Fishbowl

by Matthew Glass

  ‘How much is upfront?’ said Andrei.

  ‘How much of what, Andrei?’

  ‘How much of the million you guarantee?’

  ‘We normally pay that quarterly.’

  ‘Quarterly in advance?’

  Standish shook his head. ‘Over the year, we expect you to be considerably ahead of the guarantee. What we do is top up quarterly to – in this case – a quarter of a million dollars if you don’t make the numbers, and we’ll take that back when you make up the ground. That gives you certainty over your cash flow, which is helpful to most start-ups. What we would expect here is for the next quarter or two, we would be making up the payment and then later, when the revenues get going, we’ll adjust that back. What you can be sure of is getting your quarter million minimum each quarter.’

  ‘But not in advance?’ said Andrei.

  ‘Is that important, Andrei?’

  Andrei frowned for a moment, wondering if he had given too much away. Then he said, ‘The other agencies we’re talking to are prepared to consider that.’

  Merritt glanced at Standish. The older man’s face showed no reaction.

  Andrei turned a page in his file and glanced at the numbers. ‘We’re considerably ahead of the numbers you’ve assumed.’

  ‘Great,’ said Standish. ‘You’ll do even better. The million guarantee, Andrei, is a minimum to give you some certainty as you plan. Now, I don’t how much the other agencies are offering you but a million in this circumstance is a considerable sum – by far the highest offer I have ever made to a new start-up – and 4Site is happy to do that because of our belief in your business. Even on the numbers we’ve assumed – and you say your numbers are even better, and I believe you – and even with our reduced commission, you should do a lot better. I’m estimating at least two to three times better. If you don’t, we take the hit.’

  ‘How long does the contract run?’ asked Andrei.

  ‘Three years.’

  ‘Is that exclusive?’

  ‘That’s exclusive.’

  Andrei nodded. He got up. ‘Thank you.’

  Standish looked up at him in surprise. ‘What’s wrong?’

  ‘I wanted to know whether you were serious.’

  ‘Andrei, we’re offering you a million-dollar guarantee over the next twelve months. I think that says we’re serious.’

  ‘Do you know how long three years is in internet time? Three years is a lifetime.’

  ‘Andrei, sit down, please. We’re serious. We think Fishbowll has enormous potential and we thought you’d want a partner who was prepared to commit to a substantial involvement. That’s why we said three years. But if three years is too long, I’m sure we can manage something else. Sit down. Please.’

  Andrei sat. ‘The numbers you’ve assumed in your presentation, the numbers you have for our users and visits and time on site, we’re over double that on every one of those.’

  ‘How far over double?’

  ‘Significantly.’

  ‘That’s awesome.’

  ‘I want to be fair to you,’ said Andrei. ‘I understand that if we’re going to do this, you have to have some time to benefit from the investment you make. I think an eighteen-month deal is fair.’

  ‘You know, eighteen months is quite a short timeline, once you set up and start to roll out. I think if we could do two years—’

  ‘Eighteen months from go live,’ said Andrei. ‘That’s a clear eighteen months. And the one million – we’re over double the numbers you assumed, so let’s guarantee that in the first six months, not the first year. And I don’t like this quarterly thing. I’d like half up front, the rest at the end of the six months.’

  Standish watched him, absorbing what he was saying.

  ‘After that, you have another twelve months before we look at the contract again and I’d expect a guarantee of two million over the following year. And your commission – fifteen per cent, not twenty. We get control over what kind of ads we do and how we do it. If you object, then you can terminate. That’s fair. We keep whatever you’ve paid us, you walk away.’

  ‘We do need to collaborate on the way we do the ads, Andrei. Like I said, that’s something we do know quite a bit about.’

  ‘Well, we can talk about it. But we have final say. If we have an irreconcilable difference, you can walk away.’

  ‘And what happens at the end of the eighteen months?’

  ‘We’ll see. If you’ve done a great job, why wouldn’t we stick with you?’

