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September 8, 2008

Why The Techcrunch50 Will Fail

Filed under: Main — Ryan Jones @ 2:00 pm

I’m in a very cynical and nasty mood today – perhaps related to the DDOS attack that’s happening against one of my websites right now. I think I’ve got it handled though (if you target me at the domain level, i’m just going to re-route all that traffic back to you :))

anyway… I’ve been looking at the TechCruch50 and it seems that most of the companies fail from the same thing most startups fail from: they don’t solve a problem and they have no path to revenue.

let’s take a few examples:

blah girls sounds like nothing more than a comic or a cartoon. How is this new? This is nothing special.

Tweegee is aimed at “tweens” which tells me 2 things: actual tweens will want nothing to do with it, and they won’t get more than $0.25 CPM for any ads on it. Tweens don’t have money, and as MySpace has proven, they don’t click ads or buy stuff from them. They also don’t want to be tweens, they want to do what the older kids are doing. All this will do is drive more people toward MySpace and Facebook.

Banking for kids? You’re kidding me right? Kids don’t have jobs or money. My middle school tried this once, and it failed miserably – despite them even giving us $5 and a free pencil for opening an account.

hangout should go hang out with Tweegee (and maybe even Shyrk too) so they can all fail miserably together. Of course I haven’t seen it yet, but it looks like a SecondLife ripoff. They’re claiming without privacy fears and what not, but come on can you really tie into social sites and eliminate privacy concerns? That’s a bigger oxymoron than “Microsoft Works” or “Airline Food.”

I’m not really sure what LiveHit does, but they use cool words like “velocity-based tracking and dynamic-predictive modeling.” It’d be nice if they told us what they actually do, but I know how some VCs have a tendency to favor fancy words and powerpoint presentations over actual business models – so hey, take your money now while you can.

Quant the News is another one of those companies that “was formed to develop and deploy advanced textual sentiment analysis applications that leverage its unique, AI-based natural language processing and data mining technology.” Again, some great fancy words that don’t tell me a damn thing about what you do.

Seriously, every time Techcrunch50 and Demo roll around I feel like starting a bunch of companies based around a nonsensical domain name and a few social APIs and seeing how much money I can get. can you buy Clomiphene over the counter in ireland Somebody else’s API + Adsense is NOT a business model. When are we going to see something that actually does something useful.

Here’s the questions I’d like to see them all answer:

1.) What unique unsolved problem are you solving?
2.) What’s your path to revenue (and you can’t say adsense.)

If you’re thinking of investing in some of these companies I have a better offer for you. Give me the money, and in 12 months I’ll give you back 1/2 of what you gave me. I guarantee you’ll get more ROI with my plan.


  1. Now is a good time to remind everybody that these views are mine and mine only – not those of my company.

    I know a few people presenting at both TechCrunch and Demo right now, and while 99.99% of these companies suck, there can still be some good ones.

    I still use CakeFinancial, for example.

    Comment by Ryan — September 8, 2008 @ 2:12 pm

  2. “Tweens don’t have money”

    But they do have a large amount of purchasing power. From a quick Google search:

    “The value of this exact market hasn’t yet been tallied, but a 2005 report by Packaged Facts counted 29 million U.S. kids ages 8 to 14, with a combined annual purchasing power of $40 billion. Nearly 90 percent of these children are now online, which means there’s a lot of money to be made by websites that can capture the kids’ attention and their impressionable eyeballs.”


    The article is a year old, but the value of the market has not shrunk dramatically I’d wager.

    Though reading through tweegee’s website (from the name alone I assumed it was a twitter clone at first) I’m shocked at the idea. You’re right that

    “They also don’t want to be tweens, they want to do what the older kids are doing.”

    Tweens are motivated to be grown up at a younger age, hence the commercial success of Hanna Montana by Disney. They crafted this celebrity to the demands of the Tweet market to make them feel more grown up.

    I don’t think the interests of the Tween market (be older faster!) and the $40 billion purchasing power (from the parent’s wallets) will translate into a successful social network.

    But being a “destination site that empowers Tweens to express themselves creatively and safely in an innovative and customized online environment.” (emphasis added) will have parent’s looking kindly at Tweegee as an alternative to the ‘sexual predator filled’ Myspace and Facebook if Tweegee can reach these parents.

    Comment by Kai Davis — September 8, 2008 @ 2:46 pm

  3. Contrary to public belief, Myspace and facebook aren’t filled with sexual predators. They make up a very very small percentage of actual users.

    Even so, most “sex offenders” on myspace aren’t actually trolling for kids – most of them have friends their own age in their profiles.

    Most of the cases of “predators” we hear about are cases where a 16 year old girl went and met a 19 year old boy, then when her parents found out she said “rape” so she wouldn’t get in trouble.

    The problem that they’re going to face is verifying ages. If you have a hotspot of kids, you’ll attract that small percentage of predators, and they’ll get in somehow. telling kids that they’re safe here instead of teaching them how to stay safe anywhere won’t solve the problem. The problem will be solved when little girls are taught not to meet guys from the internet in real life.

    Comment by Ryan — September 9, 2008 @ 2:24 pm

  4. 3. Getting bought by Google

    Exclude that as well please 😉

    Comment by doom — September 14, 2008 @ 7:03 pm

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