A new startup model for ambitious people who want to improve the world
It's being pioneered by Ghost, the not-for-profit... startup!
Last month, I made a productive use of my quarantine time - I created my personal website!
Here’s a tour in this Twitter thread:
I made this website by self-hosting Ghost on a Digital Ocean droplet (with the help of this amazingly thorough guide).
“What is Ghost?”
Simply put, Ghost is a Wordpress alternative for people who want to build a website to publish articles.
By self-hosting Ghost on my own (rented) server, I was able to reduce the monthly cost from $30 to $6!
“How did I do that?”
I was able to do this because Ghost is open-source. Meaning that all of their software is available for free to anyone who wants it. People are free to copy it, use it, even commercialise it for their personal gains.
“But then, how is it a startup? What’s their business here?”
It might seem as if they are giving away everything for free but, no.
They are only giving away the product for free. And product isn’t the only thing that you need as a customer. For this product, you will also need to host the software on a server. You’ll want to keep it up-to-date. You might also need technical support when things go awry once a while.
That is the service that Ghost provides for a fee of $30/month (basic). They provide managed hosting for their paying customers.
They have built a sustainable business around a free core application, funded by a premium platform as a service to run it on. So, it’s something like software-as-a-service model with the software available for free to anyone who wants it.
But that’s not all. Ghost does all this because it is a “non-profit foundation on a mission to make free, open source publishing tools for independent publishers.”
Startup + publishing + non-profit - not a common combination, right?
It got me super intrigued to learn more.
That’s why I decided to dive deeper into understanding Ghost. Now, let me show you what I found…
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Here’s what became a cool surfing story:
I started by checking out different pages of the Ghost website, starting with their home page which quickly took me to its About page -
About Ghost - The Open-Source Publishing platform
I have found that the “About” page of a website is the best place to start your dive. This time it told me the story of Ghost.
We're a proud non-profit organisation building open source technology for journalism.
It is a 7 year old company, its annual revenue (ARR) is ~$2 million and it is growing at a rate of 50% per annum!
I think it would be a sweet deal for a lot of investors but alas…
“Our legal constitution ensures that the company can never be bought or sold, and one hundred percent of our revenue is reinvested into the product and the community.”
So, all this fast growth and revenue can only be used to drive one purpose - create better publishing tools for the world.
Now focus on this part - “one hundred percent of our revenue is reinvested into the product and the community.” - does this sound familiar?
There’s another company whose founder is known for being singular minded about customers. It’s not a non-profit or a startup. It’s a publicly traded for-profit tech giant.
It’s called Amazon! This was a startling similarity to me. I’ll talk more about it towards the end.
Why you should dive deeper:
* To see the section that has the people behind Ghost - their roles, their photos, their mix of nationalities. It’s especially interesting considering that the Ghost Team is fully remote, spread all over the world, covering 4 continents, 5 nationalities and 6 languages!
Announcing Ghost 3.0 - The story behind raising $5m
“About 6 years ago we came up with an unconventional funding idea. We decided that rather than selling share capital and control of a business in return for money to operate, we would instead sell goods and services in return for money to operate. As a result of this choice, we were very fortunate to attract some of the world's most forward thinking investors to help steer the company: Our customers.
To date, Ghost has made $5,000,000 in customer revenue whilst maintaining complete independence and giving away 0% of the business.”
Hahha, that was clever! (Note to self - that is one genius marketing brain)
I stumbled upon this article when I was checking out the Ghost website, trying to learn more about it. It’s their recent announcement of a new major version release - Ghost 3.0.
What strikes me is how ambitious this release is -
“We'd done a reasonable job of creating a new publishing tool which was much better to use than the alternatives, but we felt like we were missing out on solving a real, pressing need of modern publishers.”
Solving big, real problems for customers - that’s something I’ve heard in podcasts of VCs and startup founders. It was surprising to see how similar Ghost is in terms of ambition.
This release tries to solve the problem of letting struggling publishers create viable business around their content.
“Ghost is the first totally independent product out there with publishing<>subscriptions deeply integrated at the core, allowing anyone to build a recurring revenue subscription business.”
