I'd also hypothesize that Zynga grew because they:
* Had a working revenue model, so they could pay for advertising without burning cash. And being able to advertise in the place where someone plays is helpful for conversions.
Exactly. How can Groupon be worth >$1B if the value proposition for businesses (that is, their growth in repeat customers over time) hasn't been proven?
I agree a successful business need not be unique. For example, many blogging platforms are and will be successful (e.g., tumblr, posterours, blogger, wordpress, etc).
However, if the consumer value proposition is built on providing exclusive deals, than to preserve your audience's trust, your deals need to be exclusive.
Please note, the article was also about how Groupon:
-has no top not repeat local customers
-has inside investors selling
-benefits from a temporary trends towards coupon redemption
Feel free to let me know if I'm missing any funds here.
The criteria was:
-must actively invest $250,000 to $500,000 in startups
-must have dedicated resources in NYC to review details
-must have dedicated capital
i whole heartedly agree with your statement that "metrics against a bright and shiny object, even the wrong object, are perceived as more valuable than metrics that bring you closer to building the right object".
That was my experience with showing people "designs" that were moving us in the right direction. I got 0 credit for that. I had to show the designs live (i.e., shiny) and with user traffic data (i.e., metrics) as proof.
Good to we you agree with the points about how angel investors are busy and like to ride on momentum.
I also agree with you that a bright, shiny object is very important. For web products, it's a requirement to get past the first meeting. See my earlier post:
Pitching without PowerPoint: 8 Tips for a First Meeting at http://www.kartme.com/node/31475
I'll qualify my statement on metrics by saying that, if your target angel investors aren't in your target customer segment, then you'll need metrics around usage to convince them of (a) the value of your bright shiny object to your target customers and (b) your ability to make it shine brighter. And I agree it's not about goals and plans. It's metrics about your past achievements and lessons learned.