Tag Archives: Marc Andreessen

5 Reasons Not To Build That Online Community

Social media, Technology, Web/Tech,

Trends? “Let’s develop a community,” they say, meaning an online community. Search google for let’s develop a community and you get 23 million hits. You tell me: is there a marketing meeting brainstorming web opportunities that doesn’t include an online community?

So, contrarian hat on my head, I want to list some reasons not to develop that online community you and your team have been talking about. I don’t want to be negative … but still …

1. So many communities already.

How many logins can anybody manage? We’re lost in a sea of communities. Each assumes we’re going to log in regularly, check messages, look around, see what’s new, respond to people, and interact. Realistically, though, how many times are you going to do that in a single day?

We’re dealing with several hundred already-established social media communities. There’s Twitter and Facebook and LinkedIn, plus all those others. And then there are those school sites, alumni sites, home town sites, media sites, fan sites, in sites, over sites, and hind sites … never ending. Who can deal with that?

2. Ning, a cool idea, grows up. And gives up Free.

Do you know Ning? One of Marc Andreeson’s brainchildren, it produced hundreds of millions of dollars for its founders, and countless similar-look-and-feel community sites that all did one version or another of community, with log-in, profiles, friending, posting, and so on.

I’ve had notice in recent weeks as one after another of those sites closes shop. Ning is focused on the corporate enterprise market, where there’s money to be billed. And all of those community sites were competing with all of the other ones for your and my limited time available. It wasn’t working.

3. Oh the spam! The never-ending spam!

I’ve been involved with maybe half a dozen serious efforts by major business media and related organizations to build an online community of entrepreneurs, small business owners, and assorted interested parties. I won’t mention names here because I’m involved with most of them, like the people, would like them to work; but they don’t.

The self-serving shallow sales message, some of them thinly disguised, most of them blatant, end up flooding these sites like sewage from a failed treatment plant. Who wants to look at messages when they’re all that? The supposed or alleged interaction, the likes and votes and all, are similarly polluted with commercial sludge. It’s a shame, but it’s also reality.

4. Those disappointing messages.

The business community sites are also flooded with messages that ask authors and experts to summarize, presumably in a couple of paragraphs or so, the thousands of pages already published on that same topic. I know these people mean well, and I like to answer questions. But it would be a lot nicer if they’d look at the site they’re on first, rather than just asking for a three paragraph summary of 50 good pieces already posted.

I get it. They’d like to have it all in a personal message. But it isn’t really that simple. It takes reading all the ins and outs and on the other hands. So that email doesn’t work. And the authors who get it are disappointed, because they thought they’d already answered that question, and put it on the web where people could get it.

5. The molten lava landscape is cooling into solid ground.

I doubt it’s coincidence that two of the three Ning sites I think of first are giving up the Ning model and moving over to Facebook like instead. It’s human ability to support so many different motifs that ends up pushing us all towards a few big ones. With Twitter, Facebook, and LinkedIn, we have consolidated logins, comments, links, suggestions, and updates.

It seems to happen a lot. The winners emerge, the also-rans fade, and the business landscape solidifies.

Please, don’t do that online community you were thinking of.

Do, however, focus on one or more of the already-existing online communities and make it work for you, and your business.

Is Your Startup Fat or Lean?

Back to Fundamentals, Starting a Business, Venture Capital, , , , , ,

When two clear big winners in the high-end startup world disagree on something as basic as lean vs. fat startups, I’m fascinated. First, because both of them have a lot to say to the rest of us. Second, because it illustrates, once again, how much of startups and entrepreneurship defies rules of thumb and generalizations.

measure the appleIn The Case for the Fat Startup, Ben Horowitz tells how he burned hundreds of millions of investor dollars while building up Loudcloud/Opsware  for a stunning $1.6 billion exit in 2007 when it was acquired by Hewlett-Packard. Clearly, this was a huge win. It’s a hall of fame story. And he makes raising a ton a money one of the keys to success (I’m quoting):

As you listen to the virtues of the lean start-up–lightweight sales, light engineering, and so on–keep the following in mind:

  • If you are a high-tech start-up, your value is in your intellectual property. Don’t stare at your spreadsheets so long that you get confused about that.
  • You cannot save your way to winning the market.
  • The best companies can raise money even in this market. If you are one of those, you should consider raising enough to wipe out your competition.

Thin is in, but sometimes you gotta eat.

Fred Wilson, founder of Union Ventures, a big winner as professional investor, and an eloquent blogger, answered that post with Being Fat is Not Healthy. He says:

The very best investments that I have been involved in established product market fit before raising a lot of money. That’s how Geocities did it. That’s how Twitter did it. That’s how Zynga did it. That’s how every single one of my top twenty web investments in my career did it.

I have to admit, I like the lean option better, but then most of the companies I’ve built or helped to build were bootstrapped. And times have changed, too, so what Horowitz is calling “fat” isn’t really an option very often. But the dialog doesn’t stop there. Horowitz came back and responded with The Revenge of the Fat Guy. He makes two points back:

  • Product market fit isn’t a one-time, discrete point in time that announces itself with trumpet fanfares.
  • My experiences [with Loudcloud/Opsware] are highly relevant to other entrepreneurs. In fact, they are more relevant than Fred’s pattern matching.

Ouch? Pattern matching? Really. Read the Fred Wilson post, see if that’s fair. Also ask yourself whether he’s really guilty of underestimating the time it takes to get the product-market fit. I can’t resist adding this quote from the Fred Wilson post favoring lean. It rings true to me:

In short, since I started investing in the web in ’93/’94, I have invested in about 100 software-based web companies. And the success rate of fat companies versus lean companies is stark. I have never, not once, been successful with an investment in a company that raised a boatload of money before it found traction and product market fit with its primary product.

The rest of us, meanwhile? I think we have to admit, the debate is pretty much moot for the rest of us. There might be a few dozen people around who can still raise hundreds of millions of dollars based mainly on their name and track records. Ben Horowitz and his partner Marc Andreessen are two of them. But I’m not; and, no offense, but the odds are you aren’t either.