The bottom line: Gabriel Weinberg has built every company he is known for without a dollar of outside funding. He sold the first, an online people-directory called NamesDatabase, for a reported ten million dollars in 2006, and that exit bankrolled his second, DuckDuckGo, the search engine that refuses to keep files on its users. By 2015 he said the second venture was making money as well.
The first company began as someone else’s project. The corporate entity was Opobox, running an email list management business led by Weinberg’s partner; Weinberg came aboard, the two split equity fifty-fifty, and the partners cycled through ideas, among them a coupon site they worked on for 6 months before abandoning it. His own verdict on those pivots is blunt: “I give up too early and don’t really push through.” The idea that finally took, the Names Database itself, was a directory of registered names that spread virally.
Traffic for those early experiments came mostly from search optimization, which in the early 2000s rewarded almost anything a person put online; the coupon site drew visitors through per-retailer deal pages that each ranked on their own. After it, Weinberg spent a stretch building a simpler email client, and looking back he says he regrets none of the wandering: the small team was hunting for an idea that would take traction fast.
By the numbers, the exit was modest but real. At acquisition the database held about 22 million registrations and roughly a million dollars of revenue, counting both the cumulative total and the annualized run rate, and the buyer, United Online, disclosed the ten-million price in its own press release. “Zero funding, it was completely self funded” is how Weinberg describes the entire operation. After the deal the database kept growing, adding ten million more registrations.
The sale bought him his runway. In a 2010 interview he confirmed that the exit was what kept the new search engine, his lifestyle and his angel investments afloat; asked whether that reading was right, he answered simply, “You are absolutely right.” DuckDuckGo at that stage was a one-man, no-VC operation winning converts in the tech community, picking up mentions on Hacker News, CNN, the New York Times and TechCrunch, and being framed everywhere as a solo founder taking on Google.
The economics question, how a search engine earns money without a tracking history on its users, got a direct answer in an ask-me-anything session on YCombinator’s Hacker News on October 7, 2015, later relayed by Fortune: “DuckDuckGo is actually profitable,” Weinberg wrote, and, “It is a myth you need to track people to make money in Web search.”
The contrast he draws is with rivals like Google, which store what their users search for and pass that history along to advertisers and other companies, who then use it to aim ads at the same person across the rest of the internet. DuckDuckGo’s pitch is that it collects none of that, and its founder’s claim is that the business works anyway.
The mechanism, in his telling: “Most of the money is still made without tracking people by showing you ads based on your keyword,” the way a search for a car surfaces a car advertisement. Buying intent does the targeting; the cross-Internet ad surveillance economy exists, on this account, to compensate for the absence of intent everywhere else on the web.
Investors will note the shape of the arc: bootstrap, sell, then plough the proceeds into a slower, privacy-first bet that still reached profitability by 2015. The figure that matters most here is zero, as in the outside capital neither company ever raised.
Sources
- How Gabriel Weinberg of DuckDuckGo made $10 million
- DuckDuckGo CEO: We Are Profitable Without Tracking You | Fortune
