2005-12-07
Web 2.0 Companies DO NOT need To Scale
In Jeremy's Article:
Web 2.0 Companies NEED To Scale,
he highlights a certain process that he belives most start ups follow.
Yeah. Here’s their process:Here is my view (albeit never working in a startup, but having working on integrating a couple of small-large ones) of how it works.
- 1. Start with a handful of users. This is too much for ded box.
- 2. Move to dedicated server.
- 3. Add a few more users til they’re at 100. This is too much for one box.
- 4. Add more hardware. It’s obvious this isn’t enough.
- 5. Recode.
- 0. get your savings together
- 1. build a prototype, show it to some friends and put your hand out for some $$$
- 2. with something functional, approach the VC's
- 3. use VC cash to just buy more machines, and concentrate on adding features to bring in the money, not 'optimized' solutions
- 4. concentrate on your growth rate. you need to have this as high as possible, not your user base
- 5. once you have become a 'market leader' and have series 'B' funding, then concentrate on employing a person to tune your application, or just buy some new machines which are 2-3 times faster than the ones you originally have OR
- 5. Flip it
- 6. Let the buyer integrate the application into their infrastructure, processes and standards. From my experience this will double the user-base and increase the growth rate as they put your application on their scalable services, and optimize the unscalable bits by replacing them with their exsiting stuff, or rewriting them. Maybe it's just me, but the value of the aquisition isn't the technology, it's the userbase.
- 7. Wait a year till your options vest and repeat/buy a yacht