From time immemorial, one of the most sacred shibboleths of Silicon Valley has been that to launch a startup, you need to be a product, not a feature.
Generations of VCs and entrepreneurs has agreed on this point. But I’m wondering if today’s Web 2.0 world has fundamentally changed the equation.
Let’s start with why you need to be product, as opposed to a feature. When it cost $3 million to develop and launch a product, simply adding a cool feature could never generate enough revenue to justify the investment. Moreover, the proverbial danger was that if all you had was a feature, the product manufacturer would eventually develop its own version and turf out out of the market.
Today, two important things have changed: One, it costs a hell of a lot less to build products or features. And two, in the loosely coupled world of the Web, it’s unclear that product makers have much of an advantage when it comes to turfing out incumbent features.
When you can build a cool new widget in your spare time, let the blogosphere do your evangelism for you, and then sell for a couple of million, suddenly being a feature doesn’t seem so bad.
I don’t know how much it cost to develop and operate AddThis, but I suspect it’s less than the cost of a Prius if you don’t count labor. Sure, this is a feature that someone like 6Apart or WordPress or Google should be able to add practically overnight. But once it’s in, why would a blogger switch? As a result, I’m just waiting for the inevitable buyout news to appear in TechCrunch or VentureBeat.