In the past 3 years I have worked for or attempted to work for 3 tech startups with a focus on niche social networks.
One startup tried to go too big. One startup tried to go too small. One startup went just right.
The big startup started by hiring everybody they could, renting an expensive office, buying all the employees expensive furniture and expensive computers. Some employees even got a leased car and a rented apartment.
The small startup started by convincing many people to join in as partners all contributing their time to the venture. They convinced developers and others to contribute their time and effort for equity.
The startup that went just right spent just enough money to develop a prototype to see if the market was interested.
The big startup said they were going to be bigger than Facebook. The small startup thought they needed all the features of Facebook. The just right startup wanted to be very different than Facebook.
The big startup spent hundreds of thousands and before long their backer, Grandma, decided that they’d had enough and pulled the plug on the deal.
The small startup took up to 3 years to get some things done and then had to put off going live, because everybody needed more time to complete work on their second gig.
The just right startup got together a small budget, spent wisely and then proceeded to test the market out with free and open source solutions.
In the end which of these startups got to market and succeeded. Well we know the Big Startup is already over. The Little Startup is still moving along and has some promise, but who knows. The just right startup is going live.