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Comment by sramsay | Hacker News Reader

I more often experience the facepalm of watching an uncomplicated idea turn into a global sensation.

It's 2005 (hardly the distant technological past), and someone gets the idea for a site where you can store and watch videos. This is not some kind of radical technological innovation. This is not something beyond the ambit of current capabilities. This is not some brazen insight into the future. This is a site. Where you store videos. And watch them.

This, of course, is YouTube -- a site that was eventually sold to Google for $1.6 billion dollars.

facepalm

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Well, to be sure the magic ingredient in Youtube's success was not the idea of uploading and watching videos. Many people were working on video sharing at that time (myself included). Youtube's secret was that the founders were already successful entrepreneurs who were well connected to VC's. Thus they had access to the capital that allowed them to lose ungodly amounts of money in the quest for growth.

Well, they also had an impressively cavalier attitude to copyright. Which was a major advantage.

But they also had excellent design sense. YouTube made uploading, viewing, and sharing content very, very easy. I did some consulting for a semi-competitor, so I paid a lot of attention to the market then. YouTube did a great job, which helped them get users, which surely didn't hurt with VCs.

Also, Crunchbase says they took $3.5m from Sequoia to start, and then $8m a few months later, and my recollection was that later tranche was really just to spend on bandwidth and servers. Google bought them a few months later. So they didn't lose what I'd call ungodly amounts of VC money; that's less than 1% of what Facebook received before IPOing.

Yes, I should have mentioned the copyright issue. The Napster lawsuits were still fresh in people's memory, and I'm sure a lot of entrepreneurs and and VC's were frightened of starting a video sharing site that was so openly being used to share copyrighted clips.

Youtube was acquired very quickly (within a year of public launch), so total losses were of course much lower than Facebook. But due to the bandwidth costs, YouTube had to burn a half-million+ a month very quickly after launch. Not many entrepreneurs are connected enough to get that kind of cash so quickly. Facebook could grow the site while spending only in the low five digits, without needing to quickly raise a large venture round.

Also, their exit and sale to google was perfectly timed. As copyright started to loom on their future, they got bought by deep pockets.

Man, that sucks. Win a game like that, and you never have to have another idea as long as you live.

I worked for a time at a startup whose claim to fame was "We almost got bought by Google before they chose YouTube"

YouTube wasn't alone. They just won the lottery and nobody remembers all the others who disappeared.

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