Why you should dive deeper:
* To read about the tech behind it. The article goes to great lengths in describing how they are following what seems to be a major revolution in how web based products are built - the JAMstack movement. If you are interested, this article is a great reason for you to educate yourself on this.
Ghost 3.0, An Interview with Ghost CEO John O’Nolan, Stratechery
I found this interview linked to in the announcement article that I talked about above.
Their conversation is centered around the latest release of Ghost that allows subscriptions and is flavoured with Ben Thompson’s (the interviewer) curiosity about Ghost’s unique business model.
The interview starts with John O’Nolan explaining how he used to be a core contributor to Wordpress (which is open-source, too) and how it led him to develop the vision for Ghost.
What I noticed back in 2012 was that WordPress was evolving more towards the site builder space, but my interest has always been very closely in the publishing space.
This led John to build Ghost by forking (copying) Wordpress and iterating on a light-weight Wordpress clone. He was able to do that because Wordpress is open-source (benefits of open-source, right!?).
Ben asks John about his motivation for building Ghost, something that I had been wondering myself!
Ben: So what is the motivation here? I don’t get the impression you’re going to get rich doing this, so what is the driving force to offer what seems to be almost a too-good-to-be-true deal for publishers?
John: Ghost is at the intersection of all of the things that I love. We’ve managed to create a globally-distributed company which gives us the freedom to live lives we enjoy, the ability to work on a product that feels meaningful, in a market [sic] feels like it needs us and to me that’s enough. So my long term goal is for this to be a company and a product which is around for fifty, a hundred years. I’ve deliberately structured it at every juncture in a way to try and prevent myself from becoming enormously wealthy from it because I feel like the more my interests align with the customer’s interests, the more likely the business is to serve the interests of its users and not just focus on whatever is necessary to raise the next largest round or get the biggest acquisition number. My personal interest is deeply in publishing, it’s deeply in journalism, it’s deeply in seeing independent voices be able to have something meaningful to say in the world and to be able to sustain themselves doing it, and that’s what we optimize most of our product and business decisions around.
This makes me wanna support Ghost, as well. The publishing world has just as much to gain with Ghost’s success as its founder does. I want Ghost to be successful because it translates into the success of publishing and… publishing only!
Why you should dive deeper:
* Stratechery, the publication that hosted this interview, has pioneered the subscription business model and is now cited as a role model by a lot of startups who want to disrupt this space. With Stratechery, Ben Thompson provides a high quality analysis of the strategy and business side of technology and media, and the impact of technology on society to his subscribers. This interview is no different.
* As Ghost tries to enter the subscription market, its direct competitors are Substack and Memberful (which hosts Stratechery!). They have both raised venture capital directly or indirectly. In this interview, Ben asks John some difficult questions around the sustainability of Ghost in this tough landscape and what makes Ghost better than the alternatives.
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My Takeaway:
I see this uncanny resemblance between John O’Nolan’s Ghost and Jeff Bezos’s Amazon. They are both focussed with a similar spirit - reinvesting all profits back into the company to put customers first.
Rather than take profits and issue dividends, which Bezos specifies as Amazon’s “fundamental measure” of success, the company aggressively re-invests in new growth. Amazon’s value has climbed as investors have rewarded this strategy, enticed by the promise of even greater dividends when the company’s greater ambitions are realized. Management has been characteristically secretive about what that might be.
How Amazon is Beating Antitrust Before it Happens, Palladium Magazine
The difference between Amazon and Ghost lies in the fundamental structure of the two companies. One is customer-focussed because of the will of an exceptionally visionary founder and the other, by default.
That’s why, I believe that along with innovating the publishing space, Ghost is also venturing into a new (or old, perhaps?) model for thinking about making a change in the world. It may just become a new role-model for the ambitious people who want to positively change the world.
It is a model that does not endow the founder with exceptional riches for their exceptional hardwork and risk-taking ability. It only endows them with the gratification for changing the world in a way they wanted to.
I think it’s a path atleast some future founders will prefer. And I think that the ones that do so, will get the faith and support of the world in them like no VC-funded startup can.
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That’s all from me for now!
I’ll send you another email when I find something similarly amazing in one of my web surfing sessions. Only when I find something with a long half-life. So, you don’t have to worry about clutter in your inbox! ;)
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