robles

"What Portland doesn’t have is capital. Founder friendly, fast moving seed capital."

The poster's site, COLOURlovers, apparently has over 500,000 registered users, ~195,000 UVs/month in the US (according to Compete) and a lot of engagement. It's not Facebook or Twitter of course, but it looks very solid for a niche community.

Which begs the question: why is outside capital needed here? Usage-wise, this site has enough scale relative to the niche that it should be able to monetize its popularity. This hardly seems like a case of needs-more-employees, needs-more-servers, needs-more-marketing -- things that capital is best applied to.

On the flip side, as a niche community play, COLOURlovers isn't exactly the kind of site with the kind of growth potential startup investors have traditionally looked for. So while there may be a lot of "founder friendly, fast moving seed capital" out there right now, so the fact that the founder "just raised a large seed round from some of the top VCs and Angels" demonstrates the fact that there are an awful lot of angels and VCs who are stretching to put their money to work. In the long-run, I'm not sure that benefits founders of sites like COLOURlovers even if outside capital provides some immediate comfort.

Figs,

I wrote this article. I think it's more accurate to say "Building software on top of someone else's web api can be a really, really bad idea" -- if you don't do due diligence. I've written about the perils of building on top of consumer web platforms in the past, and personally think there's far more risk in building apps for, say, Facebook and Twitter, than incorporating into your own product a commercial API that you've vetted reasonably well.

Developers/entrepreneurs need to be pragmatic. New ventures that spend all their time and money trying to eliminate risk usually fail; the ones that succeed instead try to manage it. When working to get something to market to see if it will fly, it can be a huge mistake to invest in building low-level functionality from scratch. Most developers/entrepreneurs, for instance, aren't going to build their own video encoding engine. Sure you could use ffmpeg, but out of the box ffmpeg is hardly Zencoder. The time, cost and functionality advantages of Zencoder certainly outweigh whatever risk there is that Zencoder would go out of business in the near term.

In short, it's about cost and time-to-market. Reinventing the wheel usually increases both. So unless you have unlimited resources and already have a strong presence in a market, it's far better to bring a lot of this stuff in-house after you've validated that there's a market for your product and it's making some money.