Category Archives: Founder Stories

The Little Startup That Could Have Been

While Dropbox and Box command the media attention and VC investment, Yousendit – the service that helped pioneer file sharing – is still alive and, for the time being, doing well.

The Year is 2004

Let’s go back to 2004 when Yousendit was launched. Sure, there was Kazaa, Gnutella, and others offering peer-to-peer file sharing, but if you wanted to send someone that huge Powerpoint or Photoshop file (without the risk of getting a virus) you didn’t have many options other than burning and mailing a CD.

At the time, your Hotmail account allowed you up to 2MB of file storage. You had to keep deleting old emails with attachments. Google’s newly released Gmail service giving 1GB of storage wouldn’t be publicly available until later in 2007 with about 2GB of storage (which would then prompt Yahoo to give unlimited storage to their Yahoo Mail users). And businesses running Microsoft Exchange servers limited users’ inbox size as well to maybe a couple hundred megs. I still remember our IT admin kept complaining that we were emailing files to each other too often and he needed more disk space.  And I got the “your mailbox is over its size limit” message every other week.

Enter Yousendit. The service allowed you to upload a big file, then email a link to whoever needed access. It was confidential (only the recipient with the link could download the file), fast (no attachments), and pretty affordable (files up to 5MB was free). Brilliant. Usage skyrocketed. What could go wrong?

The FORGOTTEN founder

I always wondered why Dropbox and Box, to name just two services, were able to become so successful so quickly while Yousendit seemed stuck in the past. Sure, Dropbox is not focused on file sharing per se, they promote “cloud storage”, but Yousendit could have taken the market leadership position easily. And only recently (2011) did they announce a “dropbox-like” feature giving unlimited cloud storage for their users. They already had the infrastructure, the product, the users. What happened?

My answers came in the form of a recent Inc Magazine article, The Forgotten Founder. It sheds some light into the company’s story, and helps explain why such a promising service was plagued with problems. Also shows how important it is to have a great team assembled and what mistakes we all should try to avoid. Was this the reason Yousendit didn’t evolve the service until now? I can’t say for certain but I bet it has a lot to do with it. Could Yousendit have become what Dropbox is today?

The future

Box and Dropbox are the darlings, attracting hundreds of millions in capital investment. But they are not alone… and there is always someone that can jump into this game and shake up the market. Check below a short list of similar file sharing / cloud storage services, their launch dates, and total VC investment in each company to date. Let’s see what happens next! 

File Sharing and cloud storage solutions

  • 2004: Yousendit ($48.7M)
  • 2004: SugarSync ($41.5M)
  • 2005: Mozy ($1.9M, acquired by EMC in 2007 for $76M)
  • 2006: Box ($159M)
  • 2006: Carbonite ($66M)
  • 2007: Dropbox ($257M)
  • 2007: Google Docs
  • 2007: Jungle Disk (Acquired by Rackspace in 2008)
  • 2007: Windows Live skydrive
  • 2008: Syncplicity ($2.35M)
Sources for the figures are Crunchbase and Wikipedia.
For a visual representation of the funding timeline for the key players, see the image below (click to enlarge).
Cloud Storage Funding Timeline

Funding timeline for key cloud storage players


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Are You Feeling Lucky?

What luck has to do with it? It seems many startup founders feel like some are luckiers than others. The solo entrepreneur that got that big VC deal. That team of nobodies that was bought by Google. Or even those guys that you met at the coffee shop and didn’t seem to know what to do and now are going for an IPO. Luck?

What doesn’t kill me makes me stronger

A really good article published by the New York Times written by Jimm Collins and Morten T. Hansen explores the events that can shape a company. It talks about how Bill Gates made it big, and at first you may think he was extremely lucky. But if you dig further, you can see that the series of events that led him to be successful with Microsoft could as well have taken many more people in the same direction. Why didn’t others, equally positioned to reap the rewards, succeeded?

“When the time came to execute on their good fortune, they stumbled. They didn’t fail for lack of good luck. They failed for lack of superb execution.”

Execution is the key word used by the authors and one you have certainly seen elsewhere. VCs, Angels, and experienced entrepreneurs all talk about execution. You have this great idea for a Facebook killer? A revolutionary iPhone app? A ground-breaking enterprise software? Great. So do hundreds of others. What will ultimately decide who is successful is how each person (or team) executes.

Bad Dreams

It is also interesting that the article talks about the bad moments that every company faces. And you know of many, for sure, that have stumbled again and again only to finally find their mojo and come back with a vengeance. Startups that fail abound, those that succeed are rarely remembered for their darker times because they were able to learn, overcome them, and become better.

