The YouTube story is indeed a fascinating one. I’m still getting my head around it, but it does certainly go to show how many great ideas, relatively simple in concept, are still waiting to be realized on the web - and the fact there are many more millionaires yet to be made.
We can all find inspiration in that!
I’m an admirer of YouTube; as much as for their success (perhaps more), as for their service. It doesn’t really matter what happens to YouTube from this point onwards, it was the getting to this point which is truly amazing and a story which will be referred to by many in the industry for years to come. What was impressive the most, and perhaps why it was such a huge hit was that the service just worked - so easy to use, excellent streaming.
YouTube was launched early in 2005 in the same way that most great tech related companies seem to be - a garage and no real cash to speak of. The founders were Chad Hurley, Steve Chen and Jawed Karim all of whom met at their previous employer PayPal.
The story is that one night they became frustrated with trying to email a video clip. They then fleshed out the infrastructure for their video sharing platform within a couple of hours. It’s a classic scenario of identifying a problem from the perspective of a consumer and then addressing a need.
The site was open to the public in May of 2005. It was an instant hit; and word of mouth took over which fuelled the initial growth. As for revenue during this early period - there was none to speak of.
YouTube was able to secure some initial funding money due to their spike in growth. The very interesting thing here is that even with all that investment cash, very little was put into promoting YouTube; all the money went into infrastructure and responding to user requests for features. That’s one major difference to many of the dotcom bubble companies who spent up big money on ads.
YouTube played it very smart by making it easy for their users to do the promotion for them. It was viral marketing at its best; from simple ideas such has having short links to videos (easy to email) and tell-a-friend functions, to allowing videos to easily be embedded in profiles of other social networking services such as facebook. Their voting system also helped to create a sense of community as did profile pages for users.
The payoff for the YouTube founders ideas came about on October 9 when Google, Inc., acquired YouTube for $1.65 billion in Google’s stock.
From $0 to $1.65 billion in under two years - my hat is well and truly off to these guys just for that achievement. They played the game well.