A couple of years ago news sharing site Digg was one of the hot properties of the Internet. On the weekend Digg’s remaining online assets were sold for $500,000. So what happened to a service that promised so much?
The short answer is the business was overtaken by other services like Reddit, Facebook and Twitter. Coupled with that, the founders moved onto other projects. Running a business is tough and it’s understandable that founders would move away from an enterprise that doesn’t seem to have an exit.
In many ways this ties into the presentation by Ian Gardiner, Viocorp’s Co-founder and CEO, at Microsoft’s Bizspark APAC conference about perseverance. Where does a business owner draw a line with their startup baby? Should you pivot into another model or just move on from the idea altogether?
None of this is straightforward and the decisions will be different in every business. A local computer guy is going to have different factors to consider to failing doughnut franchise. Equally a fading media company is going to be very different to those confronting a declining department store – despite what the MBAs and management gurus steeped in the 1980s view that “all business is like soap” ideology.
For some like Ian, ‘pivoting’ to a new business model is the answer. At the Microsoft event last week, Sebastien Eskersley-Maslin of Blue Chilli described a participant of his Club Kid Entrepreneur who decided to sell paper airplanes and was so successful they started running out of paper to make new ones.
Faced with a shortage, the young entrepreneur decided to use the remaining planes as a target game – so rather than selling them, he charged a few cents to throw them at targets.
That’s the classic pivot, which the founders of Digg couldn’t execute with their web service.
All isn’t lost for Kevin Rose and the other founders of Digg though, while the headlines read about the $500,000 sale of the remaining assets they overlook that Digg’s other assets sold for sixteen million.
Choosing to persevere with a struggling business is a matter of faith – faith in yourself, the vision and the product you’re selling. It can be tough to let go of something you have so much faith in.