Tuesday, August 22, 2006


Back from Chicago, which will probably be my last vacation for a while based on the amount of backlog I have... amazing how much piles up over four days now.

Just wanted to chime in on the whole Kiko thing. I won't even bother linking to the auction and the various points and counterpoints because there has been so much written about it at this point. Kiko made the mistake that most "failed" businesses make. No, it wasn't lack of revenue that killed Kiko. It wasn't a bad product that killed Kiko. And it certainly wasn't Google that killed Kiko. It was impatience.

In this 24-hour news cycle, buy-now, pay-later world, people expect results immediately. Throw a product or business out there, and if it doesn't succeed immediately, throw the idea out and start over. I'll clue all the potential entrepenuers reading this blog into a little business insight.... most businesses are not sucessful immediately. Get rid of the idea in your head that your business will get Dugg, and you'll be going public by December. It's very very unlikely to happen.

I havn't really gone into my background of how I know anything about business, but I come from a family of entrepeneurs. My grandpa started a printing business back in the 50s with a friend. They barely scraped by, just paying the bills for years, until the 70s when the business took off and they were rich (The business then failed in the late 80s, more on that some other time). My dad had a sign business in the 80s, which my step-mom then took over. They did vinyl for vans out of a barn for years before they landed a few medium contracts, and then huge contracts like the Baltimore-Washington International Airport, the National Aquarium, and almost every public school in Maryland.

Google took at least 4 years before it gained momentum. FogCreek had to do consulting for years, 37signals did web work for years until they found their niche. Microsoft made software for a hobbiest computer for years before they moved the Redmond. My own used car site took 3 years to get popular, and 6 years to turn a serious profit. Show me a sucessful business, and nine times out of ten, there is a momentum curve to it.

If you are not ready invest several YEARS in your business idea, don't bother. If you are just waiting for the one get rich quick idea, you're better off playing the lottery or putting some money on red. Why is this? Well, some people don't trust new businesses, they want to see you around for a few years. But mainly, there is this mysterious momentum with a company, where at some point you'll reach a critical mass and orders will come flooding in. Usually this is because you have a REPUTATION, not because 1000 anonymous people "dugg" you because you have some cool AJAX effects.

Anyways, what could Kiko have done? Well, I seriously almost considered putting in a bid for them, except that A) I don't want to mess with rails, it doesn't work with anything I have going on B) I don't have time to mess with making the money back, even though I'm convinced one could.

The bottom line is that Kiko was too lazy to turn a profit. They clearly hoped to get bought out, which is again much less likely then hitting red in roulette (or even hitting a number exactly). But they had lots of users, lots of hype and lots of traffic. They themselves admitted they were distracted. But they were one of the first on the block, and the presumably still have decent traffic. They could have at least broken even by offering a premium service, or even better an API. What about a Kiko component, so other web based software companies can include a cool web calendar easily? Advertising? Sure. But it would have to be from a channel that pays up front, instead of the new fangled cost-per-click model. Or even just use Kiko.com to plug some new product idea that actually has a revenue model.

The bottom line is, if your product is not making millions in the first month, that DOES NOT MEAN IT IS A FAILURE. I believe almost any product can make money somehow, it just takes hard work. If you thought your idea was great originally, what has changed that? Don't give up on your business until you have tried everything (no matter how tedious, expensive, humiliating, annoying, etc...) to get it to succeed. Give it at least three years, not three months.


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