A $1.6 billion lost oppurtunity?
Youtube got bought over by Google for a whopping $1.6 Billion (no links here - its all over the place!). Going by how popular the site has become, it was only a matter of time before one of the big guys bought it out. Congrats to them! Our company, Tekriti, started off building one of the earliest video sharing sites back in Feb-March 2005 for our first client. Ourmedia.org was launched in March 2005. YouTube came along almost 9 months later. Ourmedia had a host of video and media experts on its panel of advisors and it had (and has) a team of volunteer editors to wean out copyright content. YouTube on the other hand has the policy of letting copyright content remain online until the copyright owner objects. Ourmedia allows users to download the original high quality video while YouTube only allows online viewing of very low res. flash versions. So for a site that started with a 9 month lead, it feels like Ourmedia was a missed oppurtunity. Of course, to be clear, Ourmedia is a non-profit and making billions of dollars wasnt even the aim and it still gets significant traffic and has over 100,000 videos hosted. But the kind of popularity that Ourmedia should have seen never came along. At a personal level, it helped us get our company started and gave us the initial credibility any startup needs. So Ourmedia remains very special to me.
Looking back, I think there are some very useful lessons to be learnt:
1. Keep it simple and stupid. A lot of time was spent on defining what metadata should be captured while uploading a video. The result was this huge page (login required) with hundreds of form fields to be filled in. Even though most of those fields were optional, it was daunting for the average user to figure out this form. A simple minimalistic user interface helps!
2. Reliability is the key. Ourmedia uses the Internet Archive for storing media. This is great because it provides for free storage. But there were major problems with getting this integration to work. Essentially the video was first uploaded to Ourmedia and then copied over to the Archive using FTP. This was slow and often the servers would simply not respond. I think this is the killer feature of YouTube. It just works!
3. Focus! In my opinion, Ourmedia tried to be too many things at the same time. The site supported audio, image and text uploads along with videos. It supported forums, groups, user profiles and social networking as well. All in the alpha version. In hindsight (which, of course is 20/20), it would have been much more prudent to have done just one core feature (video upload and view) and make it work 100% of the times. Feature bloat is also a side effect of using a prebuilt platform (Drupal in the case of Ourmedia) since you seem to get so many features for "free" so you might as well add them to your site. In reality, adding a feature to an application should be driven by user demand and not by how easy it is to implement.
4. Virality. YouTube allowed embedding videos published there on other websites and blogs. This contributed in a big way to the exponential growth of YouTube. Same can be said for Flickr as well. Ourmedia did not have that viral effect because the user had to come to the website to view a video.
To be fair to Ourmedia, it came into existence in the very early phases of the "web 2.0" phenomenon. So a lot of things that seem obvious now were very new or unheard of back then. Besides, Ourmedia does have the cleanest terms of use - you own everything that you publish on the site. Very few (if any) other video sharing sites offer such generous terms of use. Ourmedia was also not backed by funding so it was challenging to develop, maintain and upgrade the website on a shoestring budget.
Based on our experiences in doing Video portals, we developed a platform for easily creating video sharing websites - its called TekMedia. You can read more about it here.
Comments
Interesting!
Technically youtube founder also booked domain in Feb-2005 and launched site after 10 month and same time got first round funding from SC (Sequoia Capital).
SC is big winner in youtube-google deal as they got almost $500 M for their investment of $11 M in less than a year. I think this might be shortest and highly profitable exit for any VC firm.
About ourmedia and youtube comparison and your assessment, I am agrees with all f them and specially first one ‘keep it simple and stupid’.
Posted by: Piyush Patel | October 11, 2006 10:16 PM
Moral of the story is that you need to do gimmicks like allowing copyright contents to get famous :-). The traffic you gain by such decisions put you to leverage 1.65 Billion dollars.
You may not have gained 1.65 B but you could have the satisfaction of being the first in the field.
Posted by: Krish | October 11, 2006 11:47 PM
Gaurav:
You may not have made $1.6 billion - at least not yet - but you have shown how smart you are by doing a fairly intelligent postmortem of ourmedia. Ultimately, smart thinkers get their due in business. It is very seldom on the scale of $1.6 billion, but it is always much, much more than what the average grunts in business ever achieve.
