The standard mythology of a technology startup goes like this: A brash entrepreneur takes on millions of dollars in investment capital, hires a bunch of business people, rents a hip, urban office space, buys expensive furniture, and then throws a big launch party to introduce the company to the world. Somewhere in that process, the company needs to figure out how to make money.
Madison is littered with failed experiments in this model. Just last month, Nextt.com disappeared from its Machinery Row offices without ever having ts official launch party (although you can download its social media software on iTunes).
Meanwhile, Middleton resident Ben Wolf is running a very different technology company out of his home. With only a couple of employees and a tiny budget, Wolf maintains a popular online service with almost 500,000 users. And despite the modest infrastructure, his goal is nothing less than to take on Facebook and Twitter.
Last year, Wolf left his job as the vice president of technology for a legal software company to start a technology consulting firm. The company consisted of just Wolf in Middleton and one other colleague, Jim Fiorato, in the Chicago suburbs. The pair's primary business is still the web consulting business called Levee Labs.
"We're small," says Wolf. "We need to grow but have been taking it slow looking for the right people to bring on board."
Both Wolf and Fiorato used RSS reader software to quickly read the news each day. Then last year, Google announced it was going to kill its popular RSS product, Google Reader.
On Fiorato's advice, Wolf started using a service called the Old Reader to get his news. Then the Old Reader team wrote a blog post saying it would have to shut down because the developers couldn't support hundreds of thousands of users.
"We were big fans of the application but had experienced extreme ups and downs in performance and availability," says Wolf. "But we had extensive experience building high-scalability web applications and felt like we could fix it. So we reached out to the team and quickly ended up acquiring the Old Reader."
As the chief architect and technologist for several software companies in the legal industry, Wolf and Fiorato had a lot of experience building applications that could handle large volumes of data.
The challenges the Old Reader faced are the same challenges that broke Healthcare.gov and other online services faced with a deluge of users. Before, the system was often down because it simply could not scale up to handle traffic from thousands of concurrent users. "In general, expanding a data system to handle a larger amount of traffic is hard," says Jignesh M. Patel, professor of database management systems at UW-Madison. "Things break at scale in ways that you don't see at a smaller scale and with a much higher frequency."
Since stabilizing the service, Wolf and Fiorato have turned their focus into making a platform that can compete with the Facebooks of the world.
The two are vocal advocates of the Open Web movement, which is a geeky revolt against the closed, advertising-heavy social media services that increasingly dominate the online world.
The new and improved Old Reader is trying to build a service that integrates the best aspects of social media -- sharing content with friends -- without resorting to the type of advertising and invasions of privacy that often characterize social media.
Wolf and Fiorato believe people will get tired of having their personal information used and abused and their personal pages polluted with sponsored content and ads. And as people get tired of that on their Facebook walls, the Old Reader may become a compelling alternative. "We've noticed a lot of people moving away from social networks lately," Wolf says. "They are dejected by missing important information and tired of getting spammed with ads."
As with any Internet company, the hard part is figuring out how to make money for a service people expect to have for free. That's especially hard when your basis is anti-advertising and data mining. The Old Reader recently introduced a "premium pricing plan" for power users as a way to support the service.
And the Old Reader is still just one of dozens of RSS readers and applications people can use for free to get content delivered to their computer or phone.
"Tiny startups compete with gorillas all the time, and every once in a while they win," says Patel. "Facebook was once a startup against bigger gorillas such as MySpace, Orkut and hi5. To have a shot at succeeding, the smaller competitor must offer the customer something that is more compelling than the existing alternative. That is of course not trivial, and needs both technical and business skills."
Though currently the Old Reader's user base is more hard-core techies, the team believe more mainstream consumers will make the switch.
"Our aspirations are huge in terms of restoring and protecting the Open Web," says Wolf. "The Old Reader is just one piece of that puzzle. We've largely been focused on making it a financially and technically sustainable product so that we can continue innovating."