This morning I had an interesting article come across my Google Reader:
“25 Internet Startups That Bombed Miserably” [thanks Alex]
The article goes on to outline a bunch of high profile start ups that crashed and burned often with disastrous results like losing hundreds of millions of investment dollars and putting thousands of people out of work. Some of the more famous examples include Pets.com and WebVan.
One thing that really struck me out of the article was how much press many of the companies got before their disastrous crash. I see so many start ups out there that are dying for attention and exposure, even though there is no real substance behind their company. I also see many start ups with incredible teams and products that simply get ignored by the mainstream tech media like TechCrunch. And I think to a certain extent they’re better off for it.
The moment the media starts incestuously buzzing about your company, the moment the expectations about your future success skyrocket out of control. It’s easy to get caught up in the hoopla of being a high profile, important, well covered startup, but I think some of my favorite companies are the ones who stay low profile, scale, build up kickass products, and get ignored by the mainstream tech pundits.
This reminded me of an interview I read with Wharton alumni entrepreneur Scott Rafer (MyBlogLog and now Lookery). His #1 rule is something I love at it’s core: ” ‘Un-sexy’ ” is good business. Rafer’s Lookery provides social network application developers ways to monetize traffic with run-of-net advertising and CPM gaurantees. They go for a high volume model to grab huge chunks of inventory. Nothing sexy about it, but it works and they’re kicking ass by all accounts.
I’m proud to say my company is not sexy. Usually I get asked questions regarding what I’m doing next with my company or what our execution plans are. I always break it down simple:
- We make high quality engaging sports games for people to play on social networks
- People play our games in large numbers
- We get paid from advertising or virtual goods/upgrades
We didn’t invent any new business models. We don’t have some crazy technology or Google-killer. Our burn rate is really low. We just make something people love and we make money.
PR and sexiness can sometimes bring a company to new heights, but I think it should be approached with a fool’s gold mentality. Every now and then you hit gold, but usually it’s a fleeting illusion.
July 28, 2008 at 5:52 pm |
True story, Boris. The best services that I’ve used typically are ones that grew from obscurity and only got (accurate) press coverage when they were good and stable. Except Twitter.
July 29, 2008 at 5:06 am |
Thank you! Looking at the MBL widget, Lookery’s CTO came by too. We’re doing our best to practice what we preach.
P.S. Twitter’s a great service, but so far not a good business.
July 31, 2008 at 9:59 pm |
[...] Story of Failure A few days ago I wrote a post about PR and soaring expectations that can lead to failure for many highly touted start ups. Today [...]