Mission-Anchored Investments
Two investments:
Mark Zuckerberg bought Instagram for $1 billion in 2012. Marissa Mayer (then Yahoo boss) spent $1.1 billion on Tumblr in 2013. Instagram had a clear mission: take photo-sharing mobile. Tumblr's mission was not very clear as a microblogging and social media ecosystem. Largely, in a world of Wordpress, the mission of Tumblr was clouded. While Instagram went and became a category-king in its category, there was already a king before Yahoo bought Tumblr. It did not take long for Yahoo to write-off two-thirds of the Tumblr purchase price. David Karp, the founder of Tumblr is leaving Yahoo.
The best startups are those with missions. And great investors are those that identify companies with clear missions. It is not just enough to be busy; you must find a space and have a clear mission.
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The whole constructs of scalable advantage will never happen for companies without clear missions. To scale, markets must believe and accept you. It is not about technology, it is about finding a clear way to fix a friction that exists in a market. Finding a way for people to share photos on mobile was evolving then, but being another platform to blog when you cannot even use proper grammar for your name is a lost one.
Step back today and ask yourself: what is the mission of my startup? If that mission is not clear enough, you will struggle to communicate why markets will accept you. Ms Mayer did not bother on understanding what Tumblr was pursuing because its substitutes were everywhere. It never had a chance of ever being the king. That is not a smart way to invest money.
We have seen it in many instances, businesses throwing money around without demonstrating clarity and an understanding of why they do so. As for startup mission, it boils down to storytelling, when you don't know how to tell a beautiful story, it will be extremely difficult for anyone to believe what you are trying to achieve.
