Monday, July 15, 2013

Michael Birch's 8 Years to Overnight Success

I'll freely admit, I never thought much or or about Bebo, the social network that Michael Birch sold to AOL for a pricey $850 million in 2008.

Bebo occupied the same space in my mind as Hi5, Tagged (which, ironically enough, now owns Hi5) and a similar bunch of whimsically named also-rans.  As a result, I thought of Birch as lucky, rather than good.

This was a lazy and incorrect assumption on my part.  This recent profile of Birch's overnight success (which took 8 years and three failed startups) disabused me of that notion:
http://bit.ly/1bDs6qx

It's a great piece, but here's the summary:

1. Birch launched Lemonlink, a web-based address book in 2000.  Despite all his efforts, he couldn't push its viral coefficient about 0.7.

2. Next, he mortgaged his house, and he and his wife Xochi ran a babysitting service that also failed to take off.

3. Getting desperate, Birch partnered with his brothers on an online wills business which also tanked.

(I'll note that all of this took place during the worst ravages of the dot com crash--it was pretty hard to make anything successful in those days.)

4. Startup #4 was BirthdayAlarm, which reminded you about your friend's birthdays.  He paid $99 to advertise it on Cool Site of the Day (holy crap, now that's a blast from the past!) and gradually grew it $10,000 per month and moved his family to San Francisco on its revenues.

5. Startup #5 was Ringo, an early social network he coded in 13 days and grew to 400,000 users.  He ended up selling to Tickle.com for a couple million in stock.

6. Startup #6 was Bebo, which began as yet another address book.  He was able to build it to 6 million users while waiting for his non-compete with Tickle to expire.  He then built it into a full social network.  And waited.  Nothing happened.

7. After two months, Bebo suddenly took off.  For whatever reason, British and Irish teens took a shine to the site.  At its height, it was the highest trafficked site in Ireland, passing Yahoo and Google.  Birch sold it to AOL on March 13, 2008.

This isn't overnight success; it's the triumph of persistence.  Of his six startups, three were outright failures, one (BirthdayAlarm) was a niche lifestyle business, Ringo was barely above acquihire level, and only Bebo was a hit.  But all the experiences and learnings helped Birch build Bebo into what it was, and with exquisite timing, he sold before the global crash in 2008.

This doesn't guarantee Birch success in his future endeavors, but it does show that he earned his luck.

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