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A Great Product Design Is Not A Business Model

Rdio ( the early streaming music company) was started in 2010 with previously successful entrepreneur founders and $117.5 million dollars of investment. They offered a well designed service for $5 per month delivered on the web or your Blackberry App. But, in late 2015, they filed bankruptcy and sold the IP to Pandora for $75 million.

The point: while they had great product sense, they focused too much on the product and not enough on their business model and marketing. They wanted to be profitable too soon so they were too cautious in their approach to growth. Their business model required achieving the network effect.

When both time and money are scarce, how do you allocate them to develop both a great product and rapidly growing revenues and when should you target profitability?

Read the full article, “Why Rdio Died” (even with a head start) by Casey Newton here:

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