Need Your Input Regarding Thoughts and Future Plans for This BBS!

[Wayne 962]

Okay, I often sollicit ideas from you guys because this forum is indeed a community (not a democracy, but a community). I am still the evil dictator around here. I prefer to think of myself as an enlightened despot, for those of you who remember your European history.

Well, now I'd like your opinion. I rarely disclose Pelican's business plans on this board, but my competitors never really seem to know what's going on here, so I figured this one wouldn't hurt.

Regarding our BMW site. We're going to be re-launching our BMW site and separating it from the Porsche side completely within a few months. This combined with the new book (101 Projects for Your BMW 3-Series) that I will be working on (don't worry, I'll have the 911 engine book done way before then) should give our site a boost using a similar formula that we've developed for the Porsche side.

The one big question is the BBS. Creating a community like this one is tough, and it requires a long time and a lot of patience. Also a lot of subtle luring to get people here. The more people here, the faster the community grows, etc.

Bottomline is, I'm thinking of purchasing one of the existing BMW fourm sites. I'll probably approach all of them at one time to see who is interested.

What do you think a BBS like this is worth? To most people, the BBSs are a financial drain, and don't generate any income. The pure business model is terrible. To the right person (like me), it can be an invaluable tool for learning and promotion. There is probably no potential buyers of BBSs out there, so it makes my job easier. But, the running of most BBSs is a hobby-thing, which makes my job harder. It's like pulling someone over on the road, and asking them to sell their Porsche, which they have 1000 hours and 1000s of dollars invested (but is only worth market value).

This wouldn't affect this BBS at all - I would have it run completely separately on a different box.

What do you think? What is a BBS worth? Is it better to start from scratch? If I purchased someone else's creation, do you think that a vast majority of people would leave (I wouldn't do any major changes for a long time). Do you think it would be a good investment, or a big drain and liability.

Everyone here has an opinion, I'm curious as to yours...

Thanks,

Wayne

[clnilsen]

Wayne:

This is an interesting question. I would answer it something like the purchase of a represntitive sales business. You are only buying a client list.

So, the value of the list is the combination of the contribution (in $$) of each member of the list, the number of people on the list, and how likely they are to stay with you (the buyer).

So from your point of view I would say your BBS purchase value would be:

Expected earnings per person x N number of People x
% Expected rentention

Though I wouldn't even venture a guess on what these numbers would be for you, I think you could probably plug in a revenue per user from this board, the number of users would be from any board you're looking at buying, and then you could play with the retention rate.

The last variable would then be : how hard would it be to build a similar clientele? Well, again, you can look at what you have right now. The Porsche BBS is running high, and the BMW board is flagging. Could you get more users by posting a big ad in the Roundel? Or by your 101 projects book, would you be able to bring people in? My suspicions would be it would be tough to hit the critical mass point without some seeding traffic . i.e. if you look at your site right now, there is just not a lot of traffic. The other side of the coin would be: if you eliminate the biggest "competitor" it creates room in the market for your site.

I realize I haven't really answered any of your question, but I hope I at least gave you some framework to quantitatively answer your question.

Good luck! I'm curious to see how this plays out!

Chuck

[Wayne 962]

Right, I have to weigh the costs of advertising and the efforts of creating that critical mass versus the cost of purchasing a viable entity. We're talking about items that haven't been bought or sold before (as far as I know) so the valuations are real sketchy. If it costs X dollars to run X amounts of ads and get XXXX amount of people, should that be the cost? As you mentioned before, revenue per subscriber would be a good number to have - HA! As if I could measure that quantitatively.

A lot of business is just good guessing based on intuition and past experience. How much is a BBS worth? To most people, it's not a useful entity, but to the right person, it could be worth something.

Tough questions to grapple with, as there is no real precident for this...

-Wayne

[Joeaksa]

Wayne,

Instead of purchasing a BBS outright, how about approaching one or more of them and asking if they would like a partner?

As you said, they rarely make money and most are done as a benefit to the owners of the cars. You could purchase part of the BBS (hopefully 51%) and work together with them, using the Porsche BBS as a model.

Just an idea...

Joe

[Jack Olsen]

From a user's point of view, the key components of a good BBS are the handful of cornerstone members who give the board its character. Pelican started out with just you, Wayne, but gradually attracted a handful of experts who were also very generous with their time (Warren, Roland, John Walker, etc.).

