Cheezburger Network’s Ben Huh on Startup Strategy, Expansion, and Making It Big

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couple of entrepreneurs from Hawaii earlier that year. Intrigued by the site’s traffic numbers (about half a million pages views a day), he showed it to his friend Andy Liu, the co-founder and CEO of Seattle-based BuddyTV. “Andy said, ‘Why don’t you buy it?’ I said, I don’t have the money. He said, ‘If you can buy it and run it, I’ll help you raise the money,'” Huh recalls. So he put up $10,000, and Liu helped him raise a large (and undisclosed) round of angel funding.

Huh took over the site and started Pet Holdings in the fall of 2007. In those early days, he says, he “focused on not changing anything.” “We didn’t really know what the hell we were doing, so we tried to leave the community as alone as possible, and keep what the former owners were doing very stable,” he says. But he did make some small changes—moving to a regular schedule of daily content to maximize traffic, launching some new blogs, and making the content-sharing interface easier to use. “Originally we thought, it’s not about cats, it’s about humor. It was a longer road, but we thought we could get there,” Huh says.

In April 2008, Pet Holdings bought FAIL Blog, and was up to five sites. Traffic kept growing, and ad revenues were pouring in; the company was profitable from its first month. There wasn’t any inflection point. “It was very gradual,” Huh says. He attributes the growth to the sites’ “consistency of content—something of specific quality we do every day, over and over again.” (One point of strategy that strikes me is that Huh has also known exactly when to buy already-popular sites, and how to turn them into even bigger hits. As opposed to building online communities and readership from scratch, which is what lots of entrepreneurs try to do.)

The past year has been all about financing the company’s growth during the recession and staying profitable, Huh says. In the first quarter of 2009, Cheezburger Network saw a 52 percent decrease in ad revenues, but with the second and third quarters came a “stronger than expected” recovery, he says. “We said, ‘OK, we’ve got a little bit of money in the bank, we feel comfortable, let’s continue to grow.'”

So, Huh has been aggressively forming partnerships with ad networks, including San Francisco-based Dogster last month. In addition to expanding Cheezburger’s online store, he has also released three humor books, the two most recent (Fail Nation and Graph Out Loud) having come out earlier this month. Huh has been on the road a lot doing promotions. On the marketing front, he advises that “it’s a lot better to have a small group of really passionate fans” than a large number of people who are lukewarm about your product. “You need a team of people who’ll root for you and fight for you,” he says.

So far, it’s all paying off. The Cheezburger Network is up to 21 employees in its offices in the Lower Queen Anne neighborhood of Seattle, and Huh says he’s looking to hire three more people this month as the company is “going through a rapid expansion.” The ultimate goal, he says, is to become “a first-tier publisher.” That means being a household name, Huh says.

Like I do with a lot of CEOs, I asked him a bit more about his company’s culture. “We’re not afraid to laugh at ourselves,” Huh says. “We encourage the taking of risk—without it, we can’t generate good websites and good ideas.” Asked to boil down the company culture to one word (you can read other local startups’ responses here), Huh says it would be “happy.” Cheezburger Network’s mission statement is to make people happy for five minutes a day, he says. That comes from fans writing in during the first year to say what the LOLcats site meant to them.

At the end of the day, of course, there is still some mystery surrounding the success of the Cheezburger Network—namely, why certain sites have taken off so fast. Huh has previously pointed out that he has launched a number of sites that didn’t take off, so he killed them. So a fair bit of trial and error is still involved. “I wish I knew the answer,” Huh says. “What we do works, so we keep doing it. It works for very different reasons for very different people.”

Not everyone around him loves LOLcats, though. Huh, who is famously allergic to cats in real life, says his dog is not a big fan of the site. “He prefers to look at my e-mail,” Huh says.

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