  Standish took a deep breath. ‘OK, let me make sure I know what you’re saying.’ He flipped over his file and began to jot down bullet points on the back. ‘Eighteen-month deal … Exclusive … Guarantee of a million in the first year—’

  ‘Six months.’

  ‘Sure, sorry. Guarantee of a million in the first six months, two million in the following twelve months … Fifteen per cent commission … Control of ads …’

  ‘And the first million – half up front and half after six months,’ added Andrei. ‘Don’t forget that.’

  Standish nodded, making a note. He gazed at the list. Merritt peered at the page and pointed at a couple of things, then looked at him meaningfully. Standish ignored him. ‘I think what you’re asking for on the commission is … that may be a little too steep. I’m going to have to go back to my board with this. I need a little something.’ He looked up. ‘What if we split the difference? Seventeen and a half?’

  Andrei shrugged. ‘Make it eighteen.’

  Standish smiled, crossing out fifteen and writing eighteen. ‘OK. I am pretty sure I can get this past my board. But I need to know something. If I do that, if I get my board to agree, do we have a deal? What I can guarantee you is that if my board agrees to this, they won’t renegotiate it if you come back with something else. And they’re not going to let it hang out there. They won’t allow 4Site to become part of some kind of negotiation where you’re talking to other parties and you’re playing us off against someone else. If I get you these terms – and these are great terms for you, Andrei – that’s it. That will be 4Site’s bottom line, and you’ll have twenty-four hours to agree. After that it will be off the table, and if we do offer you anything again, it probably won’t even be as good as the terms I started with.’ Standish paused, looking to see Andrei’s reaction. ‘Now, I can talk to my board first thing tomorrow. I can have a draft letter of agreement with you end of day. That means you’ll have until the end of the following day to agree – then it’s off. And it’s going to be our bottom line. I’m not joking.’ Standish put out his hand. ‘On these terms, do we have a deal?’

  Andrei gazed at him.

  ‘Yes or no?’

  Andrei nodded.

  Standish smiled, shaking his hand.

  ‘Send me through the draft,’ said Andrei and he got up. Ben and Kevin got up as well.

  The two 4Site executives watched them leave the restaurant.

  ‘What an arrogant prick,’ muttered Merritt.

  Ed Standish laughed. ‘What would you have said if he’d gone for three years? That he was a stupid prick?’

  ‘He worked you over, Ed. Eighteen per cent? We’ve still got to sell this to the board.’

  ‘Easiest sell I’ve ever done.’

  ‘They’ll kill us. What was wrong with you? He was begging for the money up front. Couldn’t you see that?’

  ‘Of course I could see that.’

  ‘You could have got him to sign up for anything as long as you were dangling that half million in advance. I would have—’

  ‘What, Andy?’ demanded Standish sharply. ‘What would you have done? Tried to screw every last dime out of him? And how long is he going to stick with us then? Do you understand the potential this website has? Have you thought about it? This is the best fucking deal 4Site has ever done. It would be the best deal at twice the price.’

  Merritt snorted.

  Standish chose to ignore that. ‘You want to eat? I’m hungry.’ He looked a
round for a waiter. ‘All I’d like to know,’ he said, as he waited for Lopez to come over, ‘is what we have to do to invest in this company.’

  Outside, on University Avenue, the three founders of Fishbowll walked away.

  ‘Whoa!’ whooped Kevin, fists in the air. ‘Dude! Awesome!’

  Andrei stopped. Suddenly he was trembling. His heart was thumping.

  ‘Where did you learn to do stuff like that?’ demanded Kevin. ‘I would have said yes to the first deal.’

  ‘That was pretty damn impressive, Andrei,’ said Ben.

  Andrei shrugged. He didn’t know where he had got the idea, or the courage, to do what he had done. All he knew was that the first deal was no good because he had to get money up front. A guarantee of money in arrears was no use to him, and if he wasn’t going to get that, nothing else mattered. Once he had decided to push back over that, he had just kept going and pushed back on everything. He was just as astonished at himself as the others were. And it had felt easy.

  ‘My father always says, “Push hard”,’ he said. ‘“Push hard and then harder.” Always get up and make them call you back.’

