Google, Microsoft, Digg And Quitting While You’re Ahead

As you know I’m lucky enough to be in Las Vegas at the Microsoft MIX08 conference. Last night I joined the Microsoft guys for a superb meal at Morel’s, after which Grant Shippey decided to try our luck at a little gambling. We hit the roulette table, and to cut a long story short I had a really good evening, riding my luck for 3 hours and at one point tripling my cash. At that point I should have quit while I was ahead but alas, I did not. Still the experience was awesome.

This morning I read news on TechCrunch that Google and Microsoft are eye-balling Digg. Digg has evolved into one of the poster-children of Web 2.0 with it’s founder Kevin Rose being one of the most visible, outspoken and popular entrepreneurs of the social Web. Kevin sat on a panel here yesterday and he comes across as a pretty unassuming guy, though there’s no doubt he knows what he’s doing and where he’d like to take his product. On two or three occasions yesterday he had to redirect questions about Digg and this morning’s news perhaps shows why.

I obviously have no idea what Google or Microsoft would offer for Digg, and I’m not sure that if bids go in or a deal goes through that we would ever know. But I do think it would be a good time for Kevin to do a deal. You see Kevin, like many social Web entrepreneurs, will probably need to quit while he’s ahead.

Let me explain. Do you remember Friendster? Friendster was the social network that mattered before Facebook came along. Facebook came along and changed the game. Same with Bloglines and Google Reader – Google Reader is changing the game. Slashdot and Reddit. You see – inventing a great social application is one thing. Making it popular is another. But once you’ve done both, knowing when it’s right to sell (even if you desperately want to carry on as far as possible) is what separates excitable entrepreneurs from spectacularly wealthy people. I should’ve quit when I tripled my money last night. I didn’t. I thought I could quadruple it. I got greedy.

Greed is not the only motivation for hanging on too your startup / app / site for too long. It could just be affection – many entrepreneurs suffer from the inability to dissociate themselves from their company when they need to (in fact you’re only an entrepreneur when your company exists beyond and without you).

It’s a tough one though because a year and a bit back Mark Zuckerberg said no to a billion dollars for his baby from Yahoo!. A BILLION DOLLARS! Knowing what happened to Friendster how hard a decision must that have been to make? It turns out it was the right one as Facebook continues to grow (though we’ve seen the SA user base plateauing) and the value of the site is growing.

I reckon Kevin Rose knows that he doesn’t have a Facebook, but that he’s on a really good wicket nonetheless. I think he’s ready to ‘quit’ while he’s ahead (though I can’t imagine he wouldn’t be integrally involved in the site moving forward) and I think his timing is perfect.

Good luck Kevin, hope it all falls into place!

Update:

Seems I’m not the only person who feels this way…

Another update:

Digg has stated quite categorically on their blog that these rumours are ‘completely inaccurate’:

Normally our policy is to not comment about things like this, but this morning’s rumors about a bidding war involving Google and Microsoft have created such a stir we feel compelled to tell you all directly that they are completely inaccurate.

Sorry to burst any drama theories, but they aren’t true. We remain focused on improving Digg and rolling out great features.

Still, I think I have a point about the whole quitting while you’re ahead thing :)

  • StrongList

    I agree, now is a good time to sell. However Im not sure your friendster analogy applies very well. If you recall during its heydey friendster was very slow. They may have had some scalability issues. Digg for the most part is still on its games.
    Never the less, now does look like a good time to sell.

    Digg has peaked?

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