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I listened to the Stack Overflow (hmmm, Stack Exchange podcast) and was a tad confused about the whole VC shenanigans.

What I seemed to understand is this:

  1. Stack Exchange remains a separate entity to Stack Overflow, which is funded and owned by Fogcreek and is not raising money. It's Joel's other baby project.
  2. Stack Overflow LLC (the guys the brought you Super User, Server Fault, Stack Overflow) are the ones asking for the money.
  3. Stack Overflow need the money for something top-secret that is not related to Stack Exchange that may take up to a year to develop.
  4. Stack Overflow is pretty profitable anyway.

Am I misunderstanding the message somehow?

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Maybe if they reduced the price to that of a normal forum ($5/$10 a month) they would make more money. Building a community is incredibly difficult and takes an incredible amount of time. The software helps but doesn't really do that much, so unless you're really rich you're not going to pay $129 a month. Right now that it's free over 95% of the sites have less than 10 questions a day. I would be really surprised if even more than 2 of them would pay that amount. –  Andreas Bonini Feb 21 '10 at 12:02
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@Koper -- you're talking about SE, which isn't (I think) what they are raising money for (see item 1). –  tvanfosson Feb 21 '10 at 13:07
    
I know, I was talking about point 1, that says: SE is not raising money –  Andreas Bonini Feb 21 '10 at 13:11
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@Koper, I think you're still misunderstanding - "not raising money" as in "not looking for venture capital" not as in "not making money" –  AnonJr Feb 21 '10 at 16:43
    
    
@Lance, related but its not a dupe, this whole VC thing is a mystery wrapped in an enigma –  waffles Feb 21 '10 at 21:51
    
yep, it is, mwiae –  Lance Roberts Feb 22 '10 at 0:23
    
+1 for using shenanigans....that word still puts a smile on my face. –  Michael Kniskern Apr 15 '10 at 0:10
    
we need money so we can hire you. –  Jeff Atwood Nov 27 '10 at 8:55

4 Answers 4

As I understood from @Joel's article, it seems to be that they want to take over the world and make Q/A communities for every topic before Google beats them to it.

Quoting (on the indicators for why to go the VC route):

  1. There’s a land grab going on. The business is in a new field with no competition, but the field has proven itself, and is obviously going to get very crowded very soon, so the faster you can grab territory, the better.

  2. There is a provable concept that’s repeatable. I always point to the example of the Starbucks IPO, which was brilliant because it was so simple. Every new Starbucks store that opened in Seattle became profitable in a matter of months. They tried a couple of stores in Chicago and Washington just to make sure it wasn’t a Seattle thing, and those worked even better. Thus, the formula of opening as many stores as possible was as close to a sure-thing as possible, so raising money was a no-brainer.

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Sounds interesting, but I'm not convinced -- wouldn't this directly compete with the StackExchange sites? If Joel & Jeff launch a Q&A for, say, gaming, doesn't that almost implicitly kill smartergamer.stackexchange.com? –  John Rudy Feb 21 '10 at 13:45
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From podcast #84: Joel blogged about Stack Overflow looking for venture capital — that should not affect Stack Exchange. In any case, even if it did, you can use your own domain name which you take with you, and as mentioned above, you can export all your data. There should be competition, and smart competitors will support the Stack Overflow and Stack Exchange export formats. It seems like they anticipate that they might be in competition with some SE sites -- and you can take your data with you and run your own or another's software if you're not happy about it. –  tvanfosson Feb 21 '10 at 14:02
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Probably the only way to know for sure -- until it happens -- is to show up with your bucket of cash and developer creds and see if @Joel will do the dog and pony show for you. –  tvanfosson Feb 21 '10 at 14:04
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Anyone got a bucketload of cash I can "borrow?" :) –  John Rudy Feb 21 '10 at 16:26
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one bucket of cash, coming up. *hands @State a bucket of pennies* careful, it's heavy.. –  quack quixote Feb 21 '10 at 21:27
up vote 2 down vote accepted

We needs money for this: http://blog.stackexchange.com/post/518474918/stack-exchange-2-0

So we’re making a few changes. Briefly:

  • Stack Exchange will now be free.
  • We’re changing the way that new Stack Exchange sites are created to move to a more democratic, community process.
  • The content of these new, community-created Stack Exchange sites will be publicly owned under a Creative Commons license, instead of being owned by individuals or businesses.
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One bullet point missing: The powers-that-be behind the platform will monetize the community that you have managed to muster up around a new SE idea... –  Vincent Buck Apr 14 '10 at 20:29
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Like they do on the trilogy and don't we all love that? –  Ivo Flipse Apr 15 '10 at 7:42

Faster Buildout

For one, It means they'll have the cash to build out their infrastructure faster. If they didn't do this, it's likely they would hit the problem many small sites hit when they become popular:

  • lots of people suddenly hit their site and like it.

  • but it's slow or falls down, because of the sudden load increase.

  • unhappiness.

Good Industry Support

VC's like nothing better than for their companies to be each other's customers. The VC's will be able to tell their companies "if you need a Q/A board, set it up with SO." That will be beneficial to the companies, coz they won't do the PGP/BB thing. It will be mutually beneficial for SO, helping to build a base of "real" solid sites.

I'm really looking forward to it... I love how SO works, and if some of the vendors I rely upon would start using SE I would be thrilled!

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I would love to see the Google help replaced with the SE-engine. It's horrible! –  Ivo Flipse Apr 15 '10 at 7:42

I was confused as well - initially I figured they were looking for VC for Stack Exchange, not Stack Overflow. I don't understand what is compelling to VCs about Stack Overflow, or compelling to Stack Overflow about getting VC money. They've already gotten advertisers and job/resume revenue.

I guess we'll find out soon enough.

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