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6/30/2006
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Mitch Wagner
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Accidental Tech Entrepreneurs Turn Their Hobbies Into Livelihoods

InformationWeek interviewed five accidental entrepreneurs, including the founders of del.icio.us and Digg and the author of the blog Dooce, to find out how they freed themselves from the paycheck-to-paycheck grind.

Del.icio.us is free technology for saving and sharing bookmarks that are viewable to the general public. Each user has a page of bookmarks on the site. Instead of saving the bookmarks in folders, users describe each bookmark with keywords, or tags. Unlike a folder organization system, each bookmark can have multiple tags. A user who finds an interesting page about Linux alternatives to Microsoft Exchange might tag it "linux," "microsoft," and "exchange." Users subscribe to individual tags and see bookmarks from others who have that tag. (Try it out on the links in this paragraph.)

Del.icio.us grew out of the popular late-'90s blog Memepool, which Schachter authored. That was back when blogs were hand-coded, almost exclusively run by techies, and consisted mainly of daily links and descriptions of interesting Web sites the authors had discovered during the day's recreational surfing. Memepool--named for the word meme, meaning idea, and a play on the phrase gene pool--takes suggested links from users. When Schachter got behind in posting to the blog, he copied links into a file. After a year or two, the file had grown to 20,000 links--out of control.

In 2001, he wrote a single-user tool to track the suggestions; he called the tool Muxway, a nonsense word. He did that work on the side, while continuing to work in finance. Muxway became the multiuser del.icio.us service. He quit his job in March 2005 to devote himself to del.icio.us full time and received an undisclosed amount of venture and angel funding later that month. The service had 300,000 users and eight employees when it was acquired by Yahoo in December for an undisclosed purchase price. Schachter now works for Yahoo as director of engineering.

Media Mogul

Where the Armstrongs, Trotts, and Schachter became entrepreneurs as opportunity arose, Kevin Rose, co-founder and CTO of online news site Digg.com, sought out his new Web-based career.

Favorite links are a del.icio.us treat

(click image for larger view)


Favorite links are a del.icio.us treat
Rose's background is in both IT and broadcasting. He worked in networking and systems administration in Nevada, then did online marketing and systems administration for IBM. At the time he created Digg, Rose was hosting a technology program on TechTV, now known as G4tv.com.

Digg mixes the principles of Slashdot and del.icio.us. Users register to join it, and when they see an interesting technology article anywhere on the Web, they submit the URL, along with a headline and description. Submitted articles appear in a queue, which any registered user can review. If users see articles they like, they click an icon marked "Digg This." Articles receiving the most Diggs, or votes, appear on the home page.

"I was sitting around thinking about how this would play out," Rose says. "My background in school is in computer science. I wrote a scoping document to a friend, who is a developer. The friend said it would take two or three weeks to create and cost 700 bucks, so I said, 'Let's go for it.'"

That was in October 2004. Digg launched in December. When Comcast bought TechTV and dropped its technology focus, Rose quit. As is true for all the entrepreneurs we profile, he found that the Internet made it possible to start a business with little investment--much, much less than was needed before the Net became mainstream.

Rose launched Digg on a $99-per-month server and built it on open source software--the basic Lamp architecture: Linux, Apache, MySQL, and PHP. He put up $700 for development costs, plus $99 per month for Web hosting. "It was something I was willing to take the risk on," he says. "I was planning for success. I decided to go for a dedicated server off the bat."

Digg now has 16 full-time employees. The developer who wrote the initial code for Digg is lead developer at the company. Digg secured $2.8 million in funding in October from sources including Greylock Partners with Omidyar Network, plus angel investors including Netscape co-founder Marc Andreessen. Digg is privately held and won't disclose revenue. It generates sales from Google ads and recently entered into a partnership with Federated Media for ad sales.

The Lone Developer

Tom Davis had a career problem. He'd majored in marketing and advertising in college and worked at an ad agency his senior year. "I really didn't like advertising, and I kind of freaked out," he says.

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