  ‘Is that more of that oligarch stuff?’ asked Kevin.

  Andrei nodded.

  ‘What about giving him that extra half a per cent? We could have got seventeen and a half. You gave him eighteen.’

  ‘If you can, make people feel like a winner.’

  ‘That’s from your father as well?’

  ‘Yeah. Make them feel like a winner – or else make sure you have a very big man you can call on.’

  Kevin and Ben laughed.

  ‘He’s never applied any of this,’ said Andrei in a tone of bewilderment, still wondering at what he had just done. ‘It’s talk. When we bought our house in Boston, he paid the exact price they asked.’

  ‘Dude, who cares? What else did he teach you?’

  ‘Nothing. That’s it.’ Suddenly Andrei frowned. ‘That was pretty good, wasn’t it?’

  ‘That was awesome.’ Kevin whooped again. ‘You are the negotiator.’

  As they headed back to Robinson, Andrei thought about what had just happened. He had learned a lesson. When people came to him with an interest in Fishbowll, he could push them hard. Very hard.

  But he had winged it. He had gone into the meeting totally unprepared – hadn’t even taken the obvious precaution of talking to another agency. He had only Ed Standish’s word that 25 per cent was the standard ad agency commission. He had no idea if a million dollars was a large guarantee or a small one. And now he had reached the end of his father’s crude and theoretical teachings about success in business.

  By the time the three of them were crossing Sterling Quad back to the dorm, Andrei’s sense of wonder at what he had just done had been replaced by a sense of foreboding. They were amateurs. They were three clowns who had turned up for that meeting and somehow come out of it without being recognized for what they were. There was so much, Andrei suspected, that he didn’t know, that he didn’t even know enough to know that he didn’t know it.

  13

  THE HALF A million dollars from 4Site arrived a fortnight later. Andrei sat at his screen, checking the bank account every ten minutes until he saw it arrive. He yelled to the others. Kevin let out a whoop.

  The first advertisements were on Fishbowll within four weeks, almost six months to the day after the site was launched. When users logged in, they saw a button titled, ‘Sponsored Bait’, with a tag underneath: ‘Check it out to see if you get Hooked!’ The button gave no idea of what was being advertised. Embracing Ed Standish’s idea that advertising, if possible, should complement and even enhance the user experience, Andrei had worked to find a form of advertising that would reinforce Fishbowll’s central vision – the taking of a journey into the world of your interests where the destination was unknown. He guessed that if people didn’t know what was being advertised, but were certain that it would chime with their interests, they would be more likely to click to find out what it was about.

  Andrei had announced the move in a post in the Grotto. He had thought hard about the attitude to strike and had talked it over with Ben, who knew the mood of the Grotto better than anyone. They both knew they were going to face a backlash, especially from the 300. Although Andrei wished he didn’t have to do what he was doing, Ben thought the backlash would hit harder and last longer if he was apologetic about it. People would feel that if they shouted loud enough he might relent. He decided therefore to be positive and upfront. He also decided to announce the move only the day before it was implemented. A prolonged debate before people had the opportunity actually to experience the advertisements for themselves would inevitably be fuelled by misconception and fear, and would play into the hands of people opposed to advertising or to change in general – which, Andrei knew, would be just about everyone.

  ‘Fellow Fish,’ he wrote, ‘tomorrow we are introducing Sponsored Baits on Fishbowll. The reality is that if we are to continue to provide our service, and make the improvements you are telling us you want, this is something we have to do. Our aim is to bring you messages from highly selected and trusted partners about things you are genuinely interested in, many of which will include special deals available to Fishbowll users only. The Sponsored Baits will be clearly identified – you don’t have to click on them. If you do click on them, and if you’re not interested in what they are offering you, tell us, and we’ll tell them! If you are interested, tell us about that as well. Most of all, keep telling us what you think of Fishbowll and how we can improve it. Happy swimming, Andrei.’

