Dear Tim,

I've been a programmer for about ten years. I had heard of O'Reilly books, then known to me as the books with the animals on the covers. They had a good reputation, but for some reason I thought they were too expensive. About five years ago, I realized if I was serious about my career and getting my work done, there was no way I could not have them. Now I consider O'Reilly books, and a few others of good quality, terrific bargains. Luckily there's been an O'Reilly book for almost every topic I've needed. Thank you.

I also have another reason to write, and I apologize in advance as I invoke the words that may possibly be one of the great banes to news and discussion groups everywhere. You see, I have this school project, and I was wondering if you could help me with it.

I'm attending North Shore Community College north of Boston, and I'm enrolled in their new e-commerce certificate program. One of my current courses is "E-Business Models and Strategies." As you can imagine, we examine different companies and their business models to try and learn more about the nature of the Internet and World Wide Web and what makes their approaches successful (or not!).

One project is for each of us to choose a company, analyze it, and make a presentation. I chose O'Reilly immediately for two reasons: my affinity for your products and the complex nature and relationship O'Reilly has with its users and the technical community. What follows is a series of questions. I'd be honored and appreciative if you had time to answer them.

Dave Heisler

Dave,

You might be amazed at how many requests for help with school projects I get; I ignore most of these requests because they want someone else to do their work for them. But in this case, since O'Reilly is the actual subject of the work, it makes a lot of sense to help out. I'm sorry I've been so long in responding. I hope it's not too late to be of use to you.

Sara Winge, my VP of Corporate Communications, took a first cut at the answers below, and then I expanded on them. So if you're giving credit, you should be sure to include her. (She did her part back at the beginning of the month, so she at least was timely.)

Tim

Dave

Your Web site is tremendously complex now, incorporating not only your technical books but also such things as columns, press releases, forums, elists, events, etc. Did this complexity grow out of design or was it more organic?

Tim

We decided early on to have a site that was more than an online catalog. As you may know, we created the Global Network Navigator (GNN), the first Web portal/catalog/magazine. GNN was inspired by our book The Whole Internet User's Guide & Catalog. So when we built www.oreilly.com, we had an understanding of Web publishing that went beyond that of a typical book publisher. And we've always been inclined to share information with our readers, so it was only natural to pass along news and the views of our editors and authors. (Today, www.oreilly.com gets over 1 million unique visitors a month.)

Another factor was our whole approach to marketing, which was profoundly shaped by Brian Erwin, who started at the company in 1992, and eventually became our VP of Sales and Marketing, a position he held until 1999. Brian was the former director of activism for the Sierra Club, and he quickly got us to see that the best way to market our products was to market the big ideas behind them. Brian came on about the time we published The Whole Internet User's Guide & Catalog, and together we set out to market not the book but the Internet itself. That led to a kind of technology activism that has been central to our approach ever since. We had always seen ourselves as the technical voice of a community, capturing the knowledge of experts and passing it on, but Brian helped us to see ourselves as a voice that could reach out to others outside the community as well. Ever since, we've tried to shape the dialogue as well as report on it.

We were instrumental in spreading the early gospel of the Web, which Dale Dougherty (who started GNN and now heads the O'Reilly Network) had put on our radar. One of the early NCSA Mosaic developers said that NCSA first learned of the Web from a piece of O'Reilly direct marketing. We were that early.

Our role in spreading the word about Perl and open source is well known. More recently, we've been involved in fighting bad software patents and in exploring Peer-to-Peer Networking.

Dave

Many business models seem to center upon the idea of community as a key success factor for a Web site and the company as well. O'Reilly is involved with standards committees, movements, conferences, etc., which I believe has built a tremendous community. How far can one go with this?

Tim

As far as you want to! Seriously, community involvement is a key tenet of our business. Through our connection with technology communities, we stay in tune with our customers, hear about interesting emerging technologies, and in fact influence the course of the technologies we cover. Plus, it's more interesting and rewarding to be a part of something bigger than your business.

But you can't fake community involvement over the long haul. It only works if the community as well as your company benefits. And if you don't really understand the communities you're working with, you can easily look foolish or greedy. Our customers have excellent BS detectors, and we're glad they do!

Dave

Does your Web site pay for itself in a direct manner? Is it important for it to do so? Are companies expecting too much from their Web sites?

Tim

We're quite confident that our Web site builds sales, both through direct Web sales and through engaging and informing our customers. Several bookstores have told us about customers coming into their stores to buy O'Reilly books, clutching a printout of a page from our site. Our Web site is tightly integrated with our other marketing activities--it's part of our overall outreach strategy, and as such isn't treated only as a separate business unit.

In addition to the direct sales we get from our site (which are themselves probably sufficient to fund the site), there are some commerce elements that are not visible to the casual visitor. Our site feeds content to "O'Reilly Bookstores" on amazon.com, bn.com, fatbrain.com, and other online resellers. Our oreilly.com Web site effectively promotes our conferences and the ad-supported sites (like xml.com) in the O'Reilly Network.

As for whether companies are expecting too much from their sites, I can only say that I see a lot of poorly focused and designed sites that probably don't serve the sponsoring companies or their customers. But that's true of the Web as well. How much bad advertising do you see in every medium?

