Before Facebook, before MySpace, and even before Friendster, a small but influential social network started in San Francisco that eventually drew in tech-savvy entrepreneurs and artists from all over the world.
It was called The Well (or the WELL, for Whole Earth ‘Lectronic Link), and 27 years after its founding, it’s still here.
Now, with new owners and a new business plan, the Well is poised for — well, not exactly greatness. But something more sustainable.
“Unlike many startups, we don’t want explosive growth,” Well chief executive Earl Crabb told me last week. “We’re not going to sell people’s information. We want to stay small and grow slowly.”
At its peak, the Well had about 10,000 members: Nothing compared to Instagram or even Path, but a significant community for what was essentially a bulletin board system in the late 1980s and early 1990s. Those members had an outsized influence on the dot com era: It was a sort of elite, highbrow alternative that attracted exactly the sort of entrepreneurs, artists, philosophers, and dreamers who made the dot-com boom so fun (and so ridiculous). But over the years, the Well’s influence and size dwindled.
Last month, Salon Media — the Well’s owner since 1999 — announced that it was selling the Well to a new company, The Well Group, Inc. The selling price was $400,000, which might seem a bit steep for a service that had just 2,600 customers, negligible growth rates, and no obvious monetization strategy.
The new Well is a welcome respite to a tech industry that seems obsessed with making billion-dollar marketing businesses, going “balls to the wall,” and working 120-hour weeks. I don’t expect the Well will change the world, at least not in obvious ways. But I’m glad it’s not going away.
The purchase price was put up by 11 members who have an average of 20 years on the Well each and who kicked in at least $30,000 apiece.
“Would this have passed muster with my normal investment criteria? Hell, no,” said Jim Rutt, a Well investor who is chairman of the Santa Fe Institute and a former chief executive of Network Solutions.
But like the other Well investors, Rutt is looking for more than a high annualized rate of return. They’re investing largely to keep the thing alive.
“Well users are devoted, passionate, brainy, and deeply engaged. How often does one get to invest in a company where so many long-time customers check in multiple times a day always with an anticipation of pleasure?” said Evelyn Pine, a playwright.
That’s not to say that this is a charity. Well members pay $10 per month or $100 per year for membership, and those fees are sufficient to keep the company in the black indefinitely, Crabb said — and eventually to start paying profit-sharing dividends to its investors.
“I really wanted The Well to survive. It’s been an online home to me for 23 years,” said Joe Flower, a Well backer who describes himself as a health care futurist. “But equally important, it looks like a sound business that has survived all these years despite its owners doing little to promote it. With some nurturing and some marketing, it should not only survive, but it should do well.”
Or, as Rutt put it, “It ought to produce better than bond-like returns if it doesn’t collapse entirely.”
Regardless, traditional VC-type exits are out of the question.
“Any IPO or acquisition would be precisely the opposite of our goal, since we’ve seen the results of similar ownership changes over the past couple decades,” Crabb told me in an email. “As unusual as it might sound these days, we are interested in a sustainable business model with a reasonable return.”
So far, so good. The service has added more than 200 new members in the past few weeks, thanks to a burst of media coverage about the sale, and it now stands at about 2,850 subscribers.
As a business model, the Well might be hard to replicate. It does have something in common with the more small-scale, passion-driven projects that have found new life on Kickstarter: labors of love like the Pebble watch or the Ouya video-game console that would never pass muster in the wider investment community but that can attract plenty of support from a broad base of committed believers.
Still, the Well isn’t aimed at making a cool new gadget, or new way of sharing photos, or an easier way to find the best garlic fries in your neighborhood. As a result, it’ll probably stay relatively small and relatively focused. And that’s okay.
“I think it’s pretty unique. We have 27 years of history,” Crabb said. ”Come take a look. It’s got a whole bunch of very bright people. It’s very active, a very vibrant community that’s going right along.
“Our conversations go on for years. On Facebook, it’s maybe a day.”
Photo: An old well, by pfarrell95/Flickr.