How Google killed my startup | Hacker News Reader

How Google killed my startup

theglobeandmail.com

53 pointsahmacleod59 comments

It wasn't the Google who killed the startup, it was the OP. YouTube is already a threat to gaming video services, even without a specialized offering. Still, Twitch took off.

If YouTube was going to be YouTube of gaming, then OP could have been Vimeo of gaming. I mean seriously, if Vimeo could be a profitable enterprise with a free, good enough YouTube, then so could them.

I'm not sure about other people, but events like these are usually more telling of myself than the deterrent. Almost every idea would have extreme challenges on the way. If I was the OP I would conclude that Google brought out my own insecurity about the product to surface. Nobody gives up on the castle they want to live in.

EDIT: The irony here is that he seems to have forgotten how YouTube was successful despite Google Video.

Just to clarify: I'm the OP, not the Author.

Yes, by OP I meant the original poster of content. You're a submitter.

So all my comments are directed to the author of that post, obviously. :)

"Along the way, we learned an enormous amount about building a startup, pitching potential investors, and things such as cap tables, term sheets, Series A rounds, company valuation. It felt like a real-world MBA crash course."

You learned everything about building a startup except building a profitable, sustainable business. Everything else is secondary.

I wonder why your comment is being downvoted. This is very true

Because it's not secondary. They are equally important parts of running a business. Just because the business didn't succeed doesn't mean they are unimportant.

TL;DR playing video games is easier than starting a real company so let's do that instead.

His analogy of participating in a "boss fight" is flawed since it sounds more like they just turned off the game system as soon as a hint of the boss monster's first tentacle even appeared on the screen.

Easier said than done with skin in the game. What would be their options facing that "Boss Fight"?

I'd say it's more like they turned off the game after the opening cut scene. This doesn't really qualify as a fumblebrag because they didn't actually start.

They assume that funding was in the bag already, that the product would get built on time (or at all) and that even 1 person would sign up. Maybe they would, maybe they wouldn't.

They were right about one thing though, the timing was fortunate that it was squashed just a little past the idea stage.

Their description of the business model is to be gamefaqs.com, only with videos instead of text. As an avid gamer, that sounds:

- very niche, their intended content would only be a small fraction of what yt gaming will offer (it focuses on live streams)

- very unattractive, since learning how to play the game by exploring it is the fun of it

- very unmonetizable, given that people can get the very same content, for free, in a format that's much easier to digest

I don't think they needed to invoke google to throw in the gauntlet.

Exactly what I thought. Except they mentioned they did make over $1 million.

Not quite:

"Our forecasts had us profitable as of summer, 2016, and closing our second year with nearly $1.2-million in revenue."

Those were forecasts, not actual revenue.

You're right, it does sound like they mean it's a forecast. But predicting that kind of revenue (and so specific) when you don't have any revenue at all sounds a bit odd. What's it based on, if not an actual curve of growing revenue?

> What's it based on, if not an actual curve of growing revenue?

It seems common knowledge enough that budget and revenue forecasts for seed stage start ups aren't going to be precise or very accurate. For investors, that part of a pitch would be meaningless.

"We forecast 1.2 in revenue by our 2nd year."

"How much revenue do you have today?"

If they had prior success, they could raise a round on that, otherwise it would be the standard pitch: size of opportunity, here is what we have so far, here is our team and how great they are.

Like most forecasts, I guess it was based on magic and hand-waving.

> very niche. Yes, but I don't think that means it's doomed. Every site doesn't have to be youtube or twitch.

> very unattractive. Your complaint is extremely subjective and evidently false for tons of people considering the brisk business game guide companies have done for decades and that streamers do on twitch and youtube today.

> very monetizeable. Yes.

> Your complaint is extremely subjective and evidently false for tons of people

Possibly, but please consider this: Game guides and gamefaqs.com contain reference works wherein one can go and look up details when one is stuck. One doesn't usually read the whole thing to learn how to play the game in the most efficient way (unless it's competitive or has complexity on the level of a programming language, like Minecraft).

> streamers do on twitch and youtube today

I'm unaware of twitch streamers or youtubers who primarily teach how to play a game. Can you point out examples of those? I'm really curious.

