Ideas
Modern Living
In 2007 I had this idea to create a social network for families with children that had special needs. It was called THE2SPOT.com . The first spot would be the resources the community had, the second spot would be the social aspect that every social network brings. I took this idea, along with a business model, to an investor who had just invested in and joined the board of the newly created social network called MOLI.COM. Moli (Modern Living) was backed by over $50M in venture funding. Behind this movement were people such as Kenneth Langone (from my alma mater). It’s goal was to rival Facebook and it's major differentiating feature was that one person would have more than one profile so they can operate with privacy. Great idea, but their main issue was the chicken and the egg - they couldn’t generate usership. When they realized they couldn’t do this, they then started to become an e-commerce platform where users could sell items to others (very similar to shopify or eBay or Facebook marketplace today). There were literally 100s of companies at this time trying to create the next Facebook in addition to MOLI.
My idea also never came to fruition. Why is that? Partly because The2spot was ahead of it’s time. In offense of myself, the special needs industry was only valued at $1B at that time. The concept of creating value for a demographic everyone had pity for was not popular. No one could fathom an online community for such a niche market that so many were accustomed to giving things away to for free. Another reason was the biggest issue with all user heavy applications today (and always): security and privacy. To have a family vulnerable enough to create a profile for a child with autism or ADHD, and then to see that vulnerability violated by a nefarious actor is unconscionable. Or perhaps I pitched to the wrong people- in 2007 there weren’t many socially conscious investors, let alone any that I knew. The last hole you can poke is perhaps the biggest hole there is: the founder(s). I had a team of roughly 5 people all very capable to do the work. But that’s not entirely what makes investors part ways with their money. Their biggest determining factor is their risk profile. When someone invests at such an early stage, they’re almost never investing in the idea, but moreso the person(s) behind the idea. This is why MOLI, an alsoran in the social media race, can get multiple billionaires on a cap table despite the fact that it was destined to fail.
Moli was founded by Dr. Christos M. Cristakos, the former CEO of E*TRADE. Investing in him makes way more sense than a bunch of recent college grads or virtually anyone else.
There is a term in startup-land called founder-market fit. It's used to describe the harmony the founder might or might not have with the industry they're trying to service. I think a more befitting term in this instance might be founder-product fit. This refers to how well the founder actually fits with the product their creating. Think of a having a really fast horse, but a bad jockey; or visa versa. Ideas are only as valuable as the assumptions they stand upon. And they are only as valuable as the individuals that try to actualize them. The best example of this is watching literally any episode of Shark Tank or Lion’s Den. Have you ever seen a really impressive person looking to raise money for a bad idea like the skinny mirror? I've had so many good ideas that I've come across and realized that without giving the impression that I am uniquely qualified to bring this idea to this market there will be a zero chance that I will be supported financially to bring it to life.
In this world, it is almost axiomatic that Dr. Cristakos could start any business venture in any industry and get funding tomorrow. Primarily because he’s shown the ability to scale a business before. Even though this has no bearing on his ability to do it again. But in investing, many people go with the Bayesian principle of judgment - If you did something wildly impressive before, you’ll have a better chance of doing it again. Some founders have an unfair advantage have access to this underlying sub-strait of strategy decisions that always seem to be the correct one. This is your Jeff Bezos, Warren Buffet and Walt Disney type. Clearly Dr. Cristakos has had this advantage for a few of the businesses he was a part of.
When you go through the interview process, the hiring manager has a puzzle in their mind, and they are seeking to find a specific puzzle piece that has the right curvature so that they know for certain the candidate will fit in their puzzle. I would go as far as saying this same exact mental process is what one experiences when pitching a business idea. You’re beholden by the puzzle in the investors head.
So the best advice I’d give my 2007 self is to not pitch your best pitches, but pitch to the batter. Perhaps talk about how similar the product was to MOLI or how I've studied the strategies of Dr. Cristakos. Maybe even study the other businesses he's invested in and find commonalities. Maybe then I wouldn't have been told to just “create a Facebook group”.
Regardless of your idea, the economics, market conditions, at the end of the day, you must mold yourself to be a piece the puzzle in the head of the decision maker.