Killer Applications
An upstart makes a national name for itself by swatting computer bugs

ON A SUMMER AFTERNOON IN 1994, Bruce Brown was sipping microbrews on a Seattle patio with a bunch of techies, listening to the buzz about Win95. It was already late to launch, and, despite the now-historic hype, his Microsoft Corp. pals were calling it "the mother of all bugs." Brown had an epiphany: He could turn the growing frustration of computer users into an opportunity. So in November, he launched BugNet, a newsletter on computer bugs and how to squash them.

It was glorious timing. Days after the debut issue, a major flaw in the Pentium chip focused national attention on bugs. Soon, the tiny newsletter had deals with newspapers and online services such as the San Jose Mercury News and CompuServe, putting Brown's snappy tech columns in front of millions. The broad interest surprised the experienced journalist and writer, who had only a hobbyist's knowledge of computers himself. He had seen his audience as techies. "We did not anticipate people sitting on the toilet reading us," he says.

Since then, bugs have only become more numerous and good tech help harder to find. The dreaded Win95 did indeed overwhelm Microsoft tech support, for example. "The average American would never buy an electric razor that was as buggy and unreliable as a PC," Brown scoffs. And with Joe Average now getting wired, bugs concern a wider audience. BugNet subscriptions, which range from $65 annually for an individual consumer to $75,000 for a corporation, continue to grow. Last year the company created special rates for small business, to meet hefty demand.

Robert Johnston, information officer at the World Bank in Washington, D.C., and a computer professional since 1966, is a typical subscriber. He recently signed up the bank's IT department after finding the Web site comprehensive and helpful. "It warns us of potential problems," he says. "And the fact that they lighten it up is nice."

Clearly, BugNet makes the most of the Net's freewheeling culture. It doesn't stint on free content and relies on word-of-mouth advertising among Web cognoscenti. Research efforts are substantially aided by a passionate army of tech-smart volunteers who love to find and fix bugs. A handful of staffers toil at headquarters in Sumas (Wash.), in a six-bedroom house near the Canadian border that Brown's grandfather bought in 1917. But most work at home, from as far away as London. They're managed through an intranet, which contains editorial guidelines, deadlines, contact information, and photos of all the staff.

Revenues come from subscriptions, syndication, and licensing deals -- all for the same core product of editorial content on bugs and fixes. Yearly sales are still less than $1 million, according to Brown, but 1998 sales were five times1995's -- and profits tripled in 1998.

Actually, Brown's Company has always been in the black, if just barely at first. Starting as a one-man show, Brown trawled online forums for user complaints, researched solutions, and wrote the snail-mail newsletter himself. Marketing to an upmarket cohort of sophisticated users in large corporate and government entities, the company picked up visibility-boosting subscribers such as Hewlett-Packard Co. and Bear, Stearns & Co. early on.

Word spread, bringing in newspaper and online deals. When Brown got a contract to write a Win95 bug-fix book, he made his first hire: Bruce Kratofil, a business consultant based in Cleveland and a BugNet senior editor. (In five years of collaboration, Brown has never met Kratofil face to face. "We're thinking we're going to have to meet some day," Kratofil says.)

By late 1995, the company had axed the mail version and launched That brought in ad dollars from big spenders such as Microsoft and Intel Corp., while eliminating print costs. More recently, BugNet has licensed its growing database of bug info to MSNBC, ZDNet, and IDG's Infoworld.

Each week, BugNet editors wade through some 500 complaints from stymied users, described in a recent BugNet editorial as coming "like sufferers to Lourdes in an endless river of sorrow." The roughly 10% of problems that are judged most serious or widespread are researched. BugNet first checks whether the vendor is aware of the problem and has any patches. Sometimes, the makers are grateful, since a proliferation of programs and platforms makes it impossible to plan for every contingency.

Of course, manufacturers sometimes balk. In these instances, BugNet calls on its own tech experts and independent testing lab partners to provide solutions. Or it may get help from a subscriber like Brent Kellogg, a 47-year-old dentist in Everett, Wash., who spends a couple of hours a day "playing" on a network of six computers in his home. Each month he looks through the BugNet database of problems for things he can fix. Now what would you give for customers like that?

By Edith Updike

This article was originally published in the Apr. 26, 1999 print edition of Business Week's Frontier. To subscribe, please see our
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