GMail Deja Vu

Back in 1999, we thought we should try incubating a company. It was all the rage at the time. I've since sworn it off and will rely on entrepreneurs to do what they do best and i'll stick to the funding/mentoring part of the VC equation.

But it was a heady time. A guy named David Kent came to see me with an idea that he wanted to start a business around. He couldn't be the entrepreneur because he was a practicing surgeon. David had a neat idea. He wanted to provide a free-email service for consumers that ran ads in the emails based on the content of the message. We bought into it. And incubated a company called FaveMail.

Needless to say, nobody has heard of FaveMail. Our execution stunk. The idea was years ahead of its time. And so we took the failed investment, used what was left of the business to buy a troubled email service provider called Bigfoot Interactive, brought in an experienced management team, and built a very nice company that is one of the leading email service providers. So there's a happy ending to this story.

The lesson i take away from the whole thing is great ideas don't make great investments - great entrepreneurs do.

Comments

[Dan Malven]

(for readers out there...I was part of the team at Flatiron at the time Favemail was incubated...)

I've noticed a key difference between Favemail and GMail: With Favemail consumers got to choose which ad went in their mail, and it didn't have to be an ad. Think of it more like a personal "bumper sticker". It could say "My son is an honor student..." or it could be "I bought this digital camera at Amazon and love it, click here to buy it too." It was very difficult to implement in a simple way for users, so that was a problem, but it addressed an issue we are seeing in other areas such as using AdSense in blogs: some consumers do not want to be associated with certain advertisements. Fred had an issue here with ads on his blog for companies going public by backing into publicly traded shells. That is not his business and he doesn't condone it, yet it was appearing in his blog. It will be interesting to see how GMail addresses this problem.

I'm still a big believer in the overall concept because email content is the last great non-monetized ad inventory space on the web (at least until RSS traffic rises), but the story is not nearly written on how to implement it.

[Brian Dear]

Ah yes, Favemail. At least *one* person has heard of Favemail. Actually a bunch. It was in use at MP3.com back in the day; if I remember correctly, some of the marketing folks tried to push it for inclusion in outbound artist emails. All I remember of it was, uh, no way was I going to use it, sorry to say!

And no, email content is not the last great non-monetized ad inventory space on the web. Nor is RSS. You ain't seen nothin' yet.

[apuhjee]

You got one thing right. Favemail was ahead of its time.

And I know at least 30 other people that know of this company all too well. They were easily the brightest, most talented group of designers and develepers I've ever had the privilege of working with.

Thanks for the nightly bocconcini fritti and limo rides back to Stamford by the way.

[apuhjee]

Oh irony. Bright develepers = developers.