Evil RBPs
posted by Rick Webb 
on July 17, 2008 at 04:26 PM
filed under: Entrepreneurship
Rick Webb
Co-founder, COO : Boston
topics: User Experience, Internet Culture, Internet Video, Metrics and Analytics, and Rock and Roll
filed under: Entrepreneurship
Today’s rant: RFPs that are secretly RPBs, or Request For Business Plan. Seriously. I can’t begin to tell you how many RFPs I’ve gotten that basically are asking us to start their business for them. They want to build the next Facebook or Flickr, and want to pay us something like $50,000 to build it for them. I am at a complete loss how anyone could really think this is reasonable.
Ooo oo – and the sister project: the traditional agency driving a new online product for the client, mainly driven by the agency’s desire to appear to understand the interactive realm, insert themselves into the conversation and come out of the whole thing with a case study in their online thought leadership. Except it’s abundantly clear from day one that they really don’t have an idea of what goes into building a successful online community. This is turning into the modern equivalent of the “let’s produce a spot to win awards” syndrome.
First off, if we knew how to build the next Facebook for $50,000, don’t you think we probably would have scraped together $50,000 and built it? Secondly, do you know how much it costs to build Facebook? And maintain it? Dude Facebook spent many million dollars just on servers in the last year. Just the boxes! Most of these RFPs have no idea how on earth they’re going to maintain and grow their site – and get appalled when we imply they may need to spend more than $10,000 a month on growing their site.
And revenue. Man, I know I’m an ‘ad guy,’ but I come from the world of economics and it never ceases to amaze me how many people want to build something without any clear idea how they’re going to make any money, aside from “advertising.” It’s no surprise, of course, that few of these people have actually worked in advertising, much less the media buying & planning side of it, so they have almost no insight into how ad agencies actually decide where they’re going to place an ad. I’ll clue you in – they place them on sites with a large, engaged user base of a specific demographic. Which means you need to obtain a large user base of a specific demographic. Which takes time. Which takes money.
And I know I haven’t coded anything in a good 3 years now (though, man, my textile skills are smokin’ now), but it would probably help if someone on your team new how to write a line of code.
Here’s an important point, which hopefully makes this curmudgeonly post slightly useful: just because you’re building a website for a brand doesn’t mean the business case shouldn’t be thought through. You will be presumably competing with highly-organized companies in whatever realm you are considering dipping your (or your client’s) toes into. They are highly organized, probably have more money than you and probably have a great experienced, highly-dedicated team that are all entrepreneurially aligned to make sure their site kicks your site’s ass. You need to think of it like a business, even if it’s a branding exercise. Because a failed community (ahem, Bud.tv) will not only not help your brand, it could well hurt it.
This isn’t to say some of them aren’t a good idea – we are working with 4 different organizations right now on startup sites that have been vetted by intelligent financial individuals, and have CEOs or Presidents or Founders who bring something significant and unique to the table. And we’re in talks with 2-3 more including one that is driven by an agency – a smart traditional agency that knows what it brings to the table, knows what its strengths and limitations are and knows to partner with people, align everyone, and run the project like what it is: a new product offering from their client.
Oh, and all of them are willing to engage with us to become team members and partners in their success. I find it interesting that the RBPs that are usually least thought out are the ones that are also least amenable to sharing the success.
God, I love my clients. Thank you. This fall is shaping up to be a good time.
3 comments
I'll toss you an email... but the general feeling is "yeah, that's how it goes now!"
On the inverse of RFBPs you have teams with a defined and well-thought-out business plan that just happens to be the worst possible idea. One of these groups came my way with a plan that seemed pretty solid, and raised a good seed from various sources. They knew exactly where they wanted to go, and how they wanted to get there -- except they didn't have the know-how to make it happen.
The result was a strategy was fine - but wrong for the market. While their team is full of proven leaders and visionaries, no one had a good tech or advertising background, nor did they know how to appease the VC circuit for common-questions or due-diligence. Instead of selling their existing strengths, their plan was more about leveraging the expected hottness of an unrealized product -- which seriously undervalued their key market differentiators and revenue potential, and had no safeguards for when someone else offers the same exact product.
I had to convince them not hire us to do what they wanted -- I couldn't take their money and sleep at night. Thankfully, they listened. Not only is their new approach closing in on huge round but, just as I predicted, everyone-and-their-mother is now offering the same kitcshy tech they wanted to spend their budget on. Had they stuck to the original plan, they'd be out of business unable to adapt or compete -- instead they're now poised and ready to dominate a new industry that they concepted.
Welcome to web two-point-d'oh.