When you think of great internet startups that have changed people's lives, you're bound to think of Google and Facebook. These websites have become the most visited websites in the world, thanks to the enormous amounts of benefits these provide, each in their own special way.
But what really makes these startups so great, different and insanely successful than many others that crop up in the technology space? Of the many reasons that have been analysed by people studying and writing about them, there's one often ignored aspect which relates to capturing value at the right time.
We know startups are about creating value (benefits), more and more value and tonnes of value. But when does one really capture a part of the value that you're creating? Capturing value is important because at some point you've to make money or otherwise you wouldn't be surviving for long.
If you've seen the movie Social Network, you'll know how Eduardo Saverin wanted to make money early on from Facebook by placing ads on its platform. And if you've read about Google, you'll know how hard Page and Sergey were pressed by their investors to generate some revenue for their search startup. In both cases, it was becoming difficult for these people (investors) to digest that they were not making any money even though there website was being visited and used by millions of people every week. Think about it, wouldn't any normal human being want to make some money when you know that millions are using and benefiting from your service?
And that's an important and understated reason that sets these founders apart from many others. They were not tempted by the bait of the reward early on and stuck to their vision, which may look easier in hindsight but is actually is not an easy thing to do.
The critical question then is how long, cash flows permitting, should you be willing to wait? Or better still are you willing to believe in what they believed, which is that no matter how but you will be able to find a way to capture value. The important thing early on is not to worry about capturing more but creating more of it and enlarging the pie.
But what really makes these startups so great, different and insanely successful than many others that crop up in the technology space? Of the many reasons that have been analysed by people studying and writing about them, there's one often ignored aspect which relates to capturing value at the right time.
We know startups are about creating value (benefits), more and more value and tonnes of value. But when does one really capture a part of the value that you're creating? Capturing value is important because at some point you've to make money or otherwise you wouldn't be surviving for long.
If you've seen the movie Social Network, you'll know how Eduardo Saverin wanted to make money early on from Facebook by placing ads on its platform. And if you've read about Google, you'll know how hard Page and Sergey were pressed by their investors to generate some revenue for their search startup. In both cases, it was becoming difficult for these people (investors) to digest that they were not making any money even though there website was being visited and used by millions of people every week. Think about it, wouldn't any normal human being want to make some money when you know that millions are using and benefiting from your service?
And that's an important and understated reason that sets these founders apart from many others. They were not tempted by the bait of the reward early on and stuck to their vision, which may look easier in hindsight but is actually is not an easy thing to do.
The critical question then is how long, cash flows permitting, should you be willing to wait? Or better still are you willing to believe in what they believed, which is that no matter how but you will be able to find a way to capture value. The important thing early on is not to worry about capturing more but creating more of it and enlarging the pie.
