2. I actually did get Mahalo to profitability last December. :-) Of course, the Panda Update endend that brief, beautiful moment.
3. Actually, I do mean the entire industry. Now that the internet is global, fast and ubiquitous (mobile) everything good tends to get really big, really fast. Heck, bad things get big fast (Rebecca Black's Friday comes to mind), and so do super simple things (i.e. Angry Birds).
the internet is biased toward big...
Even if there is such a need, the goal of startup would be to create a model that at scale would overperform Google. Such model is likely to be created at less than $30K monthly burn.
For example, team of two developers in couple of years may implement and fine tune some efficient social way of ranking search results. $30K/month * 24 month = $720K.
2) Jason Calacanis empirical rule: "if startup is overfunded then as soon as profitability is achieved it would be crushed by Google." :-)
3) "The internet is biased toward big..." -- I agree. But it's "big product scale", not "big organization".
2. ha
3. agreed
"Neither model is wrong." -- I agree. However "lean model" is much more common and relevant to majority of founders than "$150K+/month burn during discovery phase".
Another consideration: you made your previous company profitable with lean approach. But you did not make Mahalo profitable with "$500K monthly burn" approach.
That should teach us something.
"The whole industry is biased toward big success." - I assume under "whole industry" you imply "Venture Capital industry", not "Information Technology industry", right?