Perception vs Reality: How these 5 Startups are really growing

by adam on October 21, 2012

In many tech startups there often exist two different stories for how a company has gained it’s hard fought success. There is the story that gets told in the news media and distributed on sites like hackernews and techmeme, and then there is the un-told story that underlies the reality of how the company is actually growing.

Here are some examples of these two different stories:

Perception Reality
AirBNB kids-couch-surf-flickr-brandon-cripps

Collaborative consumption is driving new demand for previously un-used supply.
abnb

Land-lords are using airbnb as a channel to market their under-utilized or vacant rental properties. Source.
Twitter US-State-Department-Taps-Twitter-for-New-Age-Global-Relations


A democratizing force of good for the world where everyday people are given a global voice.
fake-twitter-accounts


A navel-gazing wasteland of internet pundits and pseudo celebrities where fake accounts drive a large percentage of traffic. Source
YouSendit imgres


Yousendit is popularly known as file hosting business for all types of business’s to swap large files with each other.
imgres-1


What they don’t tell you in the press is that the service is used by pirates and pornographers to distribute illegal content.
Justin.tv, Ustream imgres-2

The popular myth behind startups Justin.tv and Ustream was that they were riding the wave of a new live broadcast revolution powered by UGC.
justin


The reality was that both sites turned a blind eye early on to pirated content that was being live broadcast around the world, fueling growth in visitors seeking this content. Source.
Scribd scribd

Scribd launched publicly as a ‘youtube for documents’ and a way for author’s to self-publish their work, democratizing the publishing business.
clip_image002_2


The reality paints a different picture, of pirated content driving the lion’s share of pageviews, while other original content is left in the dust. Source.

2 comments

Great list – I know that I’ve created a least 12-15 twitter accounts of my own for various projects that are now zombies – and I’m not even a spammer.

For some reason this post brought up a notion I’ve been kicking around in my mind for some time, which is trying to estimate the percentage of startups I read about that use the “illusion” of growth to drive actual growth. A good example would be a company pitching a story that they’ve had some *ridiculous* number of signups over the last few days, which in turn leads to a Techcrunch, HN, VB, etc. article, and thus a glut of new signups based primarily on FOMO. The question is – did that startup really have an initial surge of signups to begin with, or was it a made up number created simply as a way to hack reporters and get the word out?

The speed of the news cycle means reporters are spending less and less time on background/diligence of the companies they write about, and I fear this scenario actually happens way more often than we think. Ethical? Unethical? Fair in the world of “growth hacks”? Curious to know if you agree/disagree, or have any other thoughts on the topic.

-M

by Matt Hendrick on October 22, 2012 at 9:14 am. #

Interesting info Adam – Scribd for one used to be good to publish your own stories and/or full novels – now I tend to agree with you that a lot of it is pirated content.

by Christopher West @ SEO Works on October 23, 2012 at 8:44 pm. #

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