An interesting point raised in the comments there is that it's hard to peg the actual value of a product that's coming at a problem in a totally new way. Skype is by far the leader in its approach, and if in the future the entire world moves away from landline phone they'll be well positioned to maybe even kill Ma Bell II with their really robust VOIP technology. Plus, with $90m in annual revenue, they're making a ton more than the nearest company with a web 2.0 logo (unless you count guaranteed payoffs from the likes of Microsoft and Google).
> 1. Just because a company has a huge and growing audience doesn't mean it can find a huge revenue source
How does this fit in with "make something people want". I don't think it invalidates it, maybe it just means "make it, then sell it in the hopes that someone else can find a way to make money from it"?
Well, make something people want first and find a revenue source later works just fine. It's not that Skype didn't find a way to make money and became a failure despite of it's uesr base. The problem is simply that Ebay paid way more than Skype was worth. $90 million in annual revenues is a decent amount of money and at a lower price it would have been a good investment.
The problem is simply that Ebay paid way more than Skype was worth. $90 million in annual revenues is a decent amount of money.
Right, Skype would have been a great deal at a lower price.
But it's a case study that might give future acquirers of other startups pause, as the last paragraph suggests:
"Here's a suggestion to every Internet executive: take a Post-It note, write 'EBay wasted $3 billion on Skype' and stick it to your monitor. Stare at it the next time some hot social whatever-2.0 company comes by and talks about growing fast and finding a revenue model later."
Hmmm, the "lessons learned" are far from obvious for me. What were the performance criteria for Skype? Were they realistic, were they meant to be realistic? Without the details it just looks like accounting trickery.
