Hello everybody, this is Jason Calacanis.

This is CalacanisCast, I believe, Number 8.

 

We're still in Beta, but I have an executive producer now for the show. Steve Gillmor is executive producing the CalacanisCast. And we are going to go into the official CalacanisCast later this month. We are still in Beta trying to figure out what this show is and want you guys want out of it... and you've been sending great feedback.

 

As you guys know six of the first seven shows was me talking into a microphone, which is fun to do but not as fun for me as having my friends on the call and on the show. So today I wanted to try something a little different – we are on an 800# like one of those conference call systems and we are recording the call and with me is a guest co-host Paul Boutan.

 

Jason: Paul, How are you doing?

 

Paul Boutan: I'm doing great. It's great to be on, Jason.

 

Jason: And Paul of course is a famous journalist who rights for, among other things, Engaget ( engadget.com ) and Valleywag ( valleywag.com ). What other credits do you have Paul?

 

Paul: Umm... There's some little website called Slate ( slate.com ) that I've been writing for for about three years now...

 

Jason: Slate? So you write your really intelligent stuff on Slate?

 

Paul: Yeah, and then there's this sort of old-school print media magazine called Wired that I'm a contributing editor for.

 

Jason: Oh, yeah, I've become aware of “the” Wired. I think they've written about me once or twice.

 

Paul: But I have to say that I walk into Starbucks now and it's like “You're the guy from ValleyWag!”

 

Scott: Paul, I thought that was your pen name but you're really Nick Denton...

 

Jason: So, joining the call is our first guest Scott Heiferman. Scott, as many people know is the founder and CEO of the colossal concept and great website and service called meetup.com ! But previous to that he had started one of the web's first ad-buying agencies and creative agencies at iTraffic which he later sold to agency.com and before that he was partners in – oh wait were you partner's in SiteSpecific or did you just share the same apartment?

 

Scott: No, No we just shared an apartment that turned into an office.

 

Jason: Right so back in 1995 or '96 maybe, you were working with Seth Goldstein

 

Scott: We were roommates.

 

Jason: You were single in New York 1995-96, you guys were both starting creative agencies on the web... I was starting Silicon Alley Reporter at the time. We all were I guess 25 years old at the time of something like that and I guess previously you were working at Sony, right?

 

Scott: That's right, we crossed paths.

 

Jason: That's right because I was working at Sony back in the day. Mark Ghuneim, yourself, me and Gordon Gould were the Internet kids back when the Internet popped up back in 1994.

 

Wasn't that an incredible moment in time when there were four people at Sony who even knew what the Internet was? This is before had the website and they had all the meetings about “we should create a website and what would the website be?” - funny memories.

 

So tell us about... you know – some of the people who listen to this show really have no idea or they're not insiders in the industry necessarily, some are some aren't, but tell us exactly what meetup is and why you created it.

 

Scott: Well, actually before I do that, so who is listening Jason?

 

Jason: Who listens to the show? Well, I just got some statistics. The first 6 or 7 shows had 1,500 downloads each. We really haven't marketed them yet. But it's insiders, it's VCs, it's CEOs of companies, it's people who work in the industry and stuff like that. I get about 5-10,000 people a day who read my blog and they tend to be people in our industry... so you'll get a good number of people in our industry and you'll get a good number who are adjacent to it.

 

Scott: Good, good. Well, the short version of meetup is that it gives anyone the power to create their own community group. So were there isn't a mom's playgroup, people get to create their own – were there isn't a local environment community group, people get to create their own – were there's isn't a local small business chamber of commerce that gives small business owners a support group, in effect, they create their own – if there isn't a support group for some health condition they've got, and they really need support, they create their own... so we use the Internet to get people off the Internet and into a new community group that has real meeting and we believe in getting people away from all these screens and getting help and value and support and connections from the real world.

 

Jason: So unlike say eGroups, or Yahoo Groups, now, or Google Groups or a Usenet group, the goal now is not to just create communities online where people can discuss stuff...

 

Scott: Nope. It's America Off-Line baby!

 

Jason: the idea is to meet up off-line but use the Internet to coordinate that, right?

