Kevin Rose had everything going for him. A strong personal brand and network, $1.7 million in funding and a team of super smart people that could probably build any consumer web/mobile concept you threw at them – and build it well.
What they didn’t have was a great idea. They had a social concept without a monetisation strategy. That is a tough gig.
In the midst of all the consumer internet noise, founders are forgetting that business is still about turning a buck. From the outset you have to know how you are going to earn a dollar and that comes down to having a business model that can make money, no matter how good you are at executing on a technical challenge.
Social does not start out as a business model
The major social successes such as Facebook, Twitter, Instagram and Pinterest never started out as business ideas. They were social experiments by and large. Through a combination of vision, timing and luck they attracted users and grew quickly. Then they raised money.
Facebook received its famous $500,000 round from Peter Thiel after Harvard and a number of east coast universities were already using the system. They had hundreds of thousands of users by then.
Oink set out to start a social network by raising funds upfront and hoping they would hit the sweet spot that would result in adoption. It should happen the other way around.
Kevin pulled the pin three months after the app was launched. Failing fast is all about putting your ego aside and being real with yourself. You have to ask yourself the tough questions. Am I pushing shit uphill? Is this thing worthwhile pursuing over the long term? Am I too late? Can I compete with the established players? Will it make money given the resources I have?
Even better, ask those questions before you start. The answers are usually obvious. Don’t ignore them. Rather wait until you find something that ticks the right boxes; then go for it.
The lesson here is that execution is NOT everything. You still need a good business idea.