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How Wez Made Millionz Wit Dis Foto

Two entrepreneurs turn a quirky culture of creating misspelled captions for cat photos into one of the most popular Web sites. Lessons about commerce in the 21st century

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But the reality is as complicated as it sounds; anyone who goes to the site will be struck by a collection of very funny photos. The key to ICanHasCheezburger.com is that while there are layers upon layers of humor to explore, the basic humor is instantly accessible. What Unebasami and Nakagawa did was turn something that was fringe into something anyone could laugh at and, most importantly, with cool Web features, like voting on entries and a simple tool to create your own photo with captions, created a Web community anyone could participate in.

 As columnist Dwight Silverman of the Houston Chronicle wrote about his visit to the Web site, “It’s a serious threat to productivity.” Need more proof? The site was getting 600,000 page views each day before the founders sold it in October 2007. More recently, tech source CNET declared it “one of the most popular sites online.”

Quitingz Da Day Jobz

 Nakagawa had been working on another business idea when he and Unebasami began fiddling with ICanHasCheezburger.com. The mile-a-minute conversationalist Nakagawa doesn’t stop to explain what that idea was. “It was boring,” he says. That’s what he told his other business partner when he decided to jump ship to devote his time to ICanHasCheezburger.com.

Nakagawa was working as a manager at HMSA, and Unebasami was working as a Web editor for Pacific Basin Communications, the parent company of Hawaii Business. Both would return to their respective homes after their regular jobs and delve into the quickly growing electronic stack of e-mail and photo submissions. Unebasami recalls a conversation she had with a friend in the early months, when the site’s ad revenue was about $5 a week. “You should probably keep your day job,” the friend said.

Pretty soon neither they nor their server could keep up with the volume of data being generated by users of their site. More traffic to the site meant more ad revenue. Nakagawa, who had never gotten around to buying his Wii (his initial goal in launching the site), did a back-of-the-envelope calculation of his expenses and multiplied it by two to take into account an estimate of Unebasami’s financial needs. “When we reached that number, I told Kari, ‘I hate my job. I’m quitting,’” he says, declining to disclose the magic number. That was in May, the fifth month of operation.

 But even after quitting his regular job,Nakagawa found he and Unebasami couldn’t keep up with the volume of e-mail and LOLcat submissions that needed to be reviewed for consideration in the site’s gallery. “We were getting a couple thousand entries per day. With two people, it wasn’t possible [to keep up],” he says. Further, the site was having capacity issues, and routinely overwhelmed its server. Then, with coverage in The Wall Street Journal and other publications, the popularity of ICanHasCheezburger.com kept growing.

They needed to hire people, but the question was who and at what compensation? “It was hard to trust people,” Nakagawa explains. “You don’t want other people to screw [things] up, or sometimes their humor didn’t match up.” Even friends didn’t share the same sense. “You think that’s funny?” they found themselves asking, often horrified. The founders were protective of their creation.

“We have this culture and we just try to keep it alive,” Nakagawa explains.

Rightfully so. The culture of the site had created a loyal community of users. Its members had a sense of belonging. So, for example, when the founders put up on the site a virtual donation box to buy a server, they quickly raised the money and bought a server to process the 3 terabytes (or 3,000 gigabytes) of information they were going through each month. But, of course, even that increased capacity proved insufficient.

As Unebasami and Nakagawa considered their next move, something unexpected happened. In April 2007, the national recall of tainted pet food prompted the founders to provide its users with a link to a pet-related Web site for more information. “We figured our users might have pets,” Unebasami explains. The link caused a spike in traffic to the site owned by another 20-something, Ben Huh. Huh, the owner of Pet Holdings Inc., began talking with Nakagawa and Unebasami. Huh’s site was making solid ad revenue with significantly less traffic than ICanHasCheezburger’s, Nakagawa explains.

Huh and his investors raised the capital and bought ICanHasCheezburger.

 

Captions should be misspelled and use poor grammar. The idea is to imitate how a cat might spell. In addition, the captions at times mimic the dialogue of online gamers. But regardless of the background, just about anyone finds them funny.

Wat Weh Can Learnz

To understand LOLcats and the success of the Web site, Huh, a Seattle-based entrepreneur, says you have to start by talking about the industrial revolution. Silly cat photos and one of the epochal events in modern human history? He’s not kidding.

“From the start of the industrial revolution, mass production has been the rule of the day. But with the information age, that changed. With the information age came the importance of being passionate. Today, people brew wine in their basements. They want to create, make something unique and different. Something that was missing in mass production: Self-expression,” Huh says.

“People are starting to be craftsmen again,” he says. “LOLcats is ‘I want to be a craftsman.’”

Huh is talking about the need for businesses today to embrace their customer base or “community” as a core tenet of doing business. Gone are the days of delivering a product and ending the relationship until the next transaction. “You have to take down the wall between business and community,” he says. “You have to make them feel like this [your business] is a place they belong.” This is new commerce in a nutshell. People want to participate; whether it is sharing thoughts about their hotel stay or a treat for their pet or a recipe, businesses are growing on the interaction with their customers.

Huh adds that this doesn’t just mean online. Take the make-your-own yogurt phenomenon. “That is a brick-and-mortar example of what we do,” Huh says. “They have a system that is so simple. You add topping and discuss what you like with your friends,” he says. What does that produce? Not just loyal customers, but immense person-to-person marketing power. Put it this way: Has anyone told you about Yogurtland in Manoa yet?

“We don’t spend a dime on marketing,” he adds.

That doesn’t mean it is easy, says Hong-Mei Chen, professor of Information Technology Management at University of Hawaii at Manoa’s Shidler School of Business. To build communities effectively, a company must recognize that, without its customers, it has no Web site, Chen says. “Also, without customer loyalty, it is just another company.”

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