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Build to flip?

Tuesday, December 15, 2009 by Dave Winer.

Lots of interesting developments yesterday, and I'm glad to have a front row seat. Actually in some cases I have a seat in the dressing room, so I have to be pretty careful about what I say.  

First, New York has become much more interesting in the tech world. I spent just two days hopping from rock to rock, and didn't land on most of them, but wow, there's something going on there. 

In New York as on the west coast, some companies are built to flip, meaning they don't intend to be standalone companies. They were just building features or market share, intending to be bought by a big company, probably Google.  

Pretty sure that bit.ly, a company I played a role in founding, was running a Build To Flip plan. I think we found out yesterday that it didn't work.  

I think in general, even if your plan is to flip, you should run a company as if no one will buy it. That your liquidity will come in the form of profit from sales of services and products to users. It's good discipline. Keeps the team focused on who and what's important. 

Had bit.ly been running such a program, they would be a lot further along with Bit.ly Pro, a service they announced yesterday, probably in response to Google's announcement of their URL-shortener. (If it wasn't a response it was an incredible coincidence in timing.)  

My issue with bit.ly is the instability it adds to an already-fragile Internet. They removed one element of the fragility yesterday, or showed how they plan to remove it. You don't want every link on the realtime net to go through one domain. Now you can have your links go through your own domain. But I have a better deal with Adjix, one that removes the other part of the stability problem -- they also mirror my data to a bucket that I own on Amazon S3. So, if god forbid something bad should happen to Adjix or Joe Moreno, I just point the r2.ly domain at the bucket and everything keeps working. No broken links. Should both Amazon and Adjix fail, and there's still an Internet (a fair question) I can take the data and move it to another server and it will work just as well there. All it depends on is Apache or some other static HTTP server. When bit.ly does that, they will really have a Pro version. This announcement is a Band Aid, to stop the bleeding after Google (presumably) said no to buying them. 

Back to New York. 

The big question I have for the brilliant young tech startups of New York is this -- are you trying to become an outpost of Silicon Valley or are you wanting to build a new layer on tech, independent of the west coast?  

BTW, it's not all a rotten mess on the west coast. I have become a huge admirer of Matt Mullenweg and Automattic in the last year (not that I wasn't already smitten before). They did two beautifully disrupting things in 2009 all while growing their freemium cash-generating business -- they implemented rssCloud and the Twitter API. And the year still ain't over.