Date: January 2001
From: Dave Heisler
To: Ask Tim
Subject: Questions About O'Reilly
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
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.
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.)
- 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
- 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.
- 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?
- 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!
- 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?
- 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
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?
- You've spun off and sold a number of companies. Do you feel that was key
to your success in raising capital?
- 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.)
- 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
- 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
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."
- 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.?
- 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,
raised the alarm at Intel's last meeting, and changed the course of that
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.
- 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?
- 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
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
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
- 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?
- 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
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.
- You're welcome.