 

Scott: Yeah, that's it. We're crossing 3 million registered users and we're just about profitable... we are a New York-based company that just about is kind of beautifully under the radar of Silicon Valley and just doing our own thing and building a big business.

 

Jason: And... 3 million registered members... now they pay to use the service or is it free?

 

Scott: Every single meet up has a organizer paying, so we are not content... we're not, this is not the New York Times (what do they call their pay-for service?) Times Select... this isn't content, this isn't media, this is a service so like Craig's List where there is a sort of most people use it for free but some people pay for it that's the model with Meetup...

 

We went from free to fee 18 months ago – we pissed a lot of people off – lost half of our users and now we're much bigger than we ever were, we're making money, we're changing the world and we've got a model that doesn't rely on bowing to the almighty Google. We only have to kiss the ass of our community and our users and as sponsors play a part of it that's only when they make the meetups better, so we are all about just more meetups because that makes the world a better place!

 

Jason: So when you go on... there are no ads on the site obviously...

 

Scott: Well, we do do a little AdSense, but that's about eight percent of our revenue.

 

Jason: So, what it is like at the meeting when you go to your VCs or whatever and the advertising marketing is going off the charts and you say to them “I would like to lose half our users and have a paid service” I mean didn't you have a massive push-back from people saying you are insane?

 

Scott: Yeah, well, you know, the thing is that we are a, I mean, we've got a bizarre board that actually is into it and, so for example Pierre Omidyar is on our board.

 

Jason: Of eBay fame...

 

Scott: Yup, and he's not on many boards. And you don't have to convince Pierre of the value of having a service that aligns the value received with the value is being felt. You know eBay could've been... we don't have to go into...

 

Jason: Tell us about that idea about we're people are paying were they are receiving the value...

 

Scott: Yeah – you know – I'm going to go out on a limb here so for all of the people have these wonderful web services that people love, the board actually said... what I put forward here is that... well if they really love it, would they pay for it? Or is that love, kind of, you know, well we love it but we don't love it that much?

 

So we put ourselves out there and said we've got a great service and it's affecting lives and it's creating these community groups that are going to last for 40 years... is it just in our imagination or do they really love it? And it they really love it they'll pay for it. And then, again, you have to serve who pays you and Jason, I know you are a Dylan fan you know you've got to serve somebody so you've either got to serve the advertisers or you're gonna serve the your users and in some cases, you know, Google's got a great model because the relevance of the ads makes the service better...

 

Jason: Right, so maybe the dabble and maybe the lord, but you're gonna have to serve somebody. And also, I mean, what's interesting is since you serve the users that means by default if your service is not good then you know immediately. It really is the ultimate test, if they are willing to pay for it then it's good, if they're not willing to pay for it by default it's bad.

 

Scott: Yeah. You don't deserve to exist if people don't love your product and, in our case... and again it's not applicable to every kind of thing, but in our case when know that it's got to be good enough to pay for but the other thing, real quickly, the other element with us is that our problem was that people were creating too many meetups. There were creating too many meetups. They were creating a local poodle meet up and a local Republican meetup and the meetups, a lot of them are crap, and so...

 

Scott: And we said, here's the problem, and like a lot of Internet companies, our user experience was defined by the meet up organizers and if the meetups organizers weren't invested and they weren't there creating crappy meetups that they weren't committed to then our users were having a bad experience so by making the organizers pay we got all of the crust out of there and we went from having basically 90% crappy meetups to like 20% crappy meetups.

 

Jason: Right, because people are not going to put their credit card in if they are not going to actually do it.

 

Scott: Exactly. Seriously.

 

Paul: Scott, Let me jump in with a question: You did you figure out the price-point that would have that effect.

 

Scott: We literally... we really just... we pulled it out of our... we just made it up. We did do some, we had our star MBA on staff doing some research and doing some testing but the end of the day it was just all over the map of what we, or our perceptions of our users so we just basically said $19 bucks a month sounds good to me... and we just did it flat, no big meetups, small meetups, new meetups, old meetups, let's keep it simple = $19/month.

 

Paul: like 99 cents a song!

