an eye on?

The 'limp along until organic growth revives it' plan risks being left behind by startups with money to spend.

I agree with @mrdrem regarding marketing microcosm. Perhaps we could all do it with some guidance from a marketing person. Someone clearly needs to lead a marketing strategy and it shouldn't be you David. You could however arrange a planning meeting to kick start this (like you arranged the initial pitch session at Yell.) I would attend and be happy to take some role in this as will many other, especially if they have a stake in the product.

Selling it has always been secondary to developing the tech which is understandable since you and Mat are tech guys not sales people

There would need to be some resources for this so if you can raise funds through the current model whether through classifieds, subs, and further crowd funding, I think its worth a final push just to let people know the thing exists and what it's power is...

The other question is: how do you stack up against competitors? We know Microcosm is streets ahead of old forum technology, but how does it compare to new tech springing up now? How do you stack up against Discourse? Any others you keep an eye on?

The 'limp along until organic growth revives it' plan risks being left behind by startups with money to spend.

Yeah, I'm concerned about that... that the zombie will age quickly relative to other funded products.

The biggest advantage Microcosm has is the centralisation and that we started with an API.

The shift to mobile is a key part of the opportunity window we saw, and we felt that unlike phpBB, vBulletin, and even Discourse - all of which are things you install on your own server - we would focus on being a centralised platform.

What that allows is for native mobile clients to be made that give a phenomenal experience that no-one else could offer. Well... Google Groups could, or Yahoo Groups... but rather insanely neither even has an API and both seem to be largely neglected.

So you see in our mobile design the hints of what a mobile app would look like. And that is our core advantage over everyone else.

Looking more specifically at Discourse, we've taken an old-web approach (single web pages served from the server) and they've taken a new-web approach (big JavaScript application). This was a conscious choice on our part... forums have always been dark silos of information that Google couldn't reach, and thus the forums didn't really get to grow by discovery (from new users). We chose to build this rich API, and have a fairly primitive front-end so that Google would index us deeply and we'd help those forums grow as a result.

Discourse would likely argue that the newer single page application gives them the ability to be embedded on other things, integrated, and feeling fresh and modern. They'd be right on that... our disadvantage was always that integrating a larger multi-page platform into something else is harder than dropping a JavaScript widget on a page.

Discourse was made for devs, we made Microcosm for non-devs.

Anyhow... the decision has been made. I've gone back and forth on it, continue or not. Stopping seems the hardest and yet best thing to do.

The financial projections of a zombie company aren't substantially changed unless an enormous growth in user numbers is achieved. I don't believe that without a full-time member of staff, and with my only being able to put effort in around another job, that this could work. I truly believe this would be throwing good money after bad.

I've spoken to the company accountants today, and will speak to Seedrs tomorrow.

We'll wind-up at the end of this month, or as soon as possible thereafter.

I need to take care of a number of things that I'm obligated to do for shareholders, HMRC, the Crown, etc, and will need to resolve some other stuff that I'm not obligated to but it's right to... support customers.

Specifically I'm going to try and end the company cleanly at the end of this month, and return what cash exists according to the cap table (i.e. some portion will come back to you but not much) - I need to check with Seedrs exactly how this works as if it triggers Capital Gains then it's almost pointless... so I'll get that worked out.

I shall also be selling physical assets and putting those funds back in the pot of cash to be restored via Seedrs to shareholders. There isn't much, but a couple of Lenovo X220 laptop, a Mac Air (1 year old), an iPad mini (lowest spec, 6 months old), some SSD drives (256GB), a couple of 30" monitors, and so on. Price will be according to the book value, which is purchase price and a 3-year straight line depreciation - I'll figure out the prices and will list the items in classifieds.

I'll also need to work out a plan with existing customers to offer them a path forward. I'll open-source the API component and the database schema which are the only remaining closed parts. And we'll offer the scripts to help people build their own server. I'll personally pay for the platform to continue for another month or two so that customer sites don't suddenly vanish. The accountants and Seedrs can help with dealing with the company, but I shall support and help the customers... I loathe reading about startups that fail and delete customer data or suddenly pull the plugs. I won't do that.