Posted by: Sarat | October 12, 2006 03:24 AM
Gaurav:
A non-business question! I will be in Gurgaon with my family over the Christmas/New Year's. We were planning to do something interesting on New Year's Day. When I was growing up in India, NYDAY was a day for a big picnic. We used to go to the banks of the Ganges and cook. Do Delhiites do that, and where? We will do the NYEVE thing, too.
Your insider's scoop will be appreciated. And of course I will look you up.
Posted by: Sarat | October 12, 2006 03:28 AM
dude, you will make your billion too.. amen. I agree with you-- keep it simple and stupid.
Posted by: Sorav Bansal | October 12, 2006 10:10 AM
Your post mortem of the whole thing is very good .The satisfaction of being the first To think and execute a concept will always be with you .
Posted by: joy | October 12, 2006 12:03 PM
Piyush - I agree that SC hit a home run with YouTube. I heard they made over $400 million on an investment of $11 million in less than a year!
Krish, actually you are right about copyright content. In early days of Ourmedia, our poor little server used to get totally swamped every time somebody posted any copyright content (a lindsay lohan pic for example). A lot of hits used to come from Google Image search!
Sorav, tere mu mein ghee shakkar :-D
Joy - yes there is satisfaction of having being ahead of the curve!
Sarat, I am afraid that new year's eve celebrations in Delhi today are not very different from how it is celebrated in the US. But of course December is a good time for picnics and there are nice places around Gurgaon for doing the same (banks of Yamuna are out of question!).I am really looking forward to meeting you. Your comments are always insightful and I can use some tips on marketing from you!
Posted by: Gaurav | October 13, 2006 12:27 AM
The New York times has a great article here
on how YouTube came about. I think along with "simple and stupid" the other must have is a non corporate approach to building social networking website. You can't decide to build a viral social networking website, a lot of times it just happens. For ex: Facebook was built when the founder thought it would be cool to have a school directory that was informal and community oriented. Other college students wanted in on it and it grew from there. The key takeaway from the YouTube deal is that eyeballs still matter.
Posted by: Sunder Iyer | October 13, 2006 05:23 AM
Nice analysis!
and isn't it "Keep it Simple, Stupid"? the "and" seems to imply dumb users... as against reminding yourself to avoid complexity in design.. ;-)
Posted by: sb | October 13, 2006 09:26 AM
Hi Gaurav,
The role of viral marketing is a case in point esp for the user generated content space. Why You Tube allowed © contents ? Just for exponential leverage I suppose. Sometime back in a conference a key note speaker put a question. Is there a chance for a "You Tube" kinda thing to originate from India and became World famous. And will it get funding if for the SAME concept a pitch is made from India? His answer was No.
Still some pre-conceived "notion" persists with VCs. Even in your case if you have got the funding -It's now OurMedia not You Tube. So to the question on losing $1.65 revolves around funding. And hope all this will change and we would be building many more 1.65 Bs.
Posted by: Karthikeyan | October 13, 2006 05:40 PM
Don't be disheartened. The same VCs buddy group who funded Google, funded YouTube. Obviously, it was easier to arrange the buyout meeting.
-Amit
http://www.ipatrons.com
Posted by: Amit | October 14, 2006 02:16 AM
Dear Gaurav, This is great analysis of the business and the buyout compared to a close competitor! My thoughts are - I cannot see how long you can stay away from Indian and Global Internet products :-). Your definitely going to make that billion! The analysis is very useful for my own work.
Hope your enjoying a cracker of a match (to quote Sidhu) this Sunday.
- Santosh
Posted by: Santosh | October 15, 2006 03:55 PM
analyzed it pretty well. Virality is the key in any .com.
Posted by: chakpak - bollywood movies | October 16, 2006 02:21 AM
True. "Virality is the key in any dot com." But the funny thing is that most successful dot coms did not sit down and plan to be viral.
Posted by: Sarat | October 16, 2006 04:40 AM
Sunder, Sarat, Karthikeyan, chakpak - I completely agree that virality is key and it is almost impossible to plan for it. There are some pre-conceive notions about India amongst VCs but I would not say that lack of funding was the only big issue that Ourmedia faced.
Thanks Santosh!
Amit - that is a good point!
sb - I meant "simple AND stupid". The Ourmedia interface was actually very intelligent in capturing very detailed metadata. But sometimes the user interface gets just too intelligent for its own good :) So keeping it stupid definitely helps!
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Posted by: Pranav | December 26, 2006 05:26 PM