It is too easy to assume this didn't work because of these mistakes. I'd guess it didn't work because it's a stupid idea in the first place. So, it's hard to really see if these are "lessons" or just noise.
Facebook and Twitter: both stupid ideas that now have dominant market positions. The iPhone was "too late, too expensive, too lame" to take off when it was first released, at least in the opinion of some professional pundits.
These lessons or observations are all OK, although I'd say that figuring out what people are willing to use or pay for is and always will be a huge unsolved problem. Sometimes you build something for a market that turns out not to be there.
There are two types of technology: ones that everyone wants and no one knows how to do (think SpaceX) and ones that everyone knows how to do but nobody knows anyone wants (think Facebook).
Everything in the social media/mobile space is a lot more like the second kind. There's not rocket science. It's all HTML and CSS and .js and nosql and whatnot. But knowing what people are willing to buy into, out of all the infinite things we could do with those parts, is a mystery.
No, they weren't. They were tasteless ideas. Pundits hate tasteless ideas (because their job is predicated on [being perceived as] having better taste than you), but regular people don't mind them.
Some of the best ideas are tasteless. The entirety of the casual games industry (a $3bn market) is built on tasteless ideas. McDonalds' food is (both literally and figuratively) tasteless. Walmart's curation is tasteless. Summer Hollywood blockbusters are tasteless. Casinos are the most tasteless places on earth.
But none of them are stupid—they all make complete sense, economically. They align with people's incentives; it's clear exactly why they make money, and it would be easy to imagine their business models working out if they were pitched to you.
A stupid idea, on the other hand, is the opposite of something like a McDonalds or a Walmart: something that might be tasteful, might sound great in some abstract/idealistic sense, but is very obviously not aligned with anyone's incentives, and so has no valid route to adoption.
Pets.com was a stupid idea. People didn't want to put in the effort to order household consumables over the internet in 1999. Ordering something over the internet in 1999 entailed an amount of effort about equal to buying it from a mail-order catalogue—and nobody was selling pet food that way, either. The logistics didn't, and couldn't, work out, without a whole lot of supply-chain scale borrowed from other lines of business, ala Amazon. And remember, pet food is perishable.
If the only things you can think to say about an idea are reasons it won't work—and you can't think of even one cynical/self-serving reason people might use it anyway—then it's a stupid idea.
If it would be great, if not for [some huge list of flaws], but there's at least one person out there in the world that none of those flaws will matter to? Then it's not stupid; it's a disruptive idea, and the next version will probably iron a lot of those flaws out and become a pretty great idea.
You're confusing economic viability - which relies on lowest-common-denominator customer pandering - with broader social value.
The idea that price = social value is a very cynical one, and marginalises and discounts minority interests.
One big problem with the argument is that real innovation often comes from people who live in those fringes, and not from those who live in the middle of the bell curve.
So eliminating that "stupidity" will kill off a lot of sources of future investment and innovation.
E.g. what keeps the music or fashion or web technology markets running: those people who recycle the same ideas over and over, or the "stupid" people who invent new ideas that have no obvious economic value - until they do.
A stupid idea is one that serves nobody's needs; it has no monetary value, no social value, no value of any kind. Again, Pets.com: it sounds like something that could work on paper, but there's nobody (in 1999) that would be better-served by doing business with it than by ignoring it and doing what they were already doing.
To make this clearer, some "social good" examples might help:
- Food stamps are a smart idea. People in the targeted group are willing to go through the trouble of getting them, for what they get from them; people who can afford food aren't, so they don't. Since they can't be used to buy much other than food, they also aren't a common target for exploiters trying to make a public-handout money pump. The incentives work out.
- Ambulances (under their current model) are a horrendously stupid idea—they bill people extreme amounts for taking them to a hospital, such that the people most in need (the poorest people usually wait the longest before going to a hospital, and are therefore in the worst/most critical condition) are the ones most strongly disincentivized from taking them. The incentives don't work out at all.
Facebook does not fall into latter. Online social communication was in trend much before/during Facebook's inception and will always do so future. The essential core of internet is communication.
But on a larger point, instead of broadly classifying company failure around the their initial idea, it may be more related to their execution strategy. Which means a combination of idea,team, focus and necessary pivots.
Disclaimer: I bootstapped a competitor to Sonar, Highlight, and Glancee during this time period, but we never made it to Launch (problems with execution). My opinions above are based on all the (exhaustive) customer validation work that was performed.
The customer validation results you got could be explained by a prestige hierarchy in social interactions. In general, addressing people directly and hiding as little of yourself as possible signals higher status, because it implies that you are less ashamed of who you are. Nobody's going to say "Yeah, I'm a hermit who spends all my time trolling people anonymously on Reddit", they'll say "Yes, of course I want higher quality face-to-face interactions." But when it comes to their moment-to-moment decisions, very often they would rather troll people on Reddit.