On the death of Pyra
There was a time not so long ago when venture capitalists were handing out money to anyone with a business plan. Revenue didn't seem to matter, the important thing was doing something, anything on the Internet that might possibly bring some users to the site for something useful, and then, hopefully, those users would use a free service, any free service as long as it was on the Internet, and maybe someday parlay that use into a revenue stream.
Today, we know for sure that doesn't work. When I was looking for work last February because the company I was working for was part of this make money someday, somehow revolution, I talked to a bunch of places who were also in that market, most of whom were in the same sort of grey-area of revenue models. We were all full of ourselves then, talking into a frenzy about viral marketing, vertical markets and leveraging affiliate programs, feeling so smug as we looked down the yellow road to IPO. After a while, it became clear that our dreams weren't the answer, that while the Web was unlike anything else, it was like everything else. In order to survive, you need money coming in on a regular basis.
And the smug companies who turned me down went out of business, companies who wanted me, who I believed in, offered me a small severance for my troubles, carted my desk out to a Uhaul and put a for lease sign in front of the building. The times are changing, what seemed so great just a year ago now seems so obvious today that it would never work.
I have to ask, why did we get so caught up in venture capital money? Was it the lowered risk and perceived safety net that having several million dollars in the bank provides? What's so bad about starting a company with a small loan, doing everything you can yourself, then creating goods or services and selling them, growing the business and adding employees as needed? Maybe I'm naive, but I think we just forgot, lured by the big checks from VC's that were flowing like water. Now that those checks have stopped coming, it's a different world, hopefully a smarter one.

