Congrats to DailyStrength and what we can learn

December 3, 2008 - Get free updates of new posts here

My mentor Doug recently sold his company, DailyStrength to HSW.

Things we can learn:

1- Outside the Valley. I don’t think many people realize how big the pharmaceutical market really is. So many valley companies are creating some social this or game that and neglect large opportunities of “unattractive/sexy” lucrative markets.
2- Exits. They are good. How many companies get them vs fail?
3- Media = blah. Techcrunch disappoints me sometimes. They ripped him for selling it. Uh. Right. Just like how they wrote Facebook developer verification was genius and then said it sucked. I realize the media needs an angle for people to engage / read but this seems unnecessary. Regardless, media helps you and hurts you at times.

Your thoughts? Best comment will get a copy of Entrepreneurs Journey which was a good read. I really liked the history of kayak.com in there.

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16 responses to “Congrats to DailyStrength and what we can learn

  1. Patrick Jarrett Reply

    I remember when you told me about this site last year, glad to see he found an exit. Kudos to him.

    As for unsexy markets, you’re 100% correct, my current employer has been pursuing a lot of ‘unsexy’ clients – mining companies, international shipping etc. They are a market that gets overlooked because everyone wants the Cokes, the Googles, the Nikes.

  2. Joey Mucha Reply

    I agree that we are very silo’ed with a web 2.0/social apps mentality here in the valley. Sometimes its just easier and sometimes we are too afraid to leave. If you only read blogs like techcrunch, it makes the situation even worse. Techcrunch writers aren’t the greatest journalists and sometimes screw up the facts and that their fault. It sucks that people eat it up and regurgitate it as truth though.

  3. Yann Reply

    Well I think it’s about passion when you try build a company. You really need to like something to look into it enough and eventualy find an oppotunity, I guess that fewer people are actually interested in parmaceutical, mining or other obscure market so at the end fewer people got to see the opportunities within those markets. Perceived difficulty also increase when you look at a market without passion.

    I admire all the entrepreuneurs that take the opposite road and build the business on opportunities only. It takes some courage to be different.
    That’s the real spirit of entrepreneurship to me 😉

    About the media, well they follow the fun aren’t they ?
    + most of time they don’t know what they are talking about.

  4. Boris M. Silver Reply

    This really comes down to fundamental values and perceptions. Being on the East coast, people here value money, business, and success differently then on the West coast.

    I find it annoying that many mainstream Tech media sites have no clue about building a real business and instead resort to sensationalism on both sides. They hype up companies with no business models and no prospects (like Pownce) while downplaying or not even covering successful cash flow positive companies in “boring” tech industries.

    It comes down to values. Clearly these tech media sites value getting readership and buzz over just hunting for the truth and value in everything. The mob is fickle and these tech media sites are quick to court them, which they can’t be blamed for. I just think it’s important to understand their motivations.

    Now on the subject of “boring” businesses:

    Calling a business boring is automatically anchoring it as such. I think the difference comes down to people who find “boring” businesses as really interesting. Most people don’t know what they actually find interesting for themselves, so they will chase what’s “hot.” Some of the most passionate people I know do very “boring” things in not very hot spaces, but they love what they do and they are going to KILL it. Many people are just chasing the money and fame and the big hype.

  5. SSD Reply

    Noah,

    In all honesty, DS was not really a exit in the traditional sense of the term. It’s been well known in the Health 2.0 community for at least 3-4 months that DailyStrength was in trouble which was exacerbated with the bad economy. They were the darlings of the Health 2.0 conference last year and didn’t show up this year – why??

    The fundamental reality remains that pharma companies don’t want their ads seen next to community content. Anyone who knows anything about dealing with pharma and the associated ad agencies knows that.

    I also dispute your point of “outside the valley”. Health community sites are dime a dozen inside and outside the valley – DS happens to be best of breed and was well executed from the beginning. They’ve got great traction with their community but the monetization aspect was and still is shoddy.

  6. PiarasM Reply

    This a great outcome for Dailystrength! They really are on top of their game in creating a value service for their members.

    It seems that many people come to rely on DS for support and are very loyal to their network. It is that stickyness that seperates DS from many of the other social network sites in this space. The quality of their content is very good and constantly evolving.

    Doug and his team have done great things with building the DS brand and I am sure that this partnership will allow them to storm ahead with their community.

    BTW, How Stuff Works was one of my original favourite sites.

  7. Sam Reply

    Daily Strength is by far the best site in this niche. biggest, strongest…
    I do understand that Doug is your friend and from what i hear he is one champion! but how can a $3.1M (or even a $6.6M if they meet their goals) can be described as a success?? they raised $7M two years ago….
    ????

    as i said I am a big fan of DS but the deal does sound like what techcrunch wrote….

  8. Darren Kelly Reply

    Call me a cynic but from the techcrunch link it appears that $5-$7 million of capital was invested, and it returned only $3.13 million. This is not a success. To be fair, that drop in value is the same as the broader equity market, but the goal of startups is to create true value (touche to Boris for pointing this out).
    -DK

  9. J.T. Reply

    An anecdote: I heard recently that as much as a full fifth of the economy will be driven by the health care industry by 2015. Silicon Valley has no idea. Shhh, don’t tell…

    So my question is, what will be the Silicon Valley of the health care industry? Or will there not be a parallel, since health care is ubiquitous and everyone needs it?

  10. Small Business Marketing Reply

    !. Most of the people who make up the media these day are internet savvy (came out of a tech/programming background) and because of their familiarity and skill with the technology have figure out how to use it to”communicate” with the rest of us. They are very comfortable with technology based companies and notice a good percentage of them are based in the silcon valley.

    2. Nobody ever pay attention to small businesses that make up a goo 80+% of our economy and consequently our overall market.

    3. There are a lot of entrepreneurs who start businesses to earn a livelihood and perhaps provide jobs for others to earns a livelihood and never contemplate an exit strategy or failure for that matter.

    Your thoughts?

  11. Marilyn Wilson Reply

    I used to like DS but it is a cliquishe chat room full of emos and losers mostly. It is ok for some of the people to act like 2 year olds and others get in trouble for doing nothing wrong. It is just like high school. Doug sold out when he should have, it is sliding down its own slime into the gutter and a better one will evolve from the cyberspace that actually has some ethics. The fact that HSW owns it makes me want to throw up a little, hey I bet they have a group for that in there… along with 9990 other stupid and useless groups. What a waste of time….. but hey some people are amused watching the dukes of hazzard and americas next modle… geeze no wonder we are in trouble