Stratechery published a good article today on the recent news about Facebook offering to host content for publishers, The Facebook Reckoning. There is lots of good stuff in the article, but the thing that I latched on to was the idea of destination sites, which are websites or apps that people visit intentionally instead of incidentally, via something like a shared link.

In order to build a viable business, you need to become a destination site for a large enough segment, and Ben writes that:

The problem is that it’s really hard to become a destination: you need compelling content of consistently high quality.

I think that Ben was focusing specifically on publishers when he wrote that, but it isn’t very hard to expand that out to include other types of businesses. Ultimately, there are 3 ways to become a destination site based on the value you are delivering; you can enable an activity, create content, or curate content.

Destination sites enable an activity, create content, or curate content.

In order to become a destination site by enabling an activity, you need to help people do something better than how they were doing it before. And being better depends on the current environment. Some examples that fall into this category are Twitter for microblogging and engaging with others, GoDaddy for buying domains, or banks for managing your money. Businesses that enable an activity tend to charge for that activity directly because the value they deliver is usually infrequent, sporadic, and short-lived. The typical business model here is pay-to-play.

The other way to become a destination site is to help people combat boredom by either creating content or curating content. The New York Times and Wall Street Journal create compelling content; Reddit, Techmeme, and Twitter curate compelling content. These businesses tend to charge their users indirectly through advertising once they’ve built sufficient scale as a function of the number of users, frequency of visits, and duration of visits.

You might have noticed that I included Twitter in both categories. That’s because Twitter helps some users do something: share thoughts and engage with other people publically. But Twitter also helps other users (the majority) find interesting content to combat boredom. Twitter hasn’t historically done a great job of helping new users to find that interesting content. It was entirely up to the user to curate his own stream, and if he didn’t take the time to find and follow interesting users, then he eventually stopped coming to the site. Twitter has recently started taking steps to take on more of the curation, such as redesigning the homepage to immediately surface interesting content. Some of these changes are irksome to the active users that create the content, so Twitter needs to be careful in how they thread the needle in order to avoid alienating those users, like Digg did when they redesigned their site back in 2010.

It’s entirely possible, and common, for a site to be a destination site for different users for different reasons. And in that world, it is important to be thoughtful about how you are going to monetize, because otherwise, you could end up implementing a business model that creates the conflicting incentives and ultimately undermines your position as a destination site (e.g. Digg).

Buzzfeed has done a fantastic job of implementing a business model that benefits all of their users. As Ben has written in the past, Buzzfeed is an interesting case, where on the surface, it seems like they should be monetizing the users that visit their site through direct advertising, but they aren’t. Instead, they enable brands to reach more people by helping them create viral content, and they charge brands for that service. To be successful at this, Buzzfeed has to create compelling content that people will share with their friends. That attracts more users to their site, in turn making Buzzfeed more valuable to brands. It’s the perfect example of having incentives aligned in a way that benefits everyone; the brands paying for guidance on writing viral content, the writers creating content to learn and build the brand, and the readers enjoying the content.

When you implement a business model that reinforces the value that makes you a destination site for all of your users, you can create a very compelling business. On the other hand, if you implement a business model that alienates a core set of users, then you could quickly find yourself on a path to irrelevance.