Derek Sivers

from the book “Anything You Want”:

The co-op business model: share whatever you’ve got

2011-11-20

The only business I’ve ever done is the co-op / sharing model. It goes like this:

  1. You have something that people want. It might be something you own, something you’ve learned how to do, or access to resources, space, or people.
  2. Find a way to share it with everyone who needs it. Not necessarily for profit, but just because it’s what you’d do for friends, and it’s the right thing to do.
  3. If it takes some effort for you to share it, charge a little something for your effort, to ensure that this giving can continue.

My examples:

Copyright forms: In 1994, the U.S. Copyright office still didn’t have their copyright forms online. To copyright your song, you had to mail a letter to Washington DC, to ask them to mail you the blank forms. So I scanned the forms and put them on my website for free. For the next two years, my site was the only place to get those forms online.

Trademark instructions: In 1995, I learned how to trademark my band name. It took many hours of work to figure out the legalese, but I did it. I wrote out the step-by-step instructions and put them on my band’s website for free. For years it was the go-to resource for musicians who wanted to trademark their name.

UPC barcodes: In 1996, I had a little record label, so I got a UPC barcode account, which let me put unique UPC barcodes on my CDs. I had to pay $750 to the Universal Code Council to get a company account, but that meant I was allowed to create 100,000 products under my account. Musician friends asked how, so I showed them how, but also said they could use one of mine. At first, I did this for free, as a favor, until friends started sending strangers my way. Because it took some work to generate the number, create their barcode, and keep records, I charged $20. Over the next 12 years, that made me about $2 million.

CD Baby: In 1997, sharing my credit card merchant account led to CD Baby. Over the next 12 years, that made me about $20 million.

Web hosting: By 1999, I had learned a lot about hosting websites. Linux, Apache, PHP, SQL, FTP, DNS, SMTP, etc. I had done it for my own sites, and bought my own servers. So when friends would complain about their existing web-hosting company, I’d host them on my servers instead. At first, I did this for free, as a favor, until it was filling up my server. Because each server cost me $300/month, I charged $20 per month. Over the next 9 years, that made me about $5 million.

None of these things looked like a business venture, at first. All of them were just sharing something I already had.

People often ask me if I have any suggestions for what kind of business they should get into. I tell them the only thing I know how to recommend:

Start by sharing whatever you’ve got.