Startups that came back from the dead!

by Scott on May 22, 2008

There is such a thing as recovery in the world of web 2.0. It doesn’t happen often, but it does happen; sometimes the catalyst is a new feature or option; sometimes the service was simply waiting to be discovered; and sometimes there’s no good reason at all; the tipping point appears out of nowhere.

The five cases I’ve described below are all very different and these companies were never really “dead.” They all share a same basic trait, though: their future looked grim at one point, but they managed to bounce back and continue growing.

Pluck was acquired by Demand Media. What do you think, based on the traffic graph above, when did the sale occur? Somewhere around January 2006? Wrong. Pluck was doing quite nice as an RSS reader back in the day, but its popularity stalled in 2006, and at the end of that year they completely ditched the RSS reader idea. But, they were acquired by Demand Media for no less than $75 million dollars in March 2008! What happened? Pluck completely changed their product, focus, and business strategy: they went with a white label social networking solution, and it paid off bigtime in the end. A lesson to learn: changing everything and starting from scratch can sometimes be a good thing.

Mahalo. Hindsight is 20/20, I know, but I always thought that basing conclusions on an Alexa graph one month after a service goes live is a bad idea. Yes, the traffic looked awful back in July 2007, but it bounced back nearly after that and has continued to rise ever since. The reason for this was the fact that Mahalo is a well funded, intelligently led project with a lot of updates and new features being added nearly every week, and users (as well as journalists and bloggers) have recognized this. The idea – human powered search – seemed like a debt-incurring trainwreck, but so far Calacanis has managed to pull it off with style.

Friendster is a resilient little bugger. Today, a social network with a declining graph is immediately being declared dead meat, and we all know how many times it happened to Friendster. But, after every bad period Friendster has somehow managed to get their groove back and continue to grow. The folks at Friendster are often repeating that they’ve always been, and still are, one of the leading social networks; the hype may not be on their side, but looking at the traffic graphs, you cannot really say they’re wrong about it. It’s hard to predict Friendster’s future; with MySpace and Facebook leading the pack, and Friendster usually being late on major developments, I see them following the path of Bebo which recently got acquired by AOL. Given their history so far, though, it’s probably not a good idea to predict that they’ll fizzle out if the acquisition doesn’t happen soon.Read more.