Wallflower at the Web Party details the rise and fall of Friendster. Though there’s a lot of finger pointing in the story, there’s also a lot to learn from the site’s bust. Some excerpts:
Founder Jonathan Abrams vows to never again accept a dime in venture capital.
Mr. Abrams believed that he had developed a sound business plan for building Friendster into an Internet powerhouse — and that the plan foundered when his well-known investors shoved him aside and proceeded to mess everything up…’Jonathan had all these high-powered investors to please. He had all this money in the bank, so there was all this pressure to hire people and get things done. Open up new territories: China, Japan, Germany. Add all these new features. Meantime, he took his eye off the ball.’
The company spent too much time worrying about new features instead of the poor performance of its existing site:
As Friendster became more popular, its overwhelmed Web site became slower. Things would become so bad that a Friendster Web page took as long as 40 seconds to download…[Yet] technical difficulties proved too pedestrian for a board of this pedigree. The performance problems would come up, but the board devoted most of its time to talking about potential competitors and new features, such as the possibility of adding Internet phone services, or so-called voice over Internet protocol, or VoIP, to the site.
And they made the mistake of trying to solve exciting potential problems instead of real mundane ones.
In retrospect, Mr. Lindstrom said, the company needed to devote all of its resources to fixing its technological problems. But such are the appetites of companies fixated on growing into multibillion-dollar behemoths. They seek to run even before they can walk. “Friendster was so focused on becoming the next Google,” Professor Piskorski said, “that they weren’t focused on fixing the more mundane problems standing in the way of them becoming the next Google.”