Ruth Ann S. Basnillo                                                                                                                               6/30/2008

SYSANAL

O0C

Case study

Joshua Schachter

Founder, del.icio.us

Story:

            del.icio.us got started way back 1998 when Joshua Schachter created a website called Memepool wherein stuffs are posted from the contributed links of some people that’s edited and chronologically sorted and updated- basically a blog as called nowadays. By 2001, Schachter had a text file filled with 20,000 links and he couldn’t find anything in those files anymore, so he started putting in notes. After some time, he couldn’t handle it anymore, so he built a sort of next generation of that file called Muxway. That’s when he hit on the idea of tagging. There was a bookmarklet then where things are saved and described through tags. And the interesting thing is that there were some 10,000 daily readers looking at his stuff. He did several projects along the way including the GeoURL that’s like Reversible. Soon, in later 2003, Schachter worked on a multiplayer version which was del.icio.us while working as a quantitative analyst at Morgan Stanley. But all the while, del.icio.us was growing and by November 2004, it had 30,000 users. Soon, his group at Morgan Stanley began to come apart and that’s the time he left. In early 2005, he decided to turn del.icio.us from a hobby into a company. In March of 2005, after having left his job to found del.icio.us, he raised $1 million in funding. And in December of that year, it was acquired by Yahoo for an amount rumored to be about $30 million.

THREE THINGS I LEARNED:

I learned that in a startup, you don’t have to raise much money because sometimes, being overcapitalized could lead to failure. As said by Schachter, there are general ills with being over funded because the VCs would want you to spend even you don’t have to just for you to be able to convince them that the money is going somewhere. In the end, you would turn to them in the very time that you really badly needed money. The problem would be instead of focusing on the value of the data to be fed for the people that don’t need a lot of funding, you would look for other things that would need funding just for you to meet the requirement of the VC.

            Next, I learned that just like how del.icio.us and other companies got started, startups could actually be hobbies that would be needed and have pleasure upon not just by you but by other people too. So, you have to be very open to others’ needs because they might need it more than you do. Never look also at your hobby as something that’s just for you because you might get more money when you open it to others.

            Lastly, I learned that in a startup, you should always have an eye towards innovation. You need to do as much as you could many improvements with your products so that the users would continue using those. And whatever your innovation is, question every single aspect that would affect your company.