 

Jason: Seems like a reasonable price, I mean if you're trying to get a group together – if you're not willing to pay $19 then its probably the meetup is too tiny and not relevant enough to share with the entire meet up community, right?

 

Scott: Yeah, and also it's hard managing a business where you've got all different types of price-points and you try to keep the company simple and the whole model simple and the product simple and..

 

Jason: How many employees now and...?

 

Scott: We're just. We're 30 people... we are, we haven't really talked about this publicly but we're just about break even right now...

 

Jason: Isn't that a great position to be in as a company...?

 

Scott: And our revenue has, our revenue tripled this year and it grows on average 10-15% a month and we don't / without increasing our costs. So we've been about 30 people for a year or year and a half yet our revenue has like quadrupled in the past year and a half.

 

Jason: Fantastic.

 

Scott: So hopefully continue that and we're stable... you know it's all about being a sustainable thing that people make enough product that people love.

 

And if we can grow it, you know we are not waiting for our Knight in Shining Armor of Google to come knocking on our door – we are just... We've got a great office, a great team, great people, and it's just fun and we want to be in it for the long haul.

 

Jason: I think it's really refreshing to hear an old-school entrepreneur, I think this is like what – Paul, I'm sure since you're up in San Francisco, you hear all the time – isn't it interesting to talk to an old-school entrepreneur who is talking about sustainability, hitting break even, having people pay for value, creating value, as opposed to talking about like AJAX or folksonomies or this other crap. Or like...

 

Paul: Or somebody please buy me in the next six weeks...

 

Jason: It's like people are so... I mean when did getting bought become such like the goal? Isn't creating a sustainable real business the goal, I mean, you never hear people talk about it anymore. And you've been at this over four years now, right?

 

Scott: Meetup is over four years now, yeah.

 

Jason: I mean I'm looking at the Alexa graph right now it's just great, you know, you broke 10,000...

 

Jason: But wait, you know what's interesting about it is that you broke 10,000... I mean Alexa is flawed in some ways but it does get the trend generally right, to a point... You broke 10,000 you know in your first year... and then you broke 5,000 in your second year and then you broke into the top 1,000 in your third or fourth year... and you're just like cruising right now.

Scott: Yeah, you know the thing is that we, well we don't have to get into that, but our... you know of all of the metrics we track the web stuff is not even on the map for us. Out RSVPs quadrupled this year which, like the idea of, we like people to come to meetups that don't even use the website – in order I get my dad who's a 77-year-old guy who's never touched a computer in his life and he goes to a meet up Chicago and that's not on Alexa.

 

Jason: Yeah, and so the number who actually come to a meet up is the actual telling statistic, the number who RSVP, and whereas the web metric isn't as important.

 

Jason: You know, two things: 1 is I have a story about going to my first meetup and you and I have talked about this company for 3 or 4 years as we've been friends and I was a little skeptical at first. And I had this whole big debate with you about why the hell are you not putting advertising on it... advertising's a boom. You stuck to your guns and you made a really compelling case. Well, in business there's not a right or wrong answer: you're business could work with advertising as it could work with subscriptions and there are pros and cons to each I guess. It's probably more long-term sustainable and slower growth, but steady growth, with subscriptions and it would be more spiky with the advertising revenue...

 

Jason: I'm in L.A., I live in Santa Monica now, and there's a bulldog meet up and you guys know I have the bulldog “Toro” and I just subscribed to it because I'm checking out the site and I get these emails over and over again. Finally, my wife is like: You know there's this meet up this Saturday for bulldogs and it's right at this park around a mile from the house. I'm like Ok, we'll go t obrunch and we'll take the dog and we'll go check it out.

 

Jason: There is nothing that convinced me of this idea better than when I went over this hill, with my dog (I have it on video tape), and all of the sudden you see my dog's eyes light up and he starts charging down the hill and there are 30 bulldogs, I shit you not, in a pit jumping on each other, panting, wrestling. There is no chance that 30 bulldogs would be together with the exception of a breeder or, you now, when they were using them for bull-baiting and fighting in arenas, that you'd ever see this.

 

Scott: That's the kind of thing the Internet is for.