Dave

You've spun off and sold a number of companies. Do you feel that was key to your success in raising capital?

Tim

Yes, although we didn't create any of those spinoffs for the express purpose of selling them at a profit. Instead, we "followed our noses," getting involved in businesses that seemed interesting and important, and happily, the market agreed with us.

But perhaps I'm misunderstanding your question. We haven't "raised capital" in a traditional sense. O'Reilly is still a completely private company, with no outside investors. It was started with $500 worth of used furniture and a lot of sweat equity. But a fast growing company always outruns its cash, and unless it's extraordinarily profitable, even its borrowing power. So you could say that those spinouts and equity events have been the way that we have raised capital. If we hadn't done them, we would have had to raise capital in more traditional ways.

We've done a lot of other creative things to use "other people's money" (as they say in Silicon Valley). For example, several of our international companies were started as joint ventures, with the partner (International Thomson) putting up all the capital. Eventually, we were able to buy them out. (We did this with the proceeds of the GNN sale. But this was a way of "doing it with mirrors," as my father-in-law used to say.)

Dave

It seems in general that the focus of O'Reilly has shifted somewhat from the "nuts and bolts" of technology to a larger vision of things. Take the open source movement for example. Has that always been a goal, or has that developed naturally?

Tim

Our open source advocacy grew naturally from our involvement with open source communities and the technologies they developed.

For example, my early PR efforts on behalf of open source were sparked by the immense press coverage of Microsoft's ActiveX (which no one was using) and the lack of any coverage of Perl (which our book sales indicated was a core Internet technology). I saw an injustice, realized that open source communities had no PR machine at their disposal, and started making noise on their behalf.

A core principle of O'Reilly has always been to "do the right thing." As the company has grown, we've had a larger platform for advocating technology issues. But as I noted above, this is also good marketing. So it's one of those great cases where, like Ben and Jerry say, you can "do well by doing good."

Dave

Some feel private enterprise should not be involved at all with setting technical standards, etc. As O'Reilly expands its software offerings, do you see that as a possible conflict with your current participation in conferences, etc.?

Tim

As long as the standards bodies are open and inclusive, we don't think it's at all a bad thing for private enterprise to participate. When corporations try to take too much control, as Intel recently did with its P2P Working Group, we encourage the community to push back. (In fact, I raised the alarm at Intel's last meeting, and changed the course of that standards process.)

In fact, it's hard to imagine how standards could get built if private companies didn't participate! That being said, I like it when companies participate by sponsoring their engineers and letting those engineers make technical decisions, rather than forcing them to follow a company line. There's a lot of evidence that this can work. Cisco's engineers at the IETF are often just as motivated by doing the right thing as engineers from the university community. But there are also many cases where companies have tried to influence the direction of standards.

Dave

I have found that once in a while someone other than O'Reilly will publish a technical book that seems to match or maybe even exceed what we've been used to with your books. Are your competitors learning your lesson? Is there an overall O'Reilly lesson to be learned?

Tim

In the last few years, as we've grown from an upstart to a major computer book publisher, we've certainly noticed that our competitors are trying hard to copy us. That's good for consumers, and it's good for us, because it's added incentive to hew to our high standards. We've always been explicit about "the O'Reilly way." It means authors and editors who really understand and use the technology they write about. It means a focus on what's useful. And it means an ongoing conversation with our customers. Plus, we don't buy into many of the publishing world's assumptions. (See our History & Company Overview.)

I will also say that it's tough to keep up quality as we grow. I used to be able to personally read and vet every book we publish. I can't do that any more. So the focus has to change from applying myself to the direct supervision of products to training and standard-setting for others. In some sense, the company is now my product. That's a hard transition for many entrepreneurs to make. But as Harold Geneen said, "The skill of managing is to achieve your objectives through the efforts of others." I'm still pretty hands-on (for example, I recently finished putting together the program for our upcoming Peer-to-Peer Conference), but I need to be less so. Hiring, training, and inspiring others needs to be my main job now. That and being a public spokesman for the company and our customers.

Dave

Some free online technical documentation, such as what's available for Java, is becoming better. Could we see collaborative efforts for documentation, like what we saw with the development of Linux? Or will there always be a place for the traditional services a publishing company offers?

Tim

It's certainly possible. That being said, I do think there are some differences between software and documentation. To some extent, people write free software to "scratch their own itch," to solve a problem they have. The very best developers realize that documentation is a key part of the user interface for the product, and they don't do without it. But a lot of documentation is written to scratch someone else's itch. If you already know the product well enough to write a book, you probably don't need the book yourself.

In addition, people don't realize how much work good documentation is. I think the ideal is for a project to produce a certain level of documentation. (I think the man page was as central to the success of UNIX/Linux as any license. I'd probably take Windows with a man page for every DLL over an undocumented Windows under the GPL!) But a book is a different product entirely. I've addressed this at greater length in a number of Ask Tim columns, including Open Source and OpenGL and Wandering into the beaten path.

Dave

Thanks.

Tim

You're welcome.