For once I think Arrington has a valid point. What success criteria do we apply to startups? It seems like Business Week sees VC capital as success. The article TechCrunch points to (http://finance.yahoo.com/career-work/article/106341/Most-Suc...) has the startups listed by order of funding starting at $90m through to $30m.
From the point of view of most people here I think we would regards that much VC not making a good startup in most cases.
I'd be interested to see a good framework for measuring success in startups that could be used by VCs and the media alike.
> I'd be interested to see a good framework for measuring success in startups that could be used by VCs and the media alike.
Breaking even seems like a good starting point to me.
Of course, this is not good from the VC viewpoint. VCs hate it when you break even early and they don't have a controlling interest, because it means they can't grab more shares (in exchange for new funding which you would then need and they can and will leverage that need) because you don't need them for growth.
Also, success is a relative thing. A small firm that doesn't take VC and never reaches the multi-billion dollar heights of Google, but has happy customers, happy employees and founders that enjoy their work is successful in my book.
A company that takes millions in VC money, lets the VC dictate company policy and has the whole thing run into the ground is a failure.
Measuring success does not happen across a single axis.
Unless you define success in the context of what VCs want from your company, the definition becomes blurry very fast.
A framework that will satisfy both VCs and the media isn't that hard to formulate. The media will simply copy the VC parameters, most of which is number games.
But this is neither a media nor a VC board, so the question is - would you want to work for or start a company that is run by VC/media rules?
#users/traffic, and if they've had them for a while, revenue.
The only thing cuil were successful at was getting well known. Unfortunately they got well known for returning terrible search results. So now they have twice as much work to do. Or I guess they could just pay some naming company to come up with a 'rebranding' campaign.
I think that's my point, traffic is great, but when does revenue matter? Youtube still has insane traffic but even Google can't make them close to profitable.
> good framework for measuring success in startups
Accounting world is partial to profits as a sane measure. Investors should look at ROI. In other words no startup is successful until it's making money. Which I don't think is an unfair measure.
Now if you want to compare pre-success startups to one another, good luck. A measure doesn't exist. That is why the whole VC system exists and investors are willing to gamble 1 in 5 or 1 in 10 startups will pay off.
And yet Powerset gets no mention. We made a big splash, and got acquired by a company that is one of the few that has any chance of taking on google head-to-head.
But Cuil, with there "scaling is our product" plan, weird name and "search-is-hard" image interface get mention here?
The industry pundits can be strange, unpredictable people.
In my experience, I've never seen outright examples of corruption. Even fairly powerful folks like Arrington were always very fair with us so long as we were fair with them. Heck, even the mean uncov guys didn't have many mean things to say, so they didn't say much at all.
I think that the list we're discussing here is more of an example of Gross Incompetence. I think we can all agree we've seen examples of that. :)
Although it does seem weird. Cuil has always seemed to be far more of a flip company than Powerset ever was. It seems mighty difficult to sell a customer on "Our search is just like Google's, but we have fewer servers!" The Google name has way too much power for a geek-appeal like that to work.
Calling a flip company successful when it hasn't flipped at all seems weird to me.
This is what spending money on marketing people with connections gets you.
But not saying this how it should be done, I would probably invest that money in getting a better product and thus users - a better strategy in the long haul.
I don't understand why everyone is whining yet not suggesting an alternative.
I would pick Twitter... :D
All in this year, they moved Evan Williams to CEO (good idea), raised over $20 million in funding (from Union Square Ventures, Jeff Bezos, and others), acquired Summize (easily the hottest app in a while), grew ridiculously popular while stabilizing their service/uptime, and turned down an acquisition offer by Facebook (rumor?). Now that is success.
Regardless of your apparent misunderstanding of what qualifies as a startup, Twitter, in fact, does have a dollar in revenue. Their Japanese version, which also launched this year, serves advertisements. :D
“It’s like the stupidest question in the world: How’s Twitter going to make money?," said Union Square Ventures’ Fred Wilson, another investor. "It’s like 'How was Google going to make money?'
http://blog.wired.com/business/2008/10/twitter-to-get.html
It's not so much that they have no revenue it's that they have no plan for revenue. While they may turn into a great business at some point, they aren't one now. Google's creation of AdWords is not an excuse to fund other ventures who have no idea how to make money. There's not an AdWords for every business.
Again, Twitter may become the next Google but that does not mean they are currently one of the most successful start ups. SpaceX inks a multi-billion dollar contract and we're busy talking about how successful Twitter is.
I see what you mean. I am measuring startup success in potential revenue. I think a startup ceases to be a startup when it becomes a profitable business.
Also, I wouldn't consider SpaceX to be in the same boat as Twitter, and I assumed we were talking web startups since the Cuil controversy started this. If we were talking tech in general, I agree, something like SpaceX would be preferable over Twitter any day.
Maybe Business Week just did this to try and cover up the shame of them and other msm relentlessly talking up and covering Cuil before its launch and epic fail?
