18th October 2014
In 1995 Danni Ashe launched Danni’s Hard Drive – an adult website staring herself – from a spare bedroom and $8,000 of her own money. By 2001, Danni’s Hard Drive would be worth $30 million and one of the biggest adult sites on the internet. Ashe would attribute her success to showing up every day, working hard, analysing her problems, and making the best decisions, but behind that simple answer were business decisions that made her an early online entrepreneur.
In August 2000, The Guinness Book of World Records crowned Danni Ashe as “the most downloaded woman on the internet”. Not bad for a woman that built her own website (literally) and turned it into not only a leader in adult entertainment on the web but in online businesses in general. Ashe’s story is an example of entrepreneurship on the early web from a person with no business or managerial background, but with a desire to build something.
In the 90s when the internet was catching on, it presented an opportunity for adult entertainment. A barrier to sales was the fact that it required customers to get content in public, often in shady parts of town. With the internet, that problem could be solved. There was no need to work on creating incentive (nature had done that for them), so, it seemed like a simple matter of “build it and they will come”. It seemed like a no brainer, except that it didn’t succeed at all for most. Except for Danni’s Hard Drive.
Danni’s Hard Drive was an anomaly in the online adult industry. Successful from the day it launched (her $8,000 investment to start the business from a spare bedroom was paid back in 2 weeks) she carved out a niche for herself. The predominant business model at the time was referral income and created a scenario where potential customers were shuffled from one site to another in the hope of being the referrer to the small percentage of conversions. Danni’s Hard Drive didn’t follow the masses.
There are plenty of strong adult brands in the publishing and video worlds, but for whatever reason it hasn’t happened that way on the internet. What most have done is really a game of pushing traffic around. There are four main models in the adult internet industry:
1) There are free sites who trade traffic with other free sites, then sell off some of that traffic to pay sites.
2) Other sites are big link-hubs. All the free sites send traffic into the hub, then the hubs will send some new traffic back.
3) The pay sites buy traffic through affiliate deals, where other sites send them traffic and the pay site tries to sell them subscriptions. The rate is about 3.5 subscriptions per thousand visitors. Obviously that’s pretty low. So it becomes even more important to move more traffic.
4) Then there are the content syndicators. They put together pieces of content, live feeds, photos or whatever else, that they sell to subscription sites. So there are many sites who do not produce original content, and those people don’t develop brand loyalty.
How DHD has done it differently is that we produce a lot of our own content, and we try to produce a much more friendly site. It’s my goal for people to feel good about their experience; I don’t want them to feel bad about what they’re doing. I want it to be a light, bright, well-lit place.- DANNI ASHE - MEDIALIFE
The idea for the site came in 1995 when Ashe learned that fans of hers (Ashe had become a successful stripper and would tour clubs around the country as a feature dancer) were sharing images of her in Usenet newsgroups. Ashe was already computer savvy and joined the newsgroups to find out more. What she found was the spark for what she would build.
There she found a group of men who were fascinated “not only with women who took their clothes off, but with women in general,” she says.
“The conversation I was having online planted the seed for Danni’s Hard Drive,” Ashe says. “Maybe these guys are more interested in who we (models) are as people than we thought,”- STARTUP GARDEN
That there was an interest in learning about the women themselves would become the major factor in how she architected Danni’s Hard Drive to create the ‘friendly, light, bright, well-lit place she envisaged.
Ashe focussed on producing original content and on building a relationship between the customer and her models by building profiles around them and pushing the site on this aspect. The model’s directory was the centre of the site and “everything comes and goes from the model pages, everything“. It might seem obvious today, but Ashe knew that her point of difference was the focus on crafting an experience instead of the more common “here’s some pictures, look at them” approach.
Another major difference was that Danni’s Hard Drive only contained softcore content. As Ashe would say, “you never see penises on Danni’s Hard Drive” and that was a conscious choice to target this space. Danni’s Hard Drive thrived as a niche pay site despite there being no shortage of pictures on the net of any flavour, most of which could be accessed for free.
Many years later, but in a similar vein, Apple would conquer digital music sales despite the abundance of freely accessible pirated music. In April 2003, Apple launched the iTunes Music Store despite various other digital music ventures having tried and failed. The online music business had never really worked, but Apple had come up with an approach that had the music industry believing they had cracked it. As Time magazine summarised, Apple found what could compete with free.