 

Jason: It really is like taking that experience when you go to a Usenet group or you find some weird blog that's about some vertical and you're like oh-my-god I can't believe this exists. Except in the real world. It is truly a revolutionary thing and its really stunning what you've built and sustainable.

 

Paul: As the token cyber-pundit let me jump in here. You know it used to be, what you just said, 20 years ago there used to be the occasional Usenet let's get together or The Well was famous for it's office parties we're people would become friends in the real world and end up dating or whatever.

 

But this is really for everyone now, a bulldog meetup, I hadn't thought of it before but my wife is a big fans of bulldogs and it hadn't occurred to me that there is probably a meet up where she can go meet some and find out if she really want to get one.

 

Jason: Absolutely.

 

Scott: Well one this thats popular is Toyota Prius meetups and people go to a Prius meet up on Saturday afternoon in the Home Depot parking lot in some city and they go just to, you know, because they're planning on getting a Prius and they just want to get advice and tips and get help their.

 

Because, what are you going to do? Are you going to read blogs are you going to go to the websites? There's something about face-to-face that's can't be replicated but it's all kinda part of the whole Internet ecosystem.

 

Paul: I mean, you just hit something very important in that there's nothing wrong with pressing the flesh and that's something that every politician understands. There's nothing like walking into a crowd and shaking hands. Going on-site and meeting people at their jobs and being out in public.

 

So I'm curious... I followed the whole Howard Dean thing for Slate back in the 2004 election. And I'm curious how the 2008 election is shaping up so far with meetups. What's the take among political organizers?

 

Scott: You know, It's gonna get interesting. It's gonna get very interesting. But there is that classic control issue which is: you give someone the power to do something, like create a local group and you have less control. But it's good. '08 is gonna be really interesting because this stuff is going to be taken to a whole new level.

 

Paul: Well I think you've hit it on the head. I found that the difference, when I looked into the organization, was Howard Dean was the guy saying "you tell me what my platform is... you guys get together and come back and tell me what you want". And I think it worked, and then when he washed out of the race, it was the standard media thing, the backlash: It was immediately discredited as if that had been a bad idea.

 

By contrast, the Bush campaign completely was the opposite, as you said, "we're going to tell you what the talking points are... we're going to tell you what you're going to go evangelize about and why you're going to vote for us, and why you're going to tell other people to vote for us". And I am looking forward to seeing how, once again, now that there's a presidential spot up for grabs, how are these two different approaches play out on meet-ups.

 

Scott: You talk about the meet-ups, but it even goes beyond. This might be the first campaign where a candidate raises a half billion dollars ($500 million) and you know that's not ludicrous. The idea of if let's say Obama jumps in, and catches a wave: You're gonna to have just entirely new dynamics and economics about a campaign.

 

But from the meetup perspective, it's not even about the money it's about saying that people are involved, they're engaged. The most important stat to me came out of meetup in the last presidential election was that this university did a study and they said that 50 percent of the 250,000 to 500,000 people that actually got off their butt and went to a political meetup said (50 percent said) they'd never been to a political meeting before in their life. What that means is that it engages and involves people in a new way which is what it's all about.

 

Jason: It let's people dip their toe, right? I started with the online stuff, I got into it a little bit, I felt safe. "OK, these people don't seem like total freaks, I'll go to somebody's house". Whereas if somebody just hands you a flyer and says "come to my house", you'd be like "what?" or “come to this bar, we're having a rally” and you'd be like "what?" I mean that's how they used to do it.

 

I guess it parallels online dating in that regard as well. People will look at this person online, they'll look at their page, they'll look at their ratings or whatever and they'll feel a little more comfortable.

 

Paul: I think the price point matters too because $19 for a meet-up sends the message that you isn't necessarily going to be where you're going walk in the door and be hit up for a $500 donation.

 

Scott: Just so you know, it's not $19 for people who go to the meetup, that's if you organize it.

 

Paul: I understand, but having had a very brief stint working with political organizers in Massachusetts a long time ago it was understood that when you get the flyer to go to So-and-So's house that when you get there they're going to want you to write a check. And I think the general brand of meetups is that it's a much more, as you said, a bunch of Prius drivers in the parking lot, it's not going to be a bunch of rich people and you're going to be embarrassed if you can't drop $500 on a plate for dinner.

