Comment by netcan | Hacker News Reader

Comment by netcan | Hacker News Reader

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I certainly wasn't trying to insult Vidly, more try and understand the rationale for such a startup existing.

Here are some possible rationalisations for such companies existing, such companies betting on acquisition by a limited number of buyers & other concerns:

- Smaller companies can sometimes do things better.

- Smaller companies can sometimes do things cheaper.

- Small companies can fail, so they can try riskier things.

- Small companies may not have as much of a brand to protect, so they can try riskier things.

- More features can be put to market test by multiple indipendant companies then by the 'parent' alone. Individual features can be put to market test and good ones have a better chance of being discovered.

- Features can be tried multiple times by multiple companies, with the best one ultimately emerging.

- Startups (using a certain definition) have a 1/x chance of succeeding at launch. Success/failure is binary. The risk of faling completely is extremely high. Therefore, a 10% or 20 or 40% chance that Twitter will disappear while they rely on it to survive is not as scary as it is for an established company. If your chances of success are only 1/5 anyway, going to 1/6 is not too bad. Basically, startups are structured to handle that sort of risk.

These reasons may or may not add up to a net efficiency gain overall, better features or whatever. Redefining what companies do themselves vs what they outsource is an interesting part of how economies evolve. Outsourcing innovation (even if it is just a small feature) might be a good move, sometimes. The market gets to decide.

But twitter itself is a small startup :/

A small startup worth $1 billion. They laughed when Facebook was valued at that too.

Not really.

First, small is relative. If 'company' is 3 guys working on a project for a couple of years, maybe they can be bought out at a price that Twitter can afford.

Second, twitter is a big deal. That means it probably has the potential to be a big company. You may disagree and that is fine. But other people consider Twitter big.

That's the weird part. Twitter is often held up as a darling of startups, but they don't act very startup-like. They move very very slowly and seem very risk averse.

In contrast, Facebook has over 10x the people, and 10x the user base, but does major UI shakeups regularly, tries out new features often, and isn't afraid to tweak or remove them if they don't work out. They also are doing interesting things technically (e.g, Cassandra, Scribe) and open sourcing them, some of which Twitter deploys themselves (e.g., well, Cassandra, Scribe).

Facebook definitely seems to fit the startup ideal much more than Twitter, yet Twitter is much smaller. What gives?

Startups should be very risk averse. One misstep can mean death. Remember, being bold when you recognize a valid opportunity is not the same thing as taking on risk. Risk comes from the unknown. As such, you aren't really rewarded in proportion to the risk you take (the amount of unknown territory you dive into)--you're rewarded in proportion to the market opportunity you nail. Rushing into things headlong is overrated.

In that light, it makes sense to me that Facebook can afford to take more risks that twitter. And Microsoft can afford to take more risks than Facebook, etc.

> Startups should be very risk averse. One misstep can mean death.

That contradicts a lot of sentiment on HN.

> And Microsoft can afford to take more risks than Facebook, etc.

Where is Microsoft making more risks than Facebook? They are quite conservative about the cash cows. Windows has a lot of complexity to maintain backwards compatibility going back decades, and that complexity has a very high cost when it comes to making a stable and secure product.

That contradicts a lot of sentiment on HN.

I define risk as the unknown part of the equation. In that sense, startups (particularly the customer development types) are in the business of flushing out risk through validation before action.

Where is Microsoft making more risks than Facebook?

Zune, Bing, Maps, whatever that table-top display technology is, etc etc. These are all risks insofar as they are outside of MSFT's original core competency, which I understand to be operating systems.

They are quite conservative about the cash cows.

Facebook isn't conservative with their cash cow? Are they revolutionizing online advertising somewhere that I'm not looking? All I can see is targeted banners. Looks very conservative to me.

Twitter is often held up as a darling of startups, but they don't act very startup-like. They move very very slowly and seem very risk averse.

Twitter is extremely startup-like in one critical respect: their attention to how the community is using their product. That's how they became huge. It's the fact that they became huge by focusing on this while others who happened upon the same space did not do this, and thus did not become huge, that wins them respect in the startup realm. Much of what you call their risk-averseness comes from this desire to follow rather than force their users. It's a lesson many of us would do well to learn and, I suspect, one of those things that is far deeper than appears on first sight.

>> "Much of what you call their risk-averseness comes from this desire to follow rather than force their users. It's a lesson many of us would do well to learn and, I suspect, one of those things that is far deeper than appears on first sight."

It'll be interesting to see how well that works when/if they try to monetize those users.

Facebook is in the same space as Twitter, but is bigger than Twitter. Why does Twitter deserve more respect than Facebook?

Twitter is entirely unproven. It's a big mystery what Twitter's actual user engagement numbers are, so nobody really knows how sticky the site is. How do you know Twitter's approach is working? It seems entirely too premature to say.

Honestly to me it seems like either Twitter's user engagement numbers are really bad, which is why Twitter doesn't talk about them, or Twitter's analytics are so poor that they don't know how their users behave, which doesn't really reflect well on them either.

Let me put this differently.

If a company came into being specifically to be Twitter's accountants or lawyers, it wouldn't be that big a deal. You might thinks it is risky or narrow, but you wouldn't be calling it a bubble.

If you really think these are just companies manufactured for sale to Twitter (not self evident, but granted for the sake of argument), you can think of it as just a variation of that.

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