Slam Dunk Startups

I often hear people say things like “if only I thought of YouTube a year before YouTube did, I’d be rich”, implying that given first-mover advantage, that person could create a company as great as YouTube. A statement like this completely disregards just how difficult YouTube was to build, from having the balls to allow brazen copyright violation, to building a great user experience, to scaling out the ability to serve millions of video streams a day. In other words, 99 out of 100 people who may have had the same idea at the same time would have failed to create anything remotely as successful as YouTube.

Other startups fall into the same class. Companies like Google and Amazon owe most of their success to great engineering, great execution, and great scaling.

But which are the startups of the last ten years which really do owe most of their success to someone simply having a smart idea first and acting on it quickly? Perhaps an easier way to ask this question is “if you could have one business idea from the last ten years as your own, which idea could you most assuredly turn into a success?”

In trying to think of good examples, the best one that came to mind for me was HotOrNot.com. Super simple idea. Developed by two people. Very low expenses. Millions of dollars in revenue per year.

Any better examples out there? What are the most slam dunk ideas of the last ten years?

Like this entry? You can follow me on Twitter here, subscribe via email here, or get the RSS feed if that's how you roll.

51 Responses:

  1. Mike D. says:

    One quick note: I don’t mean to imply that HotOrNot.com is anything less than a great site and a great idea developed by two really smart people. Only that it was such a good idea with such good timing that it didn’t require a staff of 500, a huge investment, and tons of luck to be successful.

  2. Joel says:

    It didn’t take half a second before I came up with one – http://www.milliondollarhomepage.com/

    Instant millionaire – just from having this one simple idea. Brilliant kid. Easy execution.

  3. Newsvine would be nice, haha. I’m kidding. I think it would have been nice to have thought of MySpace first. Like the guy that runs Plenty Of Fish and works out of his home, by himself as a millionaire.

  4. @Joel That would have been nice to think of, it is the simple things. Perhaps I will do a million dollar YouTube video— any takers? You get 3 seconds of air time. haha.

  5. Sylvain Lemire says:

    I have no idea how much work this concept involved, but this is really an idea that is never as good the second time around:
    http://www.milliondollarhomepage.com/

  6. Hot or Not would be my choice too. Around 2000, there were loads of ratings sites but Hot or Not kept things simple and outlasted them all. Last.fm is a company I would have loved to have been involved with, although I’m not sure I’d have managed as well myself back when they were still Audioscrobbler, streaming music from a couple of servers.

  7. Sylvain Lemire says:

    Sorry for the duplication, I had not seen other comments before posting.

  8. gnome says:

    is there a set of fundamentals that all successful ideas share?

  9. Alex says:

    Apparently the guys who popularised lolcats are doing pretty well for themselves. I’d take a piece of that!

  10. Louis W says:

    What about Craigslist? That was just one guy for the longest time,

  11. It is largely about scalability. Even if you’re clever/lucky enough to have the idea, speedy enough to make it before anybody else, savvy enough to make it with little/no overhead, it’s damn hard to make something scalable enough to handle the traffic that ‘success’ would bring.

  12. Ryan Sims says:

    Twitter?
    http://twitter.com

  13. Joel says:

    @Ryan Sims: I wouldn’t put twitter in there solely because of the issues they’re STILL facing with regards to scaling. No way could that have been done by one person in their bedroom a la Craigslist/Hot or Not/Mill$Homepage.

  14. Tony says:

    While I totally agree with the sentiment that “ideas are cheap” and it’s the grunt work that gets you there, there is really something to be said for the first movers within a particular niche, especially when it’s a business that depends heavily on network effects. Ebay is the perfect example of this. There’s a lot of great software driving auction websites out there, but I’d rather go to the biggest marketplace with the most bidders.

  15. Doug says:

    It would have to be threadless.com. Sure not as simple as hotornot but I love the concept and the community they have established is a passionate one.

  16. Twitter is pretty ridiculously simple — I could write that app in a weekend. That having been said, I’m not sure how much money they’re actually making, and their popularity eventually caused them scaling problems that I wouldn’t have been able to deal with (they couldn’t, either). But, I don’t know of many other sites that are that popular and that simple at the same time.

    The thing about scaling is — ANY site is going to deal with scaling issues when they get that popular. No site is going to be THAT popular and be able to run well without dedicated systems staff. So, if you’re discounting any site that has scaling issues, you’re limiting yourself to sites that that don’t have to get insane traffic to make a ton of money.

  17. jason says:

    I would have to mention whateverlife.com – done completely by a (now rich) teenage girl – simply hosting “myspace layouts” for people to copy and paste into their profiles. Crazy.

