I had a good afternoon/early evening. An old friend was in town, which caused a lot of old friends to get together for a bit.
I left early – my daughter was home alone and the place we met was so loud I thought my head would implode. Even when I was young I preferred places with subtle background music to bars that blare music loud enough to perforate eardrums.
I was watching Ocean’s 13 and dozing off when the phone rang.
On the other end of the line were two (or three, I couldn’t tell) people all talking at once, and all talking in acronyms. It took a few moments to shake off the sleep and get them to talk one at a time.
It turns out they have a pretty good idea for a web service – one they could make money from. Through micro-subscriptions (a dollar or so a month).
But they thought their money was in advertising. Often that is true. But their web service was not designed to keep anyone on their site for very long. I thought the chances of them getting click-through on ads was very small.
I could tell that one of the gentlemen was getting very defensive because I was questioning him. I knew right then I wouldn’t work with these people. I won’t work with people that are afraid of having to defend their idea. If you can’t defend it, even under the harshest of critics, then you either don’t have a great product, or you don’t believe you have a great product.
As they were explaining to me how many page views they would get a month, and comparing it to sites like Engadget and Orkut (sites people spend a LOT of time on) to make their advertising argument I tried to explain to them why their site was so different. They designed a site that would keep people on the site for as little time as possible – seconds, often. It’s hard to explain without breaking a confidentiality, so I won’t try. But the chances they would create a sustainable company off of advertising was just non-existent.
But they could probably make US $120K a month in a subscription model. I told them that.
"That’s only a million dollar company!", one of them said. Only a million dollar company. Two or three guys can live very, very well off of a million dollar company!
In the Internet space, the measure of success is extremely distorted.
As I was explaining why I wasn’t interested in working with them one of them suddenly screamed, "You are missing the chance of a lifetime!".
Sorry. The "chance of a lifetime" must include working with people that inspire you – and respect you, and are people you can inspire, and respect.
And if they are reading this now, keep working on the idea. Build it. Put ads on it. But also offer a subscription. Just try it. And I’m sorry if you thought I was an ass. But if you thought I was an ass you wouldn’t last two minutes in a conversation with a VC.
And before you meet that VC – make sure you figure out which one of you is supposed to talk. It can’t be all of you.