As for me. Who knows. It doesn't feel like the highest priority at the moment, I've got skills and I'm sure I'll get a job just fine. I'll make some enquiries but mostly I'll work on the stuff above.

Sad day.

I am sure that was not an easy decision. Well done for all your hard work, what you have achieved has been impressive.

I'm sad that I couldn't give people back more than they invested.

I really hope that when the SEIS paperwork is all processed that you all file it in whatever way it needs to be, such that you get the majority of your investment back from the taxman.

I'll make sure Seedrs give guidance on this.

No worries, for most of us this was speculative and we were aware of the risks.

I didn't even get the last thing they were supposed to send.

I don't know what to say. Very very sad.

But what about option #5 ?

All of the above. Real shame for it to come to an end this way

But what about option #5 ?

Of the daily active users, assuming a best case scenario of only losing 25% of them and only losing 25% of the active sites as a result of it... it still wouldn't have raised enough monthly recurring revenue to have taken us from cost-covering to profitable when more than a single salary is involved.

All it would have effectively achieved is similar to the zombie company scenario: A delayed death sentence, but more delay via this method. That might preserve the company in a form of stasis, but it burns away a year of my life on the gamble that there could be an upside to it.

I've put a good 2 years into making this work, and a year or two before that in researching the market and testing ideas. At some point, when it's really obvious it's not working, the line has to be drawn.

It really isn't working... we've not convinced angels or VCs (who would know) otherwise, and we've not convinced anyone that the company is a purchasable entity (that there is enough future value to be had from the remaining closed-source parts).

Just producing revenue enough to meet costs isn't enough... all investors wanted a return on their investment, as did I for my invested time and loss of earnings, as would any future investor or buyer. The proof in this pudding is that a return was not going to happen at the rate required enough to make this attractive... simply preserving our current position is to relatively slow that rate even more. It makes no sense.

For a standalone site that took the open-source code and installed it... charging for access or classifieds does make sense as it would cover all (material) costs. But for a platform that needs growth to eventually reach the scale at which such revenue transforms things, the revenue would not cover the full operational costs (inc salaries and other overheads like legal and accouting, etc) involved nor then generate enough profit to somehow alter our present growth rate (fractionally above linear).

Option #5, charge users for access doesn't work for a platform until the platform already has sustainable growth momentum that adding the charge wouldn't totally kill the remaining growth.

Sad face.

Looking through the Seedrs website I can see many names of people I know (from on here) that have invested their money in this platform. I hope everyone feels ok about the ROI and the ultimate decision to wind-up.

I'm not sure how I feel about it.

I'm sad it hasn't worked out, but i think you're right to face the fact that the plan failed and so Microcosm the company is over. I don't regret having donated to it.

Whomever installs it and sets up the affiliate relationships would get the revenue. As this instance would end when the company is wound up LFGSS would go onto a new instance and the revenue would go to LFGSS.

Now, will LFGSS income cover stand-alone hosting costs?

Now, will LFGSS income cover stand-alone hosting costs?

Unsure.

I'm not sure I care enough to fight that side of things (LFGSS costs) at the moment. I suspect I'll throw it on credit card, wait until it stabilises and then will see whether I've come out behind, about the same or ahead (and if ahead, LFGSS CIC can have it as a donation).

Most of the LFGSS donations have wound down since the migration, and whilst there are some (over £200 per month) and together with LFGSS affiliate revenue (perhaps £500 per month) it should be enough. That stuff is still a little messy given that the change was so recent and the costs haven't stabilised long enough for me to know (LFGSS has some annual costs as well as monthly costs... most of the monthly costs were raw hosting, so those are predictable but revenue and other costs are less predictable).

Seriously though... there's not going to be a service outage, I'll just throw my credit card in front of that and will defer to a future time when I'm employed again the tidying up of that.

I've been think for a while now, since I was offered money for LFGSS and felt odd about it (again)... perhaps I should just gift LFGSS in it's entirety to LFGSS CIC. That would make it a non-profit and once settled into that it would provide enough stability and transparency to make the covering of costs and doing of other things easier - less panic-driven and messy.

But then again... maybe I'm just getting to a point of exhaustion because that reads a bit like a half-hearted self-destruct mechanism. Who knows... I'm going to defer any rash decisions and let credit cards act as a buffer zone.