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Too Small to Succeed

by @ 6:06 pm
Filed under: business,internet,web

I used to think that the Internet was the great equalizer in the business world. A small guy with programming skills and a big drive sets up a new site and offers a novel service. The service goes viral and the small guy becomes a small company and builds and expands his way to success. The small guy pulls off an IPO or gets acquired and retires to the tropics. It's a happy ending that some have indeed experienced.

But what I have learned is that without some early connections and some cash infusion the small guy can quickly and quietly wither away, no matter how much effort he puts into his novel idea and no matter how many users he attracts. He's destined for a quick failure unless he gets some serious support behind him and fast.

How do I know this? Having operated this very site for some 12 years has given me plenty of lessons to that end. I operate this site as a hobby from the corner of my condo and while the free utilities offered here have a decent number of users, which I assume find them useful, and while I never looked to this site as a means of financial success, this site is in fact too small to succeed. Take these cases:

  • For a number of years this site was hosted on various web hosting services such as 1&1 and every few months there was a warning to kick me off the service because the site was exceeding usage quotas. So, like a gypsy, I kept moving the site from one hosting company to another. A financially secure company would have had no issues paying for more resources.
  • A couple of years ago Amazon Associates (an Affiliate Network) I was using for this site accused me of cheating and shut down my account, depriving the site from a small stream of revenue. According to Amazon, I had published URL's with my associate account to other sites, violating their terms of service. URL's had in fact been copied to other sites but not by me. Page-scraping and content-stealing robots had done that. A large site most likely would have never been suspended. In my case my appeals of innocence fell on deaf ears in Amazon.
  • A few years ago I operated a URL shortening service much like tinyurl and bitly. One day a spammer used the links in a widespread spamming operation and suddenly the domain registrar, GoDaddy, cut off the domain registration claiming that is was spamvertized. It took over two months to convince GoDaddy of my innocence and get the domain back. I shut off the service promptly. This would have never happen to bit.ly or goo.gl.
  • Recently a service on this site fell victim to a Nigerian phishing operation to collect bank information from unsuspecting victims. For days my ISP hounded me about this, nearly cutting off my services. That would have never happened to a customer with deep pockets, but I ended up discontinuing the service to guard against possible service termination or potential legal consequences.
  • The latest headache came in the form of a DDoS, paralyzing this site. An outside site using one of the widget services from this site came under attack and the attack spilled over to this site causing capacity issues. I had to resort to all sorts of traffic blocking filters to partially mitigate the effects. This would have been a non-event for a larger site, but for this site it meant lengthy periods of slow performance and outages.

The Internet, a great equalizer? Hardly, great ideas can only go so far and without serious financial backing, they are destined for failure and eventual oblivion. I can't imagine how many great innovations have died premature deaths without that all important cash infusion.

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