  18. Joel says:

    @Jeff: I could have written Youtube too. A form to upload video, convert to FLV, allow for comments … etc etc. Would it have succeeded? Probably not.

    Twitter also has Evan Williams (and his money) behind it to help drive its success. To quote Mike in his post – “99 out of 100 people who may have had the same idea at the same time would have failed to create anything remotely as successful as YouTube.” … “Other startups fall into the same class. Companies like Google and Amazon owe most of their success to great engineering, great execution, and great scaling.

    The idea + the know-how + the time + the resources + serendipity. I think you pretty much have to catch lightning in a bottle to succeed at the scale of these previously mentioned ventures.

    Having said that – twitter’s idea -> brilliant. But to get where it is there are a LOT of moving parts that help it along, and EVEN THEN it’s not a sure thing that it’ll be up during SXSW or a Steve Jobs keynote.

    … aaand I’m rambling.

  19. Joel-

    It seems like we agree here, doesn’t it? I was saying, Twitter is a simple idea, but actually executing it is not so simple. Sounds like you’re saying the same thing.

    My point about scaling was simply that pretty much ANY site is going to deal with scaling issues at some point. I’m sure HotOrNot did. You can’t have a highly-trafficked site and run it on a $9 Dreamhost plan. It’s just not possible. So, to say that any site that has to deal with scaling is a site that doesn’t qualify as an answer to Mike’s question is to eliminate just about ever great startup over the past 10 years.

    Here’s an interesting counter to the question: what failed startup ideas do you think you could have succeeded with?

  20. Doug says:

    @jeff croft – that one is easy, webvan…

  21. Joel says:

    @Jeff: I stand corrected! You’re absolutely right. Apologies for the knee-jerk reaction.

    And as for your follow-up – I agree with Doug. Webvan and one similar to it – Kozmo.com. I loved Kozmo.

  22. Sean Madden says:

    Does it have to be a web app? If not, what about The Superficial or Hot Chicks with Douche Bags?

    While there is certainly something to be said for the comic talents of the authors, the idea is really simple: create a blog, collect paparazzi or user photos, make ridiculous commentary (oh, and try to include as many scantily clad women as possible).

    The idea is genius. It takes advantage of our cultural obsession with celebrity and our innate distaste for their wealth and fabulousness. We can simultaneously obsess about them AND laugh at them.

    These guys make a killing on advertising and they don’t know shit about technology.

  23. [...] to purchase it (for my Mother and for Sara). The conversation popped into my head today because of a post over at Mike Davidson’s blog about some of the big ideas that powered what he calls a &… – Youtube, Hot-or-Not, Google and Amazon. One point he brings up is similar to the thought I had [...]

  24. Steve Hubbard says:

    Plentyoffish.com

    Similar to hotornot.com in so far as being made by a limited number of individuals (in this case one), pulls in millions of dollars in revenue each year, requires little effort to maintain, and anyone who has visited the site knows that execution, at least in so far as design is concerned, wasn’t high up on the original priority list, hence it’s possible anyone could have created it (unlike YouTube or Facebook).

    Also, should Markus tire of the site, he’s sell it for a rather sizeable figure.

  25. brad says:

    Jump the shark was recently (a year or two) sold to TV Guide for at least over 1 million.

    http://www.jumptheshark.com/index.jspa

  26. John Whittet says:

    My first thought was Craigslist, too. Currently, a staff of 25 with an estimated revenue of $150 million in 2007 (private company). Simple to write, no advertising, and everything on their terms. Oh, and the ninth most visited site in the United States.

  27. Devon says:

    Would’ve been nice to think up something like ebaumsworld.com

  28. Squarespace

    http://www.squarespace.com

  29. I think you could argue that to a degree, others did get there before YouTube did. Mark Cuban created Broadcast.com and for a time, had the game in his back pocket. You can blame Yahoo! for buying it only to let it sit and rot, but had it not, there may never have been a YouTube.

    Or you could consider that somebody else did get there first, YouTube’s current owner, Google. In many ways, their service is still superior even today. They let you upload larger videos, allow you to download almost any video as an avi without DRM, had YouTube beat in infrastructure at every single turn, and of importance perhaps only to media owners, have had a hands-on content filtering system active from day one.

    Ironically, I lost a fight with Google over a clip from the Colbert Report, one only about 30 seconds long — well within the bounds of fair use — that was rebuffed at every turn without any of my questions, examples, and citations of the law itself and related case law being addressed. I had them beat as a matter of law and any actual lawyer on their side could have told them the same, but they decided to play it safe and ended up screwing their own agenda in the process.

    I say ironically since now that Google owns YouTube, they are the #1 copyright infringement host around. They had a smooth system of review in place that in many ways was actually working too well, in that it was shutting out perfectly legal content. Yet, for whatever reason, they decided they’d rather get sued by Viacom than simply apply their current system to the new site.