  The users did tell them. The traffic in the Grotto reached record highs and the 300 erupted in a storm of verbiage. The Morrowmeter was off the scale: ‘Sponsored Baits?’ ran one typical message. ‘Why not call it what it is? Fishbowll sells out like all the others.’ ‘How are they targeting those ads?’ said another. ‘What about privacy? I’m outta here.’ ‘Shame on you, Andrei Koss. You’re no better than the others.’ And so it went on. The Dillerman valiantly fought Andrei’s corner: ‘Guys, what do you expect? If the site we love is going to survive, it’s gotta have a revenue stream. Andrei’s doing it in the least bad way. Let’s help him out. Click on these Sponsored Baits to make sure he gets the cash to keep going!’ A shitload of abuse was poured over the Dillerman’s head but he and a small number of supporters kept writing similar things. Some messages even turned up that were actually positive: ‘I love Sponsored Baits! I found something I didn’t even realize I need. I’m totally Hooked!’ Those messages were met with the suspicion that the people posting them secretly worked for Fishbowll. Andrei denied that in a second post he issued a few days after the Sponsored Baits appeared. He also reassured users that although their data was used for targeting purposes, as was standard practice on all networking sites and in keeping with the privacy policy that Ben had drafted – largely by copying the policies on those other sites – no actual person at Fishbowll had access to that data, which was analysed by a totally automated set of algorithms.

  Naturally, a School soon formed of people whose interest was in stopping Fishbowll sending Sponsored Baits. Its membership surged to over 100,000 but there were never more than a couple of hundred active members, and the frequency of their protests soon fell away. For a brief period there was a larger than usual number of deregistrations, then growth of the site returned to normal. Apart from a few lunatic free-netters, as Kevin described them, who left the site to find the next outpost of cyberspace where they hoped the realities of the world would never impinge on their dream of getting something for free for ever, the rest of Fishbowll’s membership seemed to accept reality, albeit not always with the best humour. The heat gradually went out of the battle, and sponsored Baits became an accepted feature of the Fishbowll seascape.

  When it was over, Andrei was amazed at how easy it had actually been and how transient and negligible was the response to what he had done, despite the volume of noise that it had generated. Just
as the experience of Mike Sweetman’s attempt to crush Fishbowll, which he connected with the Stanford Daily article, made Andrei forever wary of the press, his experience of introducing advertising to Fishbowll – the first major risk he had taken in the site’s functionality – left a lasting mark. It made him sceptical of the significance and sustainability of user opposition, no matter how loud it sounded at the start. It didn’t exactly make him feel that he could do whatever he liked, but it definitely inclined him to be willing to do more than he might have thought was possible before that experience.

  In the meantime, it rapidly became clear that revenues generated by advertising would exceed the minimum $1 million guaranteed by 4Site for the next six months. Recognizing the degree of targeting they could obtain, and seeing the first results come in, the companies 4Site approached were soon prepared to pay rates per click that were five or even ten times the fee on other networks, a trend amplified by the scarcity of advertising opportunities on Fishbowll and the auction mechanism Andrei devised to award them. Initially, each user or School page received only one Sponsored Bait per day from companies offering a product in the relevant area of interest. The limit was Ben’s idea, which he saw as a means of protecting the user experience. Ed Standish at 4Site resisted the concept at first, but soon came to see its value, not only in protecting the Fishbowll user experience but stoking demand and achieving premium pricing for the ads. An automated winner-takes-all auction at midnight each night determined whose advertisements would take the slots the following day.

  Over time, the approach was refined. Some users clicked on the Sponsored Bait button more than once in a twenty-four-hour period, obviously seeking more ads. But in the course of any one day they saw the same ad each time, and if the same advertiser won the auction for the next day, they would see the same ads again. Standish, who was spending just about all his time on Fishbowll, thought this would frustrate the users as well as being a wasted opportunity to involve more advertisers. Andrei therefore developed a functionality that meant that if a given user clicked on the Sponsored Bait link for a second time in the twenty-four-hour period, a different Bait would appear. If they clicked a third time, a third Bait would appear, and so on down to the ninth slot. The auction process now offered not only the prime slot but the eight additional slots as well. Revenues tripled.