> One doesn't usually read the whole thing to learn how to play the game in the most efficient way (unless it's competitive or has complexity on the level of a programming language, like Minecraft). I'm not sure about game guides, but:

1) Walkthroughs are absolutely not the only type of guide that GameFAQs houses. It has never been only walkthroughs, even from its very early beginnings. The easiest example of this is Fighting games, which will have in-depth strategy and gameplay guides made specifically for each player.

2) GameFAQs has had a forum for ages, which also has this as the primary topic of discussion. It was in fact the first forum that I ever participated in as a young child, along with some #IRC channels.

> I'm unaware of twitch streamers or youtubers who primarily teach how to play a game. Can you point out examples of those? I'm really curious.

You're being facetious. Do you not know how to Google as well? I'm really serious. :edit:In the offchance you aren't feigning ignorance[0]

[0] https://www.youtube.com/user/OneHiveRaids

> Fighting games

Those are competitive, which i addressed in my post. Note that the original article specifically mentions the Elder Scrolls series as an example.

> GameFAQs has had a forum for ages

In forums you go in and ask your question. Again, it functions like a reference work.

> You're being facetious.

That is a highly uncalled for accusation, and i am serious. (Though it may not have been entirely clear that i was excluding the two categories mentioned in the paragraph before that question.)

> https://www.youtube.com/user/OneHiveRaids

Again, that is about a competitive game.

This took me no more than 20 seconds of Youtube search.

As it stands, the author did not provide a specific Elder Scrolls game, he generically referenced the series, but to take from the most recent RPG, Skyrim, here's the secrets of lockpicking: https://www.youtube.com/watch?v=R5fZobDqQbU

Heres how to make your wife hot: https://www.youtube.com/watch?v=Ozn-byvM8GU

For their newer, online MMORPG game, heres some strategy to increase your income:

https://www.youtube.com/watch?v=KtZpUPGxWzg

Oh, it's specific users you ask? https://www.youtube.com/user/deltiasgaming

IGN Magazine has some good tips as well: https://www.youtube.com/user/IGNentertainment

Full disclosure: I have never played an elder scrolls game in my life. But my friends have. From the front page of my search results alone, I have a good feel of how it works.

I don't mean to offend, but your comment betrays either laziness or profound inability to run a search query.

The middle two links are competitive, but the first two are legit.

I don't want to believe that there actually exists a market for people who'd subscribe to such, but you are right that such content exists, and maybe there is a market.

> I'm unaware of twitch streamers or youtubers who primarily teach how to play a game. Can you point out examples of those? I'm really curious.

Picking three random games off the top of my head

- https://www.youtube.com/playlist?list=PLvEIxIeBRKSjprrvlbAcb...

- https://www.youtube.com/user/foxdropLoL/featured

- https://www.youtube.com/watch?v=Fbmd4eRNwnE

I did not pick any pure let's play-ers, even though those video/streams can be quite informative and serve a basically identical purpose to the Prima guides of yesteryear.

It's not gamefaqs, the business model was to be the Lynda of gaming (says it right in the article!). That is: Pro players teaching beginners who want to learn higher level play, through video and other rich media. There is demand for this in esports style games (LOL DOTA CSGO), but higher level players just start their own channel to do this through youtube/patreon.

GameFAQS.com has been around since the 90s. They housed both user-submitted and commercial guides/tips/cheats/etc, and free.

Now, this guy has a great principle on the tech giants being a threat for a competitive, efficient economy, but I'm just not with him on this one. His only marketable niche would be to get the top paid gaming professionals (like the Dota 2 team that won $6million this month), and provide a market place for the top talent to coach, but he didn't see that, and it's a very small niche to begin with.

I agree. The reason game guides make money at all is because they have shops like Gamestop pushing those guides with every purchase. Not many a gamer is going to pay even $5 for a video guide they have to watch the entirety of if they just want to know how to do X thing when that's freely available in multiple forms elsewhere. For specific things gamefaqs and achievement guide videos are already a well established free "product".