    Anyway, it puts a nice exclamation point on this post. Google did get there first, with their near unlimited resources, and still got skunked.

    Yet there are examples to the contrary. 3DFX got there first and died a slow, horrible death. TiVo isn’t looking so hot these days, either.

    In a way, I guess I’m showing the other side of this coin. Getting there first isn’t always the game; getting there is just the beginning, you’ve still got to make the right evolutionary choices to survive.

    As for my pick, I’m going a bit outside the box to suggest Jason Calacanis for founding Weblogs, Inc. He really took the idea of montizing blogs and transformed it into a business — one that was generating $100k per month in revenue before AOL/Time Warner bought the company just from AdSense.

    A great example of someone else stealing somebody else’s great idea quickly enough to ride that wave would then be Nick Denton, for creating Gawker.

    If you want to go in yet another related direction, you could pick companies that got there first, had the technology and smarts, and failed anyway. The first company that comes to mind for me would be Nullsoft.

    Or what’s left of it.

  30. The Million Dollar Homepage’s success wasn’t as simple as “build it and they will come” – the kid whose idea it was had to invest quite a bit into marketing it and playing the media game, plus he had enormous bandwidth and speed issues to cope with as well.

  31. Andreas says:

    i think popurls.com ?

  32. Jeff says:

    My new favorite is Swaptree.com. Great concept.

  33. Travis says:

    How about tinyurl.com? Not only is it a simple idea…but it solved a pretty big problem.

  34. Give me HotOrNot and I’ll give you a better HotOrNot. Great idea, but just needs a easier/better user interface.

  35. Jim Ray says:

    I CAN HAS CHEEZBURGER is number five (!!) on the Seattle Startup Index.

    LOLNEWZ would be a surefire addition to the msnbc.com/Newsvine family, no?

  36. Million dollar homepage was the first thing that came to my mind as well–Easy to do, and monetization is built right into it. That’s the problem with stuff like Twitter getting so big with no real plan (that I can see) for actually making money. You don’t pay, there’s no ads…the only money that I can see that they can really make is from VC funding.

  37. @Jeff Croft: Twitter is a terrible example because to this day it does not make a single cent. It is an extremely expensive proof-of-concept that could not have been executed at all if not for bizousands of dollars of capital. I love Twitter, but we have to realize that we are being given a free ride on it, at least for now. I still have no idea if it can survive an eventual “monetization” stage. Will you keep using it when 1 out of every ten tweets is an ad?

    As for the core question, well, in addition to products there are also pure-play content projects that are making very good money. Which is to say, *blogs*. We’re not talking billions of dollars and thousands of new jobs, but enough to make the person who got the idea extremely happy. Everything from Nick Denton’s mini-empire all the way to popular one-person bloggers like Perez Hilton who make money just by writing stuff and selling eyeballs.

    The slam dunk can sometimes happen just by thinking about what people want to read about and realizing that you have the skills to actually write it yourself.

  38. Aran says:

    I would choose Amazon. The initial idea behind Amazon –”buy any book you want” — was an absolutely brilliant idea, because it capitlized on:

    1) neighborhood bookstores were ALREADY dying out
    2) academic people needed books that you couldn’t find in these bookstores anyways
    3) books are easy to ship compared to other irregularly shaped objects

    I think their continued dominance had a lot to do with the fact that the initial idea behind them was such a powerful one. I remember meeting an astronomy professor in 1997 who was going absolutely bonkers about how many books he could finally buy now that Amazon was around.

  39. Mike D. says:

    Aran: If you think there’s a 90% chance you could have created Amazon if only you had thought it of first, you might be the smartest person alive. That was a tough, tough company to start and to grow. Definitely doesn’t fit into what this question was asking.

  40. Jim Ray says:

    As if the universe itself is responding to your post, Mike:

    HotOrNot acquired for $20M

    Who knew the “virtual flower” business was so, um, hot?

  41. Twitter is a terrible example because to this day it does not make a single cent…

    …which is why I said…

    That having been said, I’m not sure how much money they’re actually making.

  42. Tim says:

    Look out for one coming up this summer that will simply blow your mind away – of course it is finance related – and i bet you techies would wonder why on earth did I not think up of that! Keep guessin’…

  43. I think our alma mater SeasonTicket.com was a great idea that had all the potential that we once dreamed it had. But, imo, there were 2 problems: 1) the revenue model, and 2) too soon for a strictly broadband play.

    Had the revenue model been subscription rather than advertising, it might have been able to show a path to profitability, and therefore been more inviting for a second round investor. It also would have weathered the dot com bust a little better than it did.

