Episode 25 – Million Mice or 1 big elephant
One of the largest strategic errors for early stage companies is the belief that one key partnership with a large player is what is needed to “make the company.” This is commonly referred to "hunting elephants." Sometimes Board of Directors drive this and sometimes management hungry for some external win drive it. While this is true if your business is to OEM your service to others like VideoEgg, in most consumer Internet destinations this is just not true.
Tell me, what big deal made YouTube go from 0 to 10M unique users? What big deal made Myspace or Bebo go from 0 to 10M unique users? What about Digg, Slide, Mebo, Flickr, Delicious, Technorati, etc. You get my point. Partnership rarely make a startup. Of course Yahoo made Google with that partnership, but that is more the exception than the rule. Go though this <link> list of the top 20 hottest startups and you will see that most grew either organically or through lots and lots of small partnerships.
Why can’t a big deal make a company? First big companies take too long to get a deal done and implemented. Second, most big companies have too much leverage and force the startup to give up so much in the negotiation that the deal becomes unprofitable. Third, most big deals are for distribution and there is always an assumption that consumers on the big company’s site will take to the offer. Frequently this assumption proves wrong. I remember in 1999 when I was running my last company Andale, we did a deal with Intuit’s Quickbooks group. It had us paying a lot of money in return for distribution in Quickbooks to help reach small businesses. It was a total disaster. I will never do deals like that again.
The most powerful deals are the ones that you can get done with hundreds, thousands, or millions of partners in a mere matter of weeks. I call this the million mice strategy. Yes it has no sex appeal and no press release, but over time it slowly builds up and up until you have a tidal wave of relevant and cost effective traffic.
I have seen sites successfully gain distribution with the million mice strategy. Effectively Slide has “partnered” with millions of myspace users who distribute its widgets. Google has done this with Adsense.
When we hired Mark Moran to be our VP of Business Development it was exactly this kind of mice hunting that we had in mind. He has done exactly this with a new program that we will announce shortly…
24 - Land Invasion, 23 - Nuclear Power Plant,
22 - Fast iteration ,
21 - Like.com prognosis ,
20 -Launch Video and More ,
19 -PR Coverage of Like ,
18 - Like.com Launches ,
17 -Pre launch ,
16 ,
15 ,
14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .
Hey where do you live and r u selling mice
Posted by: Kerry | May 10, 2009 at 05:17 PM