And even that is only part of the recipe. You need a good mix of personalities to make a BBS compelling enough to visit regularly. In addition to the expert voices, we have issue-specific experts, model-specific experts, guys who are simply funny, guys who are simply bright and interested, and guys like me, who simply spend a lot of time at their computers.

A lot of from-scratch BBS's never get that critical mass of the correct mix of experts, enthusiasts, novices and personalities. So I can see that the attraction of getting a BBS that has already 'taken root,' as it were. The danger is that you could be perceived as the big bad outsider who's barged in to declare hismelf, commercially and intellectually, the boss. You could buy the BBS, but lose the members who give it its vitality.

What's more, it doesn't take much to bring one of these things down. When I was first considering getting a 911, the Early S Registry was a pretty lively place. One guy brought it down pretty much single-handedly. It's come back, more recently -- but as a casual user at the time, I simply decided the conflict and the BS was too annoying to justify my time, and I moved on.

Once a BBS gets going, it can be pretty robust. This one qualifies as a giant, now. But there were times in the past two years, even, where if you had pulled the involvement of a handful of guys, I think it could easily have begun a terminal decline.

So, while I don't know a thing about the economic value of a BBS like this, my thinking would be that you should get in touch with not just the owners of the successful BMW BBS's, but also the key players on them. Make sure your role is as an enthusiast, a facilitator and an enabler, above all else. Anyone can buy a think tank, but it takes a smart guy to do so in a way that doesn't scare off the thinkers.

Alternately, if you could create some sort of regularly-scheduled online event -- I have no idea what this would be -- but something that would lure the cornerstone experts and enthusiasts away from the other boards for a limited, and pre-specified, time. You might be able to do this without having to buy anyone's actual BBS. Again, the key is to get the right guys in the room at the same time. Like the German Autofest, Hershey, the R Gruppe event or Dunkel's, you can get everyone out of the woodwork if you have something worth promoting, and then actually promoting it. If you had an online issue-specific tech session once a month, which just happened to bring BMW guys into the lounge of your BBS, you might be able to put the pieces together from that, so long as (again) the event was worthwhile and the right people were invited and included.

All right, I've used up a lot of bandwidth here avoiding my own work and making it clear that I don't have an answer to the one specific question you asked. Hope that helped, though.

[Jack Olsen]

One other model of how to draw people in. Tracquest is Todd Serota's track event group. He has a discussion area on his site that's actually run (I think) by Rennlist. His little corner of the BBS regularly draws flare-ups of use whenever he hosts one of his events. Guys want to talk about the event before it happens, and they they want to talk about it once it's taken place. Rennlist doesn't do much of anything to cross-promote, off of Todd's board, but it certainly could. If you hosted discussion areas off of the sites of various BMW track groups, you could also have your own broader-interest BBS featured at the top of each page of the group/event-specific BBS.

When they run out of stuff to read in the local discussion, guys would click over onto the bigger board.

[GoodMojo]

Just looking at it from a difference perspective- Does the site in question already have/sponsor an existing supplier that you'll be replacing? If so, is the supplier well established with the board members and has a loyal following? For example, if someone else bought up the Pelican Parts board and replaced Pelican Parts with Joe Porsche Supplier, the new owner will probably have a large hurdle to overcome in order to rebuild customer trust.

If not, would it be possible to set up a partnership with the current board owner where he/she continues to operate the board but integrates Pelican into the parts side of things for a while until the board gets "comfortable" with Pelican, esp when your rep as a reputable Porsche parts supplier gets around? The downside to this is that unless you strike out a deal with the current owner in the beginning, you might not be able to acquire the board cheaply after the fact if things work out well.

Any idea of the traffic the BMW board gets? It may be interesting to find out what the # of unique visitors the site gets and if the board already has a parts supplier/storefront, the ratio of purchases to customers, purchases to returning customers, etc.


-Wade
'88 Slant Coupe

[Wayne 962]

I don't have a specific board in mind. I'm looking at all of them as potential 'partners.' Jack is right - the board is a collective think tank.

As I have learned, the traffic is only one part of the equation. If I did this plan, I would have to have the full cooperation of the current owner(s) and key people on the board. To come in and change the sign overnight would be a bad thing. I figure it would take at least a year for a good transition, particularly if the people on the board have never heard of me or Pelican.

Most boards have multiple 'banner ad' type sponsors. Some are competitors, and some are manufacturers. I'd probably let the manufacturers stay on as board sponsors without having to pay a fee.

I'd basically like to re-create the Pelican BBS that we have here on the BMW side. I've been very subtle with changes around here, and would be similarly deposed on the BMW side...

