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Me Too Usually Mean Peugh
By Mark Evans | September 22, 2007
BlogTV.ca led a short and completely unspectacular life.
But it’s not like anyone should be surprised. As the 642th video-filing sharing service to be launched, BlogTV.ca hinged its prospects on a very thin threat: it was going to Canada’s YouTube - not withstanding the fact few people on the Web consider a company’s nationality to matter.
BlogTV.ca failed because it was just another video-sharing service in a market awash in YouTube wannabes. BlogTV.ca learned the hard way that jumping on the bandwagon as a “me too” service was a recipe for disaster. Unless you come out with something different or unique than what’s currently popular, it’s really not even worth trying.
Yet everyone thinks they can invent a better mousetrap. If you look at the video-sharing market, for example, there are still plenty of companies attracting venture capital. In the last couple of months, Dailymotion has raised $34-million, kewego (who?) $6.9-million, Metacafe $30-million and Veoh $26-million. I’m sure the VCs backing these companies believe they have great prospects given the video market’s growth but some of these bets aren’t going to pay off.
Even more troubling is there continues to be too many ill-conceived “me too” investments in many markets such as photo-sharing, storage, social media and social bookmarking where the market is already crowded and growth is now far from spectacular. Sure, entrepreneurs and investors are eternal optimists but just because it’s now easy to launch an online start-up in a hot or warm market doesn’t mean it has to be funded. Unfortunately, this hasn’t stopped the bandwagon investment philosophy that seems to be alive and well.
Maybe that’s the where the bubble that concerns everyone is happening. Rather than seeing high-profile companies blow up like the dot-com book, most of the failures will likely happen to late-to-the-game start-ups that managed to raise some venture capital at the slim hope they could win the lottery and become the next YouTube. So rather than blaring headlines about the shocking demise of a much-hyped start-up, the bubble will quietly burst in the hinterlands where it will receive, at best, modest, attention.
Before ending this mini-rant, I would remiss if I didn’t add that there will always be exceptions to the rule. Sometimes, the right company with just the right strategy and good timing will be successful. Canada’s video.ca, for example, is apparently alive and well.
Topics: Venture Capital |