This seems to be an indication that maybe we're getting past the bogus math of the first dot-com era. In that time a lot of companies were built on the following "business plan": enter a market worth X (where X is large) dollars, posit that even a tiny percentage (say 1% or 0.1%) of X is still a very large number, enough to support a company with many employees, wait for the investments to pour in. The problem with this line of reasoning is that being able to capture any part of a market is difficult, regardless of its size. Earning a million dollars is a difficult proposition whether the market size is currently non-existent or even if it's a trillion dollar global industry.
And that logic transfigured itself in the "web 2.0" and "social" era to something like the following: grow business to X (where X is large) users, posit that even a tiny per-user monetization (say $1 or cents) still results in large revenues, wait for investments. The fundamental mistake is the same. Indeed, consider that a homeless man on a busy street has the same exposure to "potential customers" as a billboard on that street does, but neither are guaranteed to generate even a single dollar in revenue.
It turns out that what's important is pretty much what's always been important in business. Does your company do something valuable? Are people willing to pay for it? How effective is your company at turning potential customers into actual customers? The better your company does those things the more likely it is to be successful.
And that logic transfigured itself in the "web 2.0" and "social" era to something like the following: grow business to X (where X is large) users, posit that even a tiny per-user monetization (say $1 or cents) still results in large revenues, wait for investments. The fundamental mistake is the same. Indeed, consider that a homeless man on a busy street has the same exposure to "potential customers" as a billboard on that street does, but neither are guaranteed to generate even a single dollar in revenue.
It turns out that what's important is pretty much what's always been important in business. Does your company do something valuable? Are people willing to pay for it? How effective is your company at turning potential customers into actual customers? The better your company does those things the more likely it is to be successful.