The Question You Face

The question you and all of us startup founders face is not whether we’ll be lucky. Is whether we’ll be able to identify lucky events and how we respond to them. As the authors put it:

“There are smart decisions and wise decisions. And one form of wisdom is the ability to judge when to let luck disrupt our plans. Not all time in life is equal. The question is, when the unequal moment comes, do we recognize it, or just let it slip? But, just as important, do we have the fanatic, obsessive discipline to keep marching, to push the opportunity to the extreme, to make the most of the chances we’re given?”

Check out the full article, it’s worth it.

Behind the rise of Jeff Bezos and Amazon

There’s an interesting writeup on Wall Street Journal, “Birth of a Salesman“, about the early beginnings of Amazon.com and how Bezos started it all.

Read the full article here.

Bootstrapping to Success

Rob Walling, from Micropreneur Academy, has a great post about successful startups that bootstrapped their way to becoming profitable. It’s a great list and nice tales that gives us bootstrappers more incentive to keep on going!

Check out “Ten Highly Successful Bootstrapped Startups” for the full article.

 

The Secret Language of Entrepreneurs

Dictionary by jwyg @ flickrThis is a pretty funny (and true, I have to admit) list of terms used in the startup scene, be it Boston, New York, or Silicon Valley.

Stephanie Kaplan, Co-Founder & CEo of Her Campus Media, tells us what commonly used phrases really mean, so that next time you think you got that VC interested, think twice. For example:

  • We’re swamped right now: 1. I can’t deal with you right now; also: You’re annoying me (See: “Check back with me in 6 months”) 2. (In rare cases) We’re actually super busy right now.
  • This week is crazy for a call, so why don’t you just shoot me some ideas via email?: You are not worth taking the time for a phone call.
  • That sounds really interesting: I have no idea whether your offer is good for my company or not, so I’m going to say the most neutral thing possible for now until I talk to my advisors.
  • Our web team is slammed right now: My technical co-founder is really busy.
  • Let me check with legal: Let me put the phone down for a minute and ask my co-founder.
  • Let me check with accounting: Let me put the phone down for a minute and ask my co-founder.
  • Let me check with the web team: Let me put the phone down for a minute and ask my co-founder.
Check out the full article, “Entrepreneurese 101here.

Now I Feel Old! List of Young Entrepreneurs by Inc.

As if I haven’t already been thinking that the grey hairs on my head have been taking more space than usual, Inc Magazine just published a list of “30 Under 30“, telling us that a lot of the startups we know, use, and love have founders who are (ghasp!) under 30 years of age!

Some of the companies you undoubtedly have heard of:

  • 99designs (Matt Mickiewicz, 27)
  • Dropbox  (Arash Ferdowsi, 25; Drew Houston, 28)
  • Foodspotting (Alexa Andrzejewski, 27; Soraya Darabi, 27; Ted Grubb, 29)
  • Grasshopper (Siamak Taghaddos, 29; David Hauser, 29)
  • Hipmunk (Adam Goldstein, 23; Steve Huffman, 27)
  • inDinero (Jessica Mah, 21; Andy Su, 20)
  • Instagram (Kevin Systrom, 27; Mike Krieger, 25 )
  • Onswipe (Jason Baptiste, 25; Andres Barreto, 24; Mark Bao, 18)
  • Quora (Adam D’Angelo, 26; Charlie Cheever, 29)
That’s quite a list. Check out the full listing of all 30 companies at Inc’s website

What Makes a Successful Startup?

An interesting post from Steve Blank talks about how he met the guy who went on to found The Startup Genome Project and just released their first report on what makes a startup successful.

Key findings are:

  1. Founders that learn are more successful
  2. Startups that pivot once or twice times raise 2.5x more money
  3. Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet
  4. Investors who provide hands-on help have little or no effect on the company’s operational performance
  5. Solo founders take 3.6x longer to reach scale stage
  6. Business-heavy founding teams are 6.2x more likely to successfully scale
  7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects
  8. Balanced teams with one technical founder and one business founder raise 30% more money
  9. Most successful founders are driven by impact
  10. Founders overestimate the value of IP before product market fit by 255%
  11. Startups need 2-3 times longer to validate their market than mostfounders expect
  12. Startups that haven’t raised money over-estimate their market size by 100x
  13. Premature scaling is the most common reason for startups to performworse
  14. B2C vs. B2B is not a meaningful segmentation of Internet startupsanymore because the Internet has changed the rules of business
It’s worth checking out. Get the Startup Genome report here.