Month: March 2012

In many ways it’s fairly obvious why some startups can innovate & execute faster and better than a big company.

The startup is focused and has one mission. There are no warlords, mixed interests, VPs battling for control, massive performance reviews to plough through, strategy meetings followed by more strategy meetings, “move the needle” conversations, etc. 

As a startup goes from purely product focused to scaling the organization I’ve seen a potential trap that is awful to watch. 

The trap is acting like a huge company when you are still a small company (ie less than 250 people). 

The challenge is staffing up accordingly with management and building out a team of specialists – but still maintain all of the qualities of a founder driven startup that is kicking ass, taking risk and making it happen. 

When I see a small company acting like a massive company with 360 performance reviews, or VPs reporting to other VPs, or a massive board deck, or a huge board or a roadmap from hell, or nasty politics, then something tragic happened. And it’s a moral killer. 

The good news is the startup can still fix itself – it’s painful but it’s possible. It’s not nearly as easy for the large company to correct itself. 

My first encounter with the social online was usenet. 

It blew my mind where i could find people all over the world to talk about things I was interested in like computers, consumer electronics or photography. 

Since then of course the social web has evolved at an accelerated pace with new experiences and new capabilities.

I think one of the best parts of the todays social web is seeing startups build applications, networks and marketplaces that where people can help out others.

Four examples to point out but there are many many others.

Kickstarter.

Kickstarter has made an enormous impact and is growing substantially in use and in the range of funded projects. And today, to give on Kickstarter is truly about just that – giving. It’s about helping support someone or something that you believe in. The projects happening as a result of Kickstarter and people’s will to make it happen are wonderful. 

Skillshare

In many ways, I see Skillshare as Kickstarter’s cousin. It’s not only because the founders are friends but they have a similar ethos. I remember having goosebumps when I heard Mike told us he wanted to turn every city into a campus. We made an offer to invest in the company the same day. The magic on skillshare is when students also become teachers and teachers become students. We are teaching each other new things and that is amazing. 

charity:water

Jack was the one who first told me about charity:water. it’s an important cause that once you learn about it, you just want to spread the word. And 100% of the money raised goes directly to building water projects. And they built an excellent social website where people are raising money from their old friends and new friends. Here’s my profile. 

Stack Exchange

Everyday people turn to the web with questions and a thirst for an answer. Not necessarily an opinion but the factual answer. Joel and Jeff built something that does just that. It started out as a site for programmers and has quickly become a network of sites across a wide range of topics. 

I am intentionally leaving out a ton of other startups because I can’t cover them all. But these services help each other out are an inspiration. 

When you go to a tech meetup, tech party, or read tech headlines, it’s easy to get swept away into thinking things are soaring for a number of startups. Company xyz now has a zillion users, another company just went viral, overnight sensation, etc.

It’s easy to fall in love with those headlines or worse, it’s easy to be distracted. 

The truth of the matter is that it hardly ever goes straight up and to the right. 

When you dig into the history of these companies the real thing to fall in love with is the founders/employees drive to dig through the pain over an extended period of unease, stress, unknown, fear and make something valuable.

The story hasn’t been fully written but consider companies like Tumblr, Twitter, Pinterest, Instagram, Foursquare, Fab, AirBnB and plenty others.

They didn’t start out as rocket ship. Quite the contrary. They started off rather slowly and bumpy. 

The risk of not paying attention to the reality of how these companies evolved is that you can have unrealistic expectations – as founders, employees and investors. 

This stuff takes time. And a lot of time. That’s why “build to flip” isn’t realistic either (or interesting to me even if it was). It’s important to build a company from top to bottom with that mindset. 

The latest example of a story of patience and persistence is OMGPOP. Since the day back in 2008, when we led the first VC round with $1M, the company has created really fun, social games on their own website. Growth has been good but never blew up. 

Over time, the team showed progress and raised another $15MM in a few rounds over the years but still never really took off in crazy rocket ship way.

Then approx 3 weeks ago, (almost 4 years after their series A) the company launched their 2nd iOS game – Draw Something. 

They launched it by first promoting it to their core users on their website, then they put a tiny bit of money behind it for a few days – and since then haven’t spent another dollar on marketing.

It took off. In the first 10 days they had a million installs with very high retention. Since Monday of this week, they have been the #1 overall paid app and #1 free app in the iOS app store in the United States and in another 25 countries. Today they have over 6M users of Draw Something

Like the other companies mentioned above, the story isn’t fully written about the future of OMGPOP. There is still plenty of risk and obstacles in front of them like scaling the massive traffic, competitive threats, etc. 

But the team should be very proud. I’m so happy for the people at that company that never gave up and pushed through.

It’s an amazing thing to watch. 

(disclosure: we are investors in tumblr, twitter, foursquare and omgpop)