    We did the slide shows for AllStarBalloting.com but wouldn’t do them for SeasonTicket.com. I think if we had been willing to do so for both it would have attracted dialup users.

    But in general, there’s always the nebulous ‘black box’ in the early stages of system/application architecture, especially when the idea belongs to the uninitiated. People with the industry experience and the technical know-how are expected to turn the black box into a working application.

    And that is how careers are launched.

  44. MetaFilter, particularly AskMetaFilter.

  45. drew says:

    Yeah, swaptree.com.

    “Awesome! Totally Awesome!”

  46. I have a million great ideas, unfortunatly I do not have the money, time, or skills a lot of the time… to do them.
    I don’t think simplistic, thats crazy, I am always thinking up these very useful yet ellaborte sites that will take too much time.

    However, I would like to also point out that there are simple websites that I know many more people would have NEVER thought of that are now popular.

    http://www.twitter.com

    Who would have 1) ever thought of making a blogging site that will only allow you 160 charaters 2) this is so simplistic (even more so in its infancy) 3) ever thought this site would go anywhere.

  47. Now re reading comments I can see I am not the first to jump on board, but let me also point out another website that has spawned off twitter, that is also simple
    foamee.com

  48. Kevin says:

    The million dollar homepage is not a startup it is a work of art.

  49. Jeff says:

    StubHub.com

  50. krystyn says:

    First to come to mind for me is Craigslist as well. I saw “Craig” on Colbert a while back and his interview was phenomenal.

    I think any idea that is “I just saw a need and did it” is going to do better than a “I wanted to make money on the web and tried to think of a way to do it.”

    Except for maybe the Million Dollar Homepage. That’s just pure genius.

  51. Chris says:

    I don’t know if its producing millions or not, but it strains the imagination to think that http://www.icanhascheezburger.com/ is making money at all.

Shared
How to travel around the world for a year:

Great advice for when you finally find the time.

LiveSurface:

A fantastic app for prototyping your design work onto real world objects like billboards, book covers, and coffee cups. This seems like just as great of a tool for people learning design as it does for experts.

50 problems in 50 days:

One man’s attempt to solve 50 problems in 50 days using only great design. Some good startup ideas in here…

How to Do Philosophy:

If you’ve ever suspected that most classical philosophy is a colossal waste of time, Paul Graham tells you why you’re probably right.

TIME: Why Medical Bills Are Killing Us:

Stephen Brill follows the money to uncover the pinnacle of corruption that is the U.S. Health Care system. A must-read article if there ever was one.

DIY Dot Org:

A beautifully designed site full of fun and challenging DIY projects. I could spend months on here.

The Steve Jobs Video Archive:

A collection of over 250 Steve Jobs videos in biographical order

Self-portraits from an artist under the influence of 48 different psychoactive drug combos.

Water Wigs are pretty amazing.

David Pogue proposes to his girlfriend by creating a fake movie trailer about them and then getting a theater to play it before a real movie. Beautiful and totally awesome.

Jonah Peretti's letter to BuzzFeed’s employees:

If you’re wondering what a excellent blueprint for a modern media company looks like, look no further than Buzzfeed CEO Jonah Peretti’s latest email to his employees. In it, Peretti explains a lot of his company’s virtues, the most important being a relentless focus on always providing what’s best for the user. Vox Media (operators of The Verge) is the only other company I can think of which approaches this level of reform and execution.

The Covers Project:

I love this so much: a cross-referenceable database of cover songs, searchable by song or artist. Slowed down, acoustic covers — no matter the song — are so enjoyable to me that I wish it was a requirement to play one at every show. If you like them as much as I do, make sure to check out M. Ward’s Let’s Dance or Sun Kil Moon’s entire album of Modest Mouse covers.

“More and more people in this country no longer make or do anything tangible; if your job wasn’t performed by a cat or a boa constrictor in a Richard Scarry book I’m not sure I believe it’s necessary. I can’t help but wonder whether all this histrionic exhaustion isn’t a way of covering up the fact that most of what we do doesn’t matter.”
- Tim Kreider’s denunciation of the cult of busyness is excellent. (via jimray)
The iPhone and Disruption: Five Years In:

Take your pick of about 20 great quotes from this Daring Fireball article. My personal favorite:

The iPhone is not and never was a phone. It is a pocket-sized computer that obviates the phone. The iPhone is to cell phones what the Mac was to typewriters.

sirmitchell:

Challenges of Getting to Mars: Curiosity’s Seven Minutes of Terror

The precision and innovation that is required for space exploration just blows my mind. I did not realize that Curiosity will have to basically land on Mars completely unaided by man, but it’s so much more complicated than that.