Why Startups Should Invent The Next Hot Sauce, Not The Next Instagram

With companies like Instagram going from launch to a $1 billion sale in less than two years, the urge to come up with the next great idea that leads to quick riches is compelling. Compelling, but misguided.

It would be foolish to think that anyone could create a pepper sauce as popular as “that famous sauce Mr. McIlhenny makes.” For over 140 years, Original Tabasco brand pepper sauce has been made and distributed by the ancestors of its creator, Edmund McIlhenny. Very little has changed since its creation when they sold bottles wholesale to grocers for $1 a bottle.


The rush by investors to find the next great tech startup is only a bit slower than the rush of entrepreneurs to try to build the next great tech startup. Success of a startup is graded in months and millions; companies that receive too much, do too little, sell for too low, or take too long to get there are considered failures.

While the dream of following in Instagram’s footsteps may be honorable and nobody wants to tell anyone that they can’t do something (that would be politically incorrect and nearly criminal if told to a minor), there seems to be thousands of companies trying for the get-rich-quick startup strategy and very few (none that I know of, in fact) that are truly playing the game for the long term.

There is a shortage of Edmund McIlhennys in Silicon Valley today. That needs to change. Here are some things that would-be (or current) entrepreneurs can learn from Tabasco sauce.


Build Something That Will Last

Silicon Valley is notorious for flash companies. No, I don’t mean Adobe developers. Flash companies are those that take an idea, launch it quickly, get a round or two of funding, then try to sell it to Facebook, Google, Apple, Microsoft, or any of the other players in the tech world. They want to build something as quickly as possible, pawn it off as innovation, and turn it for a huge return.

They are often based on ideas that have no chance of lasting, but that doesn’t stop investors from pouring money into them. It isn’t that the investors are dumb. The investors are smart enough to know that many of the big tech companies are gullible. They aren’t looking for something that will last. They aren’t even looking for something that will work. They’re only looking for something that will sell.

A quick scan of the portfolio of companies that Google or Yahoo have bought over the last decade will show a list that is hit or miss; many no longer exist.


Startups that build on ideas that truly innovate or create something special for the future that can stand the test of time may not be able to get the billion-dollar paycheck by 2013, but they do have an opportunity to make a lot more money in the long run. More importantly, owning their success and keeping a buyout as an option rather than a goal can make a company more inherently valuable.

Build Something Based on Your Passions

McIlhenney may have been a banker, but his passion was with peppers. Seriously. He enjoyed the flavor of his own creation with a passion, and it showed in his product.

When Pownce first hit the scene, Twitter was already growing but wasn’t nearly in the realm of mainstream recognition. Pownce cofounder Kevin Rose loved the concept and decided to build a better version. He did–for all intents and purposes Pownce was superior to Twitter.


The problem was that most people, including Rose, didn’t like it as much. Rose admitted that he liked being able to share files on Pownce but for true microblogging and lifestreaming he preferred Twitter. It was no shock that a few months after making the declaration, Pownce was purchased and subsequently shuttered completely.

If you don’t believe