Everyone it seems agrees a growing sizeable amount of traffic is essential for any web property to succeed; what’s more no significant traffic means certain death online, with the only uncertainty involved being how long before the corpse finally has to be disposed of.
And these self-evident facts are no doubt behind the web saying “traffic is king” but given the current situation online you really have to question this supposed truism.
Consider the paradoxical position where the third and fourth most popular internet destinations in the world (according to AEXA.com), www.facebook.com and www.YouTube.com find themselves with literally millions of visitors each day yet they are struggling to turn a profit.
Sort of makes you want to ask: why do they bother?
Why would any thinking business person spend millions of dollars on software, servers, bandwidth and highly paid technical staff in such an unknown territory as social networks if there is no foreseeable return?
We do know in nearly all instances they are US based start-ups, are venture capital funded, and to outsiders seemingly predicated on the much hyped pop philosophy “build it and they will come” of Kevin Costner’s Field of Dreams.
But with examples like Google (an immensely profitable search engine who also wants to be a social network), starting off with no business model, no business experience and no business plan, it is perhaps not surprising there are apparently still plenty of people (in the US anyway) lining up to follow in their super sized footsteps!
I suspect, like property, the mantra “location, location, location” has quite a lot to do with this phenomenon since virtually all the well-known examples are located in the US (mostly in Silicon Valley) and nearly all are exclusively funded by US-based VC companies, all with well-established links to major US universities such as Stanford.
History, and I would say also business history, has a habit of repeating itself and you only have to go back 100 years to see a virtually identical situation with the then fledgling US automotive industry.
In fact, I would say Detroit 1909 has become Silicon Valley 2009.
The not-so-young Henry Ford had secured massive capital backing for his second car making start-up after his first venture folded with big losses. In today’s terms much more than Google!
And, like Silicon Valley, Detroit had the space, the people, all the specialist suppliers and access to capital to ensure he succeeded mightily – some things it appears never change.
For the record, Henry Ford made significantly more (equivalent) revenue and profit in three years before 1909 than either Google or Microsoft put together.
Like today’s social network pioneers, old Henry had a vision of what he considered people wanted (personal transport) and he went ahead and built them, millions of them. And in the process he turned a rich man’s hobby into an everyday essential for the common man throughout the US and the world.
Robert Lacey’s very readable ‘Ford – The Men and the Machine’ records he was also very persistent, did not have much formal education or the benefit of market research and disagreed with virtually everyone else in his industry (and his own company) about nearly every aspect of his famous Model T.
It seems, amongst other things, completely overlooking the current situation, ignoring what everyone else sees as insurmountable obstacles and being cast in the ‘obstinate bastard’ mould are essential qualities if you want to succeed as an entrepreneur.
Now there’s a thought!
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