Strategy Blog: Viget Labs

This week’s New York Times article on Friendster focused on their 2003 decision to turn down a $30 million acquisition offer from Google which, at the moment, appears to have been a very bad idea (had he taken it in stock, founder Jonathan Abrams could be worth $1 billion today).

I thought the more interesting insight was why Friendster saw copycat MySpace rocket past them in popularity.  A combination of executive turnover and a lack of focus contributed; but, ultimately, it was bad technology, according to the article.

Referring to Friendster’s all-star board, Kent Lindstrom, an early employee, said “They were talking about the next thing ... Yet we didn’t solve the first basic problem: our site didn’t work.”

Shocking that the technology failed?  No.  Plenty of start-ups are built on shoddy technology that doesn’t scale.  What’s more shocking is that what was painfully obvious to every user (40-second page downloads?) apparently wasn’t deemed important enough to fix.  Had Friendster anticipated their architecture limitations and worked proactively to address them, they could have avoided the long-standing performance problems that scared off their audience.

My advice?  Build your start-up with growth in mind.  That could mean building a platform that will literally scale, presumably by adding (relatively) low-cost hardware as your traffic increases.  At the very least, it means monitoring your growth and having a re-architecture plan in place when it’s needed.  Having performance issues due to popularity is a good problem to have if you plan for it right and react accordingly when it happens.