Here’s an idea. (1) Spend $7.5 million on the business.com domain name. (2)
?. (3) Profit!
The crazy thing is, it seems to have worked. The bright people who bought business.com
for $7.5 million in 1999 are now selling it for upwards of $300
million. What’s more, they barely did anything beyond buying the domain
name: they just sat back and watched the dollars roll in.
What’s the moral of this story? Let’s just say that when mortal
enemies Nick Denton and Marc Andreessen agree,
then you can pretty much be sure they’re on to something.
Denton, on Friday:
The Business.com site is little more than a rebadged version of Google Adwords,
serving the search engine’s text ads in both the main column of search results,
and the sidebar, alongside a few perfunctory business listings. Business.com
pages are so useless that the site is its pages don’t appear in the Google
index, but the search engine’s text ads still fund the company. The company’s
pitchmen claim earnings will hit $15m this year, making the $300m pricetag
quite reasonable, at least by the degraded standards of this internet boom.
So, what’s the moral of the story? It certainly helps to have a domain that
web newbies are likely to type into a browser address bar. And those are the
internet users most likely to click on text ads. But here’s the bigger lesson:
search is such a lucrative business that fortunes can be made by even the
most cynical of operators, with the thinnest of products, and the tiniest
slice of the market.
In a great market — a market with lots of potential customers and/or a highly
growing set of potential customers — the market pulls product out
of the startup. The market needs to be fulfilled and the market will
be fulfilled, by the first viable product that comes along. The product doesn’t
need to be great; it just has to basically work. The market doesn’t care how
good the team is, as long as the team can produce that viable product. In
short, customers are knocking down your door to get the product; the main
goal is to actually answer the phone and respond to all the emails from people
who want to buy. This is the story of search keyword advertising, and Internet
auctions, and TCP/IP routers…
Monster market, weak product, terrible team — startup will probably
be a huge success, as long as the team can do the basics of getting the weak
product out and fulfilling the customer orders. The market pulls the product
and the team.