Walter Isaakson’s biography Steve Jobs has a detailed account into the development of the iTunes Music Store
iTunes offered a simple interface and a painless purchasing process to get guaranteed high quality music (pirated music was infamous for poor quality and malware) and customers flocked to it. Ashe offered something similar. In the wild west that was the mid-90s internet, Danni’s Hard Drive offered a consistent, quality experience with personalities that customers could get to know and keep coming back to. She believed that was worth something, and her customers did too.
Last year  Danni’s Hard Drive made $6.5 million. This year we expect to make $8 million. We now employ 45 people, and the business continues to grow and expand.- DANNI ASHE - FRONTLINE, PBS
Where things get interesting is the technology behind the site. The adult entertainment industry has typically been at the forefront of embracing new technologies into their business, sometimes to ironic effect (the use of FaceTime for adult chat contrasts with Steve Job’s infamous email exchange where he decried ‘freedom from porn’). The major growth in Danni’s Hard Drive was in large part due to what was going on behind the scenes.
“Right now, subscriptions are 90 percent of our revenue, and 80 percent of our subscription site is static pictures alone,” Ashe said. “I don’t envision that lasting much longer. Everything is moving toward video, and we’re doing as much as we can in that area.”- WIRED
Ashe is building her own broadcast facility and brainstorming with her staff of 17 on how the company can build content that is uniquely designed for Web-and-TV convergence.
That Wired article was from 1999, 6 years before YouTube tentatively hit the scene. From humble beginnings with a camera in a spare room, Danni’s Hard Drive would begin developing their own technology – such as online video streaming – to further their business and, in doing so, creating solutions to problems that were applicable to online businesses in general. It’s an Amazon-esque story of productising your platform.
Steve Yegge’s “Google Platforms Rant” has gained mythical status for his commentary on the inner workings of Amazon and Google. If you haven’t read it, make a note to. A completely inadequate, one sentence summary is that Amazon focussed on building the services that powered Amazon.com in such a way that it could turn those internal services into saleable products. Core services that powered Amazon, such as cloud computing infrastructure, databases, credit card processing… etc started becoming available to the public in 2006 under the name of Amazon Web Services (AWS). AWS has since become a goliath and powers many of today’s household names (Netflix, Spotify, and Pinterest to name just a few).
Steve Yegge’s rant was meant to be posted privately in Google+ to a limited audience but was accidentally made public. The post has been allowed to remain publicly available.
While not to the same scale, the technology that was developed to advance Danni’s Hard Drive would also become valuable products to other entities:
Over the years, we’ve had to develop a lot of technology to support the business of Danni’s Hard Drive — streaming video technology, hosting technologies, credit card scrubbing technologies, processing, customer service. And all of these things are now working so well that they have value to other companies, and we’re beginning to market those technologies to other companies. And that’s actually the largest area of growth in our business right now.- DANNI ASHE - FRONTLINE PBS
And from her Director of Marketing:
She has an enormous amount to offer the business community in terms of the technologies that she’s built the adult company on. One really interesting comparison is the medical imaging business – that is exactly the business that Dann[i] has built to provide people in France and Australia and Japan with pictures of naked models. That technology could be used, entirely unchanged, to deliver pictures of brain scans and CAT scans to doctors worldwide.
And that’s an enormously profitable business and something that’s really valid. People are beginning to see those affinities.
And the systems that have been built for processing credit cards are among the best in the industry, if not the best in the industry. … There are lots of mainstream companies who’d make more money if they processed using the technologies that Danni’s built than trying to build their own.- SAM AGBOOLA - FRONTLINE PBS
In 2004, Ashe sold Danni’s Hard Drive and retired from the adult entertainment scene, bringing to an end one of the early success stories on the internet. From humble beginnings of learning HTML in order to create the first site herself, Danni’s Hard Drive became the #1 adult site on the internet.
Ashe’s success with Danni’s Hard Drive could be summarised as:
Danni Ashe started as a stripper and knew the industry, but the success of Danni’s Hard Drive didn’t revolve around the fact that the subject was adult entertainment. Adult sites were abundant but few came close hers. Ashe created value in a unique experience, maintained it by developing her product and keeping it at the head of the game, and was rewarded with a solid customer base.
It doesn’t matter what it is you do, once you start charging money for something you’re in business and the mutual relationship that exists between business and customer does so regardless of industry. Business practices are the unsexy part of the equation that didn’t get much attention while you were daydreaming of world domination, but it’s the part that proves decisive.