A business is not just "people want X." It has to at least fit the "ENOUGH people want X and are willing to pay for it or are valuable enough as users in order to be sold to advertisers." The morality of that can be debated to death and isn't very interesting, but the reality of it is something we seem to miss a lot.

Their product wasn't really revolutionary - it didn't present anything new. By their own accounts, there was nothing stopping Lynda.com from offering the exact same service (along with a multitude of other online course/video services).

Google didn't kill their startup, their own naivity did.

Seems as though the author got scared and gave up.

And rightly so.

No. It may have been smart to let this idea go, but "Google entered the space" is not generally a good reason to give up.

For niche products, small companies are often in a surprisingly good position to compete with Google (or pretty much any giant company).

Advantages small companies have:

* Much easier to change feature/function/benefit and packaging to adapt to the market

* Not competing with revenue from 1000 other internal projects for staffing

* Similarly: can sustain a business with tiny beachhead markets that Google can't waste time capturing

It seems like people immediately realize that Google can own tiny markets (obviously, if you can own the whole market, you should be able to capture any subset of it), but don't realize that in practice Google won't capture small niches, because it's irrational for them to deploy engineers to earn $10 when those same engineers can be deployed to earn $100 somewhere else.

Also: just because you have all the resources of Google doesn't mean you're going to stick the landing on every project you start. On niche products, it's not only possible but actually kind of likely that you can out-execute Google.

That doesn't make live gaming videos a great new startup idea. Just be careful of the logic that says "Google entered a space and so now it's dead".

I think JoeAltm meant OP was smart to give up an idea he probably wouldn't have been able to follow through on at, the time he did. Or at least that's how I read it.

I read the OP as thinking since Google would give away a good-enough service, it would be very hard to find that niche.

Yes, I did too. And I'm saying: it isn't universally, or even usually, the case that Google giving something away destroys any market for selling something similar.

This.

I was in Microsoft, part of an org which pulled in billions of dollars in double digits annually. When doing planning and visioning exercise, time and again we would never focus on scenarios which seemed to be ‘trivial’ (translating to hundreds of millions dollar revenue oppurtunity), as we had limited headcount and finite amount of time to execute.

Startups don’t realize how constrained are the product teams in big organizations, much more than many startups. Every headcount, every contract worker (if they are allowed at all) need to be fought for. And then there is bureaucracy - post planning and spec’ing it is impossible to do any sort of minor pivot, once the juggernaut starts rolling there is no stopping, no room for even a pause to evaluate a new threat.

I’m not an expert of gaming by any stretch and I’m sure the founders decided on best course of actions based upon their priorities but looking at the YouTube Gaming page (http://youtube-global.blogspot.in/2015/06/a-youtube-built-fo...), YouTube seem to be aiming for something which is natural extension of what was already happening in YouTube: “More than 25,000 games will each have their own page, a single place for all the best videos and live streams about that title. You’ll also find channels from a wide array of game publishers and YouTube creators.”

I thought the founders were right when they said YouTube Gaming launch is a validation. I’m sure in the initial days YouTube Gaming org would be taking small steps and would try to consolidate what is already happening in YouTube but perhaps in a disjointed fashion. Go for easy discoverability etc.

In this situation I would assume that there would be plenty of scenarios left uncovered which an innovative startup can solve for (which initially YouTube Gaming would be incapable of paying attention to due to resource constraints - people, time - however compelling they may be).

And hey, one could always build something with acquisition in mind - an acquisition by Google (YouTube gaming) wouldn’t have been a bad way to get validated in the end.

Exactly. The platform will matter, but in this case the content is going to be king. Users are going to wherever the best content is. I saw the OP as being in a position to be able to complete with Google to provide quality content. That's not a bad position to be in. And that long tail can be really long with a lot of content that Google and others won't deal with.

I have heard several times how actually having some competition helps companies quite often. It's not automatically the end if someone else has a similar offering.

This reminds me of the story of Blizzard seeing Dominion Storm at E3 in 1996. After seeing the demo, they felt like they should kill Starcraft because of how much "better" Ion Storm's demo was than their own.

Turns out is was mostly smoke and mirrors, and Blizzard made an exceptional game because of it.

http://www.codeofhonor.com/blog/starcraft-orcs-in-space-go-d...

