Earlier this week, I was at Trinity, looking at a startup company. In that meeting, three companies that came up were: Friendster, Facebook, and MySpace.
All these companies have had rampant growth in membership. Facebook and MySpace are even delivering revenues, and have been able to monetize the audience. Friendster, on the other hand, became a fad for a while, and then all its monetizable audience gradually disappeared, while they were left with a resource-draining, non-monetizable audience of loads of Filipinos.
Well, no one wants to spend a lot of AD $$$ on this segment!
People have had experience, they have, hopefully, learnt a thing or two. And no matter what, it is unlikely that non-revenue-generating businesses will get huge valuations a la Dotcom (Skype being an exception).
If management teams are doing their due diligence, they ought to be focusing their customer acquisition on monetizable geographies, which effectively means the US, Canada, UK, and a handful of other countries.
Brazil is out.
How do you keep Brazil out, though?
This segment is a part in the series : Web 2.0