-Wayne

[Jandrews]

Some good points already articulated here, but I will add my opinion...

Wayne, in your second reply in this thread you elude to the fact you are not able to quantitatively associate revenue back to the users of this board. I find that surprising, and would suggest that you are potentially missing a large opportunity as a result. I have some experience in the Customer Relationship Marketing "CRM" field, and I have often wondered what you actually know about your customers. For instance, I have been a member of this BBS since April of 2000, and yet when I purchase things from Pelican, or even interact with you on e-mail, you refer me to the board as if I have never heard of it. In my business this is analogous to offering one of your customers a product of yours that they already have! This is insulting and disconcerting for a lot of service industry customers.

So, my point is, you MUST know who is visiting your site, how valuable they are, and what you should do to ensure that they keep coming back. This can and should be done at the individual customer level. Some simple database work can provide huge insights into your customer base, their behaviors, propensity to purchase, and how/if you should maintain the existing business relationship with them. The same applies to new prospects who have never shopped at Pelican before, and would definitely apply when pondering the acquisition of a whole new pool of "subscribers".

CRM is a fairly complex strategy, but a little common sense goes a long way. Think of how on-line, or even telephone businesses cater to you when you approach them. There are always many surprising attributes of customers when you start to segment them and predict future behavior.

You have an amazing community here, and as someone above said, it is a complex combination of experts, personalities, enthusiasts and a great community leader that really make Pelican stand out where others fade.

My two cents....


JA

[island911]

I think Jack nailed it in his first 3+ sentances.
At least he hit on my thoughts about it.
About all I can add is; buying a BBS is like buying someones baby.
It could be priceless to the parent.
It could have a parent pining to get out of the responsiblity of the day to day care, but still wants their baby to succeed.
It could get suddenly sick and die.

So Wayne, with your experience, you are going to be by far the best judge on "having your own" or adopting.

[Bill Douglas]

From a practical point of view, or from the point of view of TheComputerGuy (my business name), buying an existing BBS may mean it's setup in a different way with different software, maybe different operating system, and become twice the work. If you setup another one in parallel with this one it won't be much more work at all, then give it time (and a few incentives ) for people to migrate across. Admittedly I’m basing this on having worked for banks that have bought other banks and unsuccessfully tried to run both systems. I know a BBS is different but the concepts are the same.

[Wayne 962]

Jandrews:

HA! That's funny! Most of the people on this board have usernames, which I cannot trace back to actual orders. In fact, the only link I might have is through email addresses. I just looked up your email address on the board, and then searched our database - you weren't in it.

So, even if you had ordered $100,000 worth of parts, I cannot link you to the BBS, because this BBS is mostly anonymous... There are like 5 J Andrews in the database. If you send me an email, how on earth can I know who you are? The only way is with super-tight integration with the BBS - the software that I did not write (nor do I want to write).

How am I possibly to know if you are on this board? You don't use your real name, and you don't use the same email address? Cross-referencing this type of data is very difficult.

As for sending me (or us) email, we get about 200-300 emails a day. We currently use Microsoft Exchange and Outlook to handle email. CRM never really took off (a lot of dot-coms have gone bankrupt on CRM) because indeed it is difficult and requires intense coordination. I am working on an email system that will integrate with our ordering system, but I can indeed only do so much (gotta finish this book first)...

I do appreciate your comments, but I think your assumption that integrating everything together would be a snap is very unrealistic. In fact, we have one of the tightest, integrated systems around (for a parts dealer). Heck, no one else even has a BBS!



I realize the potential for this, but I have to weight it against other things that occupy my time (like expanding product offerings, expanding the catalog and website, etc.). There are so many projects around here. Not to mention the growing-pains problems (like how I have to buy a new phone system now because we've outgrown our old one. Do you know how much research you have to do to buy a phone system? Gazillions of hours. T1, PRI codes, DID lines? What the heck?)

Comments are certainly appreciated - just trying to give more of a view of the big picture...

-Wayne

[Wayne 962]

Bill,

There is more than one BMW BBS out there that is running the same vBulletin software. Integration with our current setup would indeed be a very important element, and key in a decision.

I'm curious, what is a stand-alone BBS worth? $5K, $25K, $50K?

I'm sure if you asked someone 2 years ago during the dot-com boom, they would have said $1 million!



-Wayne

[Paul_Heery]

Wayne -

As you investigate further I believe that you will find that most BBSs are run by "hobbyists" for "the fun of it". They are not in it as a business, it is just a pasttime that has gotten out of hand.

