Dreamers: The Digg Idea

For two months after he launched digg.com, Kevin Rose didn’t need an alarm clock. “By 6 a.m., I was up

For two months after he launched digg.com, Kevin Rose didn’t need an alarm clock. “By 6 a.m., I was up and on the computer,” he recalls. “It was the sheer fear of not knowing what was on my own home page.”

Here’s why: Seasoned editors do not deliberate over Digg’s front page. It’s strictly a popularity contest. Users post news stories and images—found anywhere from the websites of big newspapers to small blogs—and with the click of a button, other users either “digg” the items (meaning they like them) or “bury” them (meaning they don’t). On a given day, you can find breaking news about Iraq next to such headlines as “Bacon Flavored Jelly Beans!” and “Another Road Sign Warns of Zombies.” “Sometimes you’ll look at two headlines and say, No sane editor would ever put these next to each other,” says Rose, 32. “That’s part of the charm.”

Kevin Rose

Today, the site gets 35 million different visitors a month. One link from Digg’s home page can produce a tsunami of traffic that can turn a Web newcomer into a real player—or crash an ill-equipped smaller site. And investors are banking on the idea’s value; just last September, Digg secured $28.7 million in new venture-capital funding. Many believe Digg is worth much more: Last summer, Google was reportedly in talks to buy it for $200 million. (Neither company will comment.)

Rose says a big cash-in was never part of his plan. When he started Digg, he thought, “If this can pay my rent and I can chill in my apartment and drink my tea and have an awesome little office, that’d be more than I could ask for.” It’s the kind of dream you’d expect from a Web wunderkind. As a child in Las Vegas, Rose was “the most unpopular kid in school,” who at age eight spent hours on his family’s Commodore 64, typing code to summon an animated balloon. In the early ’90s, he persuaded his parents to buy him his own computer, which he used to talk tech with other “nerds” in chat rooms.

Rose’s passion sometimes took precedence over schoolwork, prompting his mother to confiscate his keyboard when bad report cards arrived. “I drilled a hole in my desk and put a chain through it so she couldn’t take it again,” Rose says. At 15, he was repairing computers. By 19, he had a computer-support job at the Department of Energy’s Nevada Test Site while he was going to the University of Nevada, Las Vegas. And by 21, he’d dropped out and moved to Silicon Valley.

Rose came up with the idea for Digg in 2004 while hosting a cable news show about tech trends. Social networking sites like Facebook had just taken off, drawing users who could post photos, links, and video and then talk about them. Rose created a site that would take that approach to news. It debuted in November 2004. “It was an experiment,” he says. “I wanted to see what kind of news would surface and whether it would be of good quality.” But when the number of people visiting Digg reached a few thousand a month—enough to garner ads—Rose quit his day job. By 2005, Digg’s monthly traffic had hit 200,000, and he’d hired a CEO and a staff and raised $2.8 million. Today, Digg is among the most-visited sites in the United States.

Like many sites, Digg hasn’t yet figured out how to transform its traffic into profit. Nonetheless, it continues to evolve. Digg now recommends stories to users based on other stories they like. It also lets them vote on questions they want to ask politicians and celebrities.

In the meantime, Rose is sleeping through the night. He still checks the home page every morning when he gets up. But he makes a cup of tea first, then sits back to enjoy the mutiny.

Getting Ahead with Kevin Rose

Q. Is starting an Internet business as easy as it seems?
A. Oh, absolutely. Back in 2000, just to get a site off the ground, you had to buy expensive servers. There weren’t as many freelance developers. Now you can get a rented server for $100 or less per month and hire a freelance coder for 10 to 12 bucks an hour and get off the ground for a few thousand dollars.

Q. What’s your advice for someone who wants to launch a site?
A. People spend too much time planning and trying to get everything perfect before they launch. You’re never going to know what users think until you get a site into their hands. Get something out there, find out what the community thinks, then refine and rerelease, refine and rerelease. You’re going to get a lot of things wrong, and that’s okay. You can always kill anything you don’t like. Other than that, hold off as long as possible before taking investments, because the longer you wait, the higher your valuation and the less of your company you’ll have to give away.

Q. Are you ever off the computer?
A. It’s easy to get lost in the computer; I probably spend 12 to 14 hours a day on it. But on the weekends, I need to unplug. As I get older, I realize I can’t live online. It’s going to burn me out or kill me. I also just got glasses for the first time in my life.

Q. What’s the best business advice you’ve ever gotten?
A. You don’t have to work for other people; you can do your own thing and it can work out. Also, do something you love. In my family, we’ve each followed our passions in life. That’s the most important thing.

Q. Are there certain entrepreneurs or businesspeople who’ve inspired you?
A. Growing up, it was Bill Gates for sure. And of course, Steve Jobs. I love the fact that he pays extreme attention to detail in his products. There’s something about opening an Apple product and everything from the lettering on the manual to the way it’s packaged is perfect—that means a lot.

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