Failure and Success of Web Startups

FastCompany.com has a recent article telling the reasons behind ten Web 2.0 ideas that are, unfortunately, failed. At the meantime, I had a few private conversation with Riza Berkan at Hakia about how to improve Web search to the next level. I found, however, that some thoughts may really help new Web companies, especially the Web 2.0 startups, to survive longer in their journeys. Hence I would like to share them in this post.

A key point I shared with Riza as well as Charles Knight at Alt Search Engines was that a Web company needs to not only make itself be a good service provider but also be able to make other services be better. Make others be better, this is a key implicitly declared by Web 2.0.

To lead to the point, I share with Riza and Charles a story about NBA. NBA fans know that every year the league chooses a player to be the MVP (Most Valuable Player) of the past season. There are certainly many debates on whom the MVP of the year should be. A key issue among the debates is usually only about one question---there is a player who played the best by himself and there is another player who makes his team the best in the league, which one would you elect to be the MVP?

Fortunately, in general most people agree to that the one who makes his teammates better is more valuable than the one who himself is the best player. This is actually a general rule even if for Web businesses.

Let's then watch the 10 failures exampled by FastCompany.com. Discarding any specific reason behind each service, all of them have a common problem---each of them may be a good service by itself, but none of them have facilitated their products enough to improve the other services in the world. No matter is it as little as RSSCalendar or it is as giant as Windows Live Expo, the key for a new startup service to catch up with a forerunner is the quality of its service, where the quality is not just about how well itself is but more about how well it may improve others. Unless a new startup service is significantly better than the same service provided by a forerunner, rarely it can defeat a forerunner because few people would like to switch to a new service when the old service can serve at the equivalent quality. However, the situation would be different when many other services start to use the new service as their partners. People are willing to join a service that has more integration with other services they also have subscribed. This is thus the power of collective force.

In summary, for either new startups or existing Web services, a key issue they need to be aware is how their services or their products (either data or links) may be easily used by the other services and improve these other services. From one side, it is an example of engaging collective forces (a main issue of Web 2.0). On the other side, it is a realization of Web 2.0 to be a generic platform that every service upon it is eventually composed to each other (another main issue of Web 2.0). Hence, do not just think of end users. Please also think more of the other potential peer services. Not just make your own service be better. But also adjust the service product so that other services be better because of you. This thought might decide either success or failure of a startup at the end.