>After all, one solid axiom of business: It’s hard for your better, paid service to compete against a “good-enough” free offering.

Hopefully for the sake of FastMail, Rackspace, et al, Google never tries their hand at email...

Dropbox could have made the same conclusion with Google Drive and decided to quit, instead they marched on.. to an 11 figure valuation

Had they followed the Lydia.com approach more closely, they could've competed and done quite well.

If I want to learn how to program, there are a TONS and I mean TONS of free resources everywhere on the internet - very similar to all of the game faqs people keep referencing. And yet, Lydia still makes a ton of money because their service is sold as a subscription based service which is much better than other resources on the internet.

If you do a good job of marketing this and sell it as a premium service, I'm sure they would've done just fine. Also, if they do make a dent in Google's service, you can bet their ass, they'd be calling about acquiring them in short order, which would have made a nice payday for them

Instead, they bailed at the first opportunity. To me, it doesn't sound like their hearts were really in it.

Your biggest problem is you tried to create a product out of thin air.

You want to monetize video content? Guess what the best platform to do that is? YouTube.

I don't know why you would even consider building your own competing platform when YouTube is right there waiting and offers everything you need. There are countless examples of strong businesses that have grown out of publishing YouTube video content.

If you really believe there is a niche for the content, then this development hasn't changed that at all. If anything it just pivots you away from the silly idea of building a platform, toward the real value of the offering.

I realize it's not as 'sexy' just to publish YouTube videos, but it's a far more sensible approach.

although it might be heart sinking i don't think google really killed it in this case. The company gave up at the threat of competing with google. Killing something is more like what twitter did to meerkat to push periscope. My personal opinion only.

How does an article simultaneously get upvoted to the front page, but universally destroyed in the comments?

My guess is that people vote based on titles, and comment based on content.

I find the negativity weird, given that most of us here are (supposedly) building things. I think his idea has merit, and is different enough from Youtube Gaming that it can probably survive alongside. I think he perhaps just made a few mistakes -- the biggest one trying to get funding before testing the business model. (Although in his defence, that seems to be happening a lot these days).

Anyway, rather than just whining uselessly here I'm going to actually find his contact info and give him some suggestions.

The article is interesting and relevant, even if its premise is flawed. It certainly merits discussion, critical as it may be.

Isn't part of writing a business plan doing the scenarios of what happens should company X or any other competition enter the space and pitching what would be your competitive advantage. Who plans a non-technical business on the basis of 'no one else will have this idea'. It sounds to me like the OP had a poor business plan to begin with. The fact that there were people willing to fund this just shows that in this bubble will throw money at anything.

tldr; People came up with an idea of some kind of paying twitch and decided to give up when Google might release something similar for free.

I think calling out that they specifically wanted to teach people to play video games matters in the tldr.

Honestly, this sounds just like a feature that this company may have made interesting with G will just kill off in a few years.

Reminds me of MS product announcements in the bad old days.

So what is this about? The horror of competing with a bigger company? Google didn't kill your startup, You did. You did that after You got scared and didn't have nothing interesting/unique to compete with them. Stop crying, most people are in debt to the rest of their lives after their companies fail.

Did they even have some of their product built? It sounds like they didn't, but then I haven't had a coffee yet.

There is so much I don't like about this article I honestly don't even know where to begin.

I think the article is more about free PR than anything else. Pretty awesome IMO to get a write up in the Globe and Mail.

This. The Author pulled a serious coup here, translating an aborted business into a personal profile piece in a national paper.

I'm not sure it's even aborted, possibly just on pause.

I think the comments on here would be a more valuable "MBA crash course" for Mr. Maffin.

Ah, yes, the "our safety margin wasn't as secure as we thought it was" situation.

1.5 million is revenue and they decided to just end it?? :(

Title is from the article; I am not the author.

> Our hearts sunk. They were pretty much already working on what we had been planning – and they are going to give it away for free.

Selling below cost price is considered anti-competitive, and is illegal in many countries.

Which countries prohibit free websites? Do they block Facebook and GMail?

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