 

That's where I think most people think they're completely cut out of the political process. They simply can't afford to be considered players, and maybe you're giving those of us who maybe don't even have $19 to start out own meetup a chance to go to someone else's and participate!

 

 

Jason: You know the thing that I don't get, I've been looking at this business for several years now... and it seems to me like there is this whole movement of grassroot events like the bar camps and the “un-events” that Dave Winer has been pioneering with other folks

 

Scott: “Un-conferences”

 

Jason: “Un-Conferences” etc. Why don't you do like ticketing fulfillment and let people buy tickets through the system? Have you just not gotten to that yet?

 

Scott: Well, you know, we do. We're part owned by eBay, as of a few months ago, so we integrate PayPal which works real well at meetup. For instance I'm the organizer of the “New York tech meet” up which has become the... but I charge $20 to come to my meet up every month and its this big demo-fest and we'll able to hire a caterer and have it in good, big places and... So yeah, about a 1/4 to 1/3 of all meetups actually charge.

 

Jason: How does it work, does the month go through you?

 

Scott: No, no. We just use the PayPal API so the organizer says it costs, for example, these are actual meetups: the “Jacksonville Great Dane meetup” is $3 a year whereas the “chemical analysts of New York meetup”, for investors and such, is $500 per year.

 

We just enable the organizers to set a price and the setup PayPal on their meet up group so the money goes directly between the member and the organizer and it doesn't go through us.

 

Jason: So, then, you don't make any money off of it but PayPal makes the money and that's why you did it.

 

Scott: Yeah, but as we can add value, which we certainly can, we're going to hope to be paid by adding value.

 

Jason: That's pretty, pretty awesome. How much of the company does eBay own?

 

Scott: It's a significant minority and it wasn't discolsed, but some people have figured it out.

 

Jason: Oh, because they backed it out from the FCC documents or something like that?

 

Scott: Yep.

 

Jason: Significant minority would be like 15% or...

 

Scott: No, no. I mean is its significantly small.

 

Jason: Significantly small. Alright, we this is a very interesting. I know you've got a meeting...

 

Scott: What's up with you Jason? This news is pretty interesting.

 

Jason: Me? This is my show I ask the questions... there is no interviewing the host. What's up with me? I'm an entrepreneur-in-residence or rather an entrepreneur-in-action at Sequoia.

 

Scott: What does that mean?

 

Jason: We're figuring that out. No, it basically means that I'm going to start another company and I'm doing it with Sequoia and I'm figuring out what that company will be and it could be an existing company that's out there that I would become CEO of or it could be a new company. So,basically I'm taking my time and I'm considering all of the different possibilities out there.

 

You guys know what I'm interested in so what I blog about is what I'm interested in and I'm looking at those opportunities.

 

Scott: Very good.

 

Jason: I could be a politician huh?

 

Jason: So, Scott Heiferman: thanks for being on the show. Ten years later we're all still at this.

 

Scott: Yeah, you know the last time I was on a radio show, an audio show, with you was sitting at the Psuedo.com studios in probably '96

'97?

 

Jason: Probably '97. I started Silicon Alley Reporter in '96 and I started the show in '97 so...

 

Scott: So it's almost 10 years now and we'll do another one in about 10 years, OK?

 

Jason: Yeah, in about 10 year swhen you're the CEO of eBay and I'm unemployed and looking for a job so I'll hit you up to do a radio show.

 

Scott: Will you be CEO of AOL by then?

 

Jason: Yeah, exactly... you know what? It was a very educational year. It's good to be at a big company once in a while, you learn a lot. So, again, thank you so much for doing this Scott Heiferman. Continued success with meetup.com. Everybody out there go checkout meetup.com, start a group, why not try it, $20, start a group for $20 about a TV show about your dog or go to a couple and definitely that's free, right? You just sign up for free and if you want to start a group it's $19 a month.

 

Scott: Thank you Jason! Thank you Paul!