“Build it and they will come is not a strategy, it’s a prayer”. This is a quote from Steve Blank’s book which I’m reading these days. If you’re smiling then you get it, I almost busted laughing the first time I read it. I think it is inevitable for every entrepreneur at one point or another during his career to believe with all his heart that If you’ll build it, they will come (and then someone will give you a gazillion dollars to take it off your hands). Sadly for some, they never recuperate from this trauma, others blame everyone and everything for their misfortune. I always felt that if I’ll build it they will come, but then reality kicked in (more like kicked my b*@), reminding me that dreaming is not a strategy either.

It was in the happy .com years when I first encountered the bug of if you’ll build it… I was living at the time in New York and I think everyone had it (or so it seemed). everyone was trying to find a business model from a menu of 2:

  1. sell something in e-commerce style – i.e. dog food, plants, furnitures, groceries etc. just make sure you do it through a cool website.
  2. Get eyeballs, millions of eyeballs and sell banner advertisements to others.

We selected option 2 and we started our web community named: Zoomgo! (*courtesy of archive.org)

We created a virtual world using Adobe flash where someone could simply – stake their claim, and get a piece of our virtual land. In this piece of land the user could build a homepage, invite all his friends to build around him and hang out (we actually invented facebook…). We had chats, forums even games – everything was ready for the people to come. and they came.

Was it the greatest idea? nop.
Did we do something innovative? nop, we considered our competitors to be geocities, fortunecity, theglobe and many other web communities, so we came in almost dead last into the online community race. (if you are wondering what happen to all these sites see my future post – where are they today… in short all gone)
So we built it and they came, good for us! right?

Well, it’s not quite simple… you see, we paid for each user that came in via pay per click program (goto.com which changed its name to overture who got sold to yahoo). we thought that if each user that came in, will love our concept so much and will bring 10 of his friends (even 5 would do) then we would be able to sell advertising and make back what we paid for that initial user. It took me a while to understand why this is not a sound business plan/strategy.

For every successful site that lives off advertising dollars you have hundreds that struggle. In order to achieve success in the advertising game, you will need to have liquidity (millions of impressions) as well as returning users that fuel that liquidity.

When you are spending so much advertising dollars to get people into your site, and trying to sell the eyeballs back to others (to generate some ad revenue) -it’s called Arbitrage, and arbitrage is a very risky strategy if you don’t know exactly what you’re doing. We had no clue and no real plan, we thought that if the site would be good, people would come back and the advertisers will be flocking in to buy banner space on our site. we were wrong – and half a million dollars later, we were dead.

My final thought: I’m not a religious person, but they say that praying makes you stronger and builds up your faith – so it’s okay I guess to think that… Build it and they will come – just make sure you have a strategy in your back pocket.