Profitable anarchy

The company name Stateless Systems has the ring of anarchy about it.

Certainly the company’s products are highly disruptive and push moral and even legal boundaries.

Founders Guy King, 30 and Bevan Clark, 35 met at realestate.com.au and now have seven internet properties with 13 million visits per month.

The main site, RetailMeNot, launched two and a half years ago, is a site for finding and sharing coupon codes for online discounts.

Amanda Gome talks to Guy about breaking lots of rules, with innovative websites his team can build in a weekend.

Amanda Gome: When you working in R&D at realestate.com.au, what was your burning idea?

I come from a web development background; have been doing it for a fairly long time. So I have always worked on hobby projects in my spare time and this latest one, retailmenot.com, just took off as soon as I launched it and it all happened really quickly from there. For a few months I was working two full-time jobs, I had a day job and then would come home and do all this stuff.

What made you say “I’m throwing in the towel”?

It was pretty much profitable from day one, so it didn’t take long at all, with the growth trajectory that we were on, to get to the point where it made sense to be doing this full-time.

But you didn’t just focus on that? You now have seven sites?

Yeah. It is part of our culture that we love the web and we love building stuff for it. We have got this philosophy as well that it is quite cheap to fail on the internet, it doesn’t cost a lot to have an idea, build it and get it out there and see if it flies. So of those seven web properties we have built, probably about three of those are profitable. So that is what we keep doing, we keep creating new things.

And what is the philosophy behind the new things? Does it fit into any overarching system?

It is evolving. Personally, I keep coming back to this rule: build stuff that you would use yourself. And so it is sort of like scratching an itch, I wish there was this service out there, it will sit in the back of my mind until we get to the point where we are like ‘yeah we have to build this’.

So was that the basis for the decision on retailmenot.com, you got sick of looking on Google for coupons and thought ‘I’ll build an aggregator for all coupons’?

Yeah exactly. First to explain a coupon code. When you go through the checkout of an online store you can enter this special code and get a discount, it might be 10% off or free shipping, something along those lines.

I remember looking for these on Google for a purchase I was making and it was spread out everywhere, often on forums which had expired or the sites were really quite spammy and didn’t have the actual information that I was after. It was sort of a perfect niche for me because I had built a collaborative website previously called bugmenot.com.

It took me about a weekend to throw it together.

What would it have normally cost to build do you think?

Oh geez, I think if you hire a really good software developer that’ll cost you anywhere from $70,000 to $150,000 a year, and a project like that, traditionally, I would spit out in a few months. If you didn’t have access to those resources you could probably do it for $50,000.

What is bugmenot.com?

Bugmenot.com is something I started a few years ago where it was once again an annoyance that I was trying to fix. It allows users to share and find logins for websites that force you to register, free websites I should stress like the New York Times where you want to read an article. So users of bugmenot.com say I’ll just create a dummy account and share it with other people to use those details. It’s quite a popular service. [Stateless Systems also runs PDFmenot which is a similar service to get past PDF registration walls.]

And have you got into trouble for launching that?

There is a lot that can be said about it but I think the fundamental principal is that you can’t really copyright facts. And if anything it is the user who owns those login details. You often get vague legal threats but we are generally pretty obliging.

So if someone threatens you, you will take them off your site?

It is more if someone has a valid case. For example, there are sites like Twitter for example, there is no reason that someone would need a login for Twitter to access or read the information, so we will block stuff like that.

What about for subscription sites?

Paid subscriptions? We would block those for sure. It is mostly those free registrations and it seems pretty crazy but if you took a straw poll of say 10 people and say whenever you hit one of those registration sites, how many of you actually give real details and I think you’ll find that it is at least half would give fake details, which sort of invalidates the whole model in the first place. All they are collecting that information for in the first place, is to sell to advertisers to say “Look at our user base“.

They provide free content and sell advertising: that is their model.

It is a flawed model, which I think is the issue.