Thanks to Dave McClure, I had a chance to sit down the other day with Scott Rafer, CEO of myBlogLog. In the course of our conversation (largely reliving the ups and downs of the online business sector from 98 to present), Scott made the good point that when it comes to a business idea or company – being too early is the same thing as being wrong. And from a business and investment perspective he’s right.
Seeing an idea born out by another company later on down the road doesn’t mean you were right at the time – it just means you weren’t crazy in the first place. If you were right, then you would have waited until the timing was right. As the cliché goes, timing is everything.
For instance, at then encoding.com, we came up with the idea of building a web service for people to upload their home movies to share online with their friends and family called myhomemovie.net. We came oh so close to launching the service, but could never get the economics to work – users had no bandwidth to support video, servers were expensive, storage was even more expensive and bandwidth was even more expensive than storage. We even looped in att worldnet to see if we could make it work. In the end, the numbers never penciled out and we rightly scraped it. Now just because YouTube came along 7 years later to sell itself for $1.6 billion dollars doing essentially the same thing doesn’t make our idea right since the timing wasn’t right.
I even wrote a business plan in 2003 that is strikingly similar to what the Fon guys in spain are trying to do these days. I pulled the plug on the project feeling a consumer wifi play was too early (though I had nibbles from angels so I knew I wasn’t crazy). Scott made the counter argument that my plan wasn’t too early but that my idea and Fon’s awere and are likely just wrong. His point is that given the rollout of 802.11n, public wifi networks, and high speed wireless broadband from WiMax to affordable 3G effectively marginalize the market potential for a personally deployed wifi network like Fon is trying to build. Time will tell on Fon, but sometimes you’re not too early, you’re just wrong.