Let's apply this to Diaspora. What if they end up with something that has an active, satisfied user base, which is also small. (Just for the sake of easy calculation, let's say it's 170,000 actual, active users.) Would Diaspora be a success?
What if it ended up that Diaspora managed to gain enough users and convert enough of Facebook's user base to gain about 17.5% market share? (Measured in time online, on-site. Probably hard to measure, but this is a hypothetical.) Would they be a success? What percentage would represent the threshold?
Based on that, I would say success is 1) different things to different people, and 2) the fulfillment of each person's goals.
I think the two parts conflict.