Friday, April 27, 2007

Tech Link (Web): A Farewell to [H] Consumer

Well, I'm not really a fan of [H] anymore, ever since they announced before that they have become more commercialized. I can't really blame them, fans just want to whine how the site transformed into what [H] is now today, but reality is, running a website is tough and a big business too! So while I never liked [H] anymore because of their decision in the past, their reasons are more understandable, and this article is actually a solid testament to that.

A Farewell from [H] Consumer

As some of you may have heard, [H] Consumer will be closing its doors by the end of the month. [H] Console is also shutting down. This post is to hopefully clear some things up and give our millions of readers an explanation.

First, we would like to express our great gratitude to the faithful readers of [H] Consumer. All of your forum posts and emails were validation that we were doing something special. We appreciate your readership and your support. It means more to us than words can describe.

So, to get right down to it, [H] Consumer is shutting down for one reason alone – money.

When Kyle, Chris Morley, and I were talking about how this was all going to run two years ago, we knew that we were learning to swim by jumping into the deep end of the pool. Even though it took us a while to really get our rhythm and writing style down, it was clear from the first few articles that we were doing something special – something that might even make a difference. In short, we were offering something new, something unique, and something that people were going to want. With our collective business acumen, we knew something like that would have NO problem attracting the attention of advertisers and financial supporters.

We were wrong.

It took months and several articles to get people interested in our program, much less interested in throwing thousands of dollars at us monthly to help us stay operational. As our program developed and we accepted more integrators in to the program, we had faith that the ad buys would come. They didn’t.

We had a fundamental problem.

It turns out that our articles were so thorough, that the integrator’s greatest benefit in dealing with us is that they got a full audit of their operation quarterly for the mere cost of a system. That was a far greater asset than putting an ad on our pages where the integrator runs the very tangible risk of receiving a bad evaluation on their next go-around. If they faltered and received a rating of anything other than “9” or “Recommended,” their ad dollars were wasted that month. Why not sit back, let us point out all the problems they had, pass our evaluation around to their employees, and shore up their operation on the cheap? Even if they junk the system that they sent us (which they don’t), they’re getting the best independent audit in the business for a fraction of the cost of an ad buy.

Our business model was not paying the bills.

Before any of you blame Kyle for “giving up” on Consumer, I can say with full confidence that Kyle busted his ass trying to keep [H] Consumer alive. We talked to every ad agency in the developed world trying to find someone who could bring us advertisers. Promises from those agencies came and went. They wanted more page views, we gave them more page views, and they flaked. Imagine our frustration after two years of this. Throughout it all, Kyle was a rock and he had enough faith in what we were doing for three people. He just told me to keep churning out content – if we don’t keep going, then it’s going to be even harder to find an advertiser. So we kept going.

Because of security concerns, we needed an office. Chris and I initially worked out of our houses, which explains the shoddy photography. We knew that if we wanted to ramp up our article output, we would need a centralized location to store our article files and software – not to mention the multi-thousand dollar computers we were working on. As more people were hired, the credit card bills started to soar. At any one time, we would have as much as $50,000 in computer equipment sitting out of pocket. Because it takes well over a month to buy, receive, evaluate, and return a system, we couldn’t get a refund by the time the credit card statement hit, so we had to pay off the bill every month.

The office, the computers, and the writing and editing fees were all out of pocket expenses. In total, it cost us tens of thousands of dollars every month to run the office.

Finally, we came to a point where so much money had been invested in [H] Consumer that we had to stop the bleeding. I won’t put an exact number on it, but we were literally hundreds of thousands of dollars in the hole. The only reason we were able to stay operational is that we were literally living off of [H] Enthusiast ad money and taking potential reinvestment and expansion opportunities away from them. Still, we were losing money every month.

So, there it is. We’re currently exploring some opportunities in private consulting as some integrators might like to have us help them out by more discreet avenues. It was with a heavy heart that Kyle made the final decision to shut things down here. We assembled some of the best technical writers in the industry and amassed a very large, faithful readership. We produced content unlike anything else on the Web, the quality of which is not likely to be seen again. We enjoyed doing the evaluations and bringing something of value to the [H] faithful – new and old.

We bid farewell to the great WWW and wish all of you the very best. We still have a couple of articles that will appear on [H] Enthusiast, which is now just [H] again. We hope that you’ll enjoy them.

Warmest Regards,

Managing Editor

Source:A Farewell to [H] Consumer

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