[Search-l] Old markets and methods vs. new

[Aerik Sylvan]

On Wed, May 28, 2008 at 5:56 PM, Jason McCabe Calacanis <jason at calacanis.com>
wrote:

> Historically, building a media company/property or large internet service
> requires a large number of people. These people are very expensive, and as a
> result you need capital.
>

Hmm... I think you're already building some assumptions in that I don't buy
- at least not entirely: that worthwhile ventures are predominantly a "media
company/property or large internet service".  Many worthwhile ventures
(content providers or services) started out small - perhaps as niche
providers, or perhaps just not of a large scale.  Then, the requirement for
a large number of people - If the company doesn't have to be big, you don't
need a lot of people.  I think Craigslist (for just one example), which is a
huge service, has a staff of 25?  And it started out smaller than that.

In general, capital is given to leaders with track records and good ideas
> over people with ideas--even if those ideas are better.
>

Okay, sure... but if you don't need all that capital in the first place...
Actually, what you need that capital for is *marketing*.


>
> We have seen a small handful of things that have grown large in technology
> that are not funded this way. The wikipedia and certain open source projects
> come to mind as idea-driven projects that have reached scale without
> capital.
>

It would be interesting to measure that - "small handful of things that have
grown large" - Google started small, Craigslist, and... many, many more?


>
> Truth be told, ideas are easy and not very important. Everyone has ideas
> and typically smart folks all come to the same ideas over and over. The only
> thing that matters is execution over a long, sustained period. That's why
> Mahalo is based on a five year plan, 20% of that plan is public so far...
> So, you will need to wait to see the next 80%. :)
>

I think ideas are more important than you seem to - without ideas you've got
nada - but your point about execution is a good one.


>
> In terms of specific ideas if you make a list of them I will tell you
> exactly how likely they are to work on a percentage basis.*


Hah!  I'm not sure if I'm supposed to take you seriously, or not!?


>
>
> Best J
>
>
Thanks for the conversation - this is interesting stuff.  I still stand by
my original postulate:  that in the age of the internet, success does not
depend nearly as much on old-school business dynamics because the costs of
development and distribution are much, much smaller.  Primarily things
continue to work the way they do because we're building it that way - not
because it needs to be.  I'll throw out one semi-hypothetical example to
illustrate my point:

Imagine a search engine that uses as a major factor in it's rankings the
number of inbound links.  It's just one factor - but a significant one.
Now, take hypothetical website A and imagine that website A was created in
1999.  Website B has comparable value to a consumer, whether it be a
service, content, etc, but website A has a lot more inbound links for no
reason but that it has been around longer.  Because it has more links, it
ranks more highly - since it ranks higher it gets more hits.  Because it get
more hits, more people link to it.  Self-reinforcing.  Even if website B has
twice the content, it will have a hard time overtaking website A in
rankings.  Unless it spends a lot of money on marketing to draw in more
users.  Does it have to work this way? No.  Mahalo does the same thing -
reinforces the position of the incumbents.  Users would be better served by
an intelligent (whether computer powered, or human powered) system that is
constantly on the lookout for for the *best* resources, whether they be new
or old.


Best Regards,
Aerik


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