Comments on: Build something people will pay for http://www.coloradostartups.com/2006/09/05/build-something-people-will-pay-for/ The Startup Blog Network Mon, 15 Mar 2010 21:00:37 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Phil Bookman http://www.coloradostartups.com/2006/09/05/build-something-people-will-pay-for/#comment-215 Phil Bookman Thu, 14 Sep 2006 16:40:10 +0000 http://ColoradoStartups.com/?p=98#comment-215 The definition of success is important. I think there is a Web 2.0 blinspot to the lessons of the dot com bust. I call it the three curses of Internet success: Success Without Revenue, Success Without Profits and Success Without Barriers to Entry. You may want to look at it on my blog: http://bookmansbusiness.blogspot.com The definition of success is important. I think there is a Web 2.0 blinspot to the lessons of the dot com bust. I call it the three curses of Internet success: Success Without Revenue, Success Without Profits and Success Without Barriers to Entry. You may want to look at it on my blog: http://bookmansbusiness.blogspot.com

]]> By: David Cohen http://www.coloradostartups.com/2006/09/05/build-something-people-will-pay-for/#comment-211 David Cohen Thu, 07 Sep 2006 13:08:47 +0000 http://ColoradoStartups.com/?p=98#comment-211 Hi Paul. Any company that becomes "very popular" (i.e. a top 100 site) is going to be able to make money (through ads, a strategic acquisition, etc). I agree. In fact, at the end of the post, I talked about this very point. It's completely reasonable to say "build something <i>twenty million</i> people want" without testing your business model up front. So the difference in your statement and mine may simply a matter of context and the goals of the founder you are speaking to at the time. For example, if you're saying this to someone who is building a vertical software solution with the potential to build a $20m/year business, I think you have to bring the business and revenue model up early in the discussion. One of my favorite examples is Photobucket. They became profitable early, because they tested their business model and made sure that premium services plus ads equaled success. They didn't wait to have 50 million users to start figuring this out. Had this not worked profitably they would be more like YouTube in terms of bleeding money. Both are likely to be ultimately successful, and perhaps already are depending on your definition. I admire the work you are doing at Y Combinator. Thanks for the comment. Hi Paul. Any company that becomes “very popular” (i.e. a top 100 site) is going to be able to make money (through ads, a strategic acquisition, etc). I agree. In fact, at the end of the post, I talked about this very point.

It’s completely reasonable to say “build something twenty million people want” without testing your business model up front.

So the difference in your statement and mine may simply a matter of context and the goals of the founder you are speaking to at the time. For example, if you’re saying this to someone who is building a vertical software solution with the potential to build a $20m/year business, I think you have to bring the business and revenue model up early in the discussion.

One of my favorite examples is Photobucket. They became profitable early, because they tested their business model and made sure that premium services plus ads equaled success. They didn’t wait to have 50 million users to start figuring this out. Had this not worked profitably they would be more like YouTube in terms of bleeding money. Both are likely to be ultimately successful, and perhaps already are depending on your definition.

I admire the work you are doing at Y Combinator. Thanks for the comment.

]]> By: Paul Graham http://www.coloradostartups.com/2006/09/05/build-something-people-will-pay-for/#comment-210 Paul Graham Thu, 07 Sep 2006 04:00:43 +0000 http://ColoradoStartups.com/?p=98#comment-210 Can you offer a counterexample? Can you point to a purely web-based startup (i.e. no shipping dogfood) that became very popular, and yet whose owners didn't ultimately figure out a way to make money from it? Excluding edge cases like startups that got sued out of existence, or imploded because of arguments between the founders, etc. Can you offer a counterexample? Can you point to a purely web-based startup (i.e. no shipping dogfood) that became very popular, and yet whose owners didn’t ultimately figure out a way to make money from it? Excluding edge cases like startups that got sued out of existence, or imploded because of arguments between the founders, etc.

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