Speaking from experience (I ran a an extremely popular BBS for over three years), the economic reality that a BBS owner faces is cost, not worth. The cost of hosting and bandwidth escalates as the forum becomes more popular. To a point where you are almost afraid of success. Towards the end, I was facing $1,000 monthly bills to run the site. Sure, I was able to sell banner ads to help offset the cost, but this was difficult and almost allowed me to break even.

So, I think that you need to look at it from the perspective of the BBS owner. The realities are:

Minimal Income - High Costs + Hard Work = A Big Pain in the Ass

To make a long story short, I did sell my BBS. I received an offer from someone that wanted to market to my audience. I took the money and ran as fast as I could. However, I would have handed it over for nothing if the buyer had just offered to handle operations and expenses. BTW, it still is in operation today.

My recommendation to you would be to find the most active BMW BBSs, make an offer to take over operations and expenses and allow the current owner to stay on as "resident guru" (that's what he wanted in the first place anyway). Throw in a Pelican T-Shirt and an oil filter and I think you may close the deal.

[LeeH]

Business valuation is very tricky. Opinions vary by amazing amounts. When my partner and I decided to sell our business one broker told us it was worth $750K. Another said it would sell for almost twice that! Not only did the second guy get the listing, but he was right about the price!

By most standards a BBS is going to be light on hard assets. Some multiple of cashflow is a likely valuation method. The challenge is coming up with the proper multiple for this type of business. You might call a business broker who does valuations and see if you can pinpoint the industry standard for how this sort of business is valued. Of course the next challenge is varifying the seller's cashflow claims. If there's no documentation then it doesn't exist.

Anyway you look at it, it's a business. It has to be making somebody some money (or have sellable assets) if it's going to be worth anything at all.

[cary]

Not a clue on the value of a BBS. I would base it on a revenue stream.

But I have a question, after reading the latest GrassRoots Motorsports. Are BMW guys a DIY bunch ?

It seems DIY is what drives the mass of this BBS. Which in turn should generate sales for Pelican Parts.
So if the BMW guys don't work on their own cars. I don't think you could re-create what we have here.

If they do. Find the BBS with the most DIY posts.

[billwagnon]

I think Jack is right about keeping the experts - heck, give them special deals, keep them happy. If they keep posting, keep the goodies coming. They get annoying, "fire" them.

Experts are what you have to have. Smartasses like me show up to learn from the wise ones, and can't resist the occasional pro bono wisecrack.

Not that I have anything against Cher, mind you.

[Jim T]

Is it Bimmer.org?

That's probably the biggest one out there.

And even that isn't worth much, the model (as far as making money) has been disproven. Anything with less traffic than that site is not worth much.

Maybe $5K?

[hermzz911]

I wonder if there is as much value in a BMW BBS as with the Porsche BBS. As Jack has stated, you have achieved the right balance of users that keep the content lively as well as informative. I think another part of the equation is the cult-like status that Porsche owners feel apart of.

Is there the same cult-type following for the BMW's as there is for Porsche? There probably is for the 2002 series and M-series, but beyond that (ok, and maybe the z3), I'm not sure there is the same level of zelous hobbyist like exists on this board. Are there as many DIY's and hobbyists out there for BMW, and is that the group you are targeting? I guess my question is: If there isn't a comparable board to PP Porsche BBS out there today, is it because no one has assembled the right group of users, or is there not the draw to get them to spend some time every day going to the same BBS (which I think a lot of us do here)?

So far I haven't been flamed on this board, but that record may quickly come to an end with this post! By the way, I do have a BMW, but still under warranty, so I'm not planning on doing anything major in the near term (I have 58K left to go on the warranty).

Craig

[Wayne 962]

Hmm, there are a bunch of DIY people on the BMW circuit. Also, there are millions more cars than Porsches, so even if the percentage is lower, then the actual numbers may be there.

Not to toot my own horn either, but this site in itself has created a whole new breed of customer. A lot of people were not able to do their own valve adjustment until this website (and 101 Projects) came along. These two 'publications' are probably responsible for *a lot* of people taking the plunge to work on their own car. At least that's what we hear from people who call in every day. "Love the site, wouldn't think of working on my car without it, blah, blah, blah..."

Maybe I just have a big head...

I'm not too interested in Roadfly.org (bimmer.org). Their interface is awful, which means that they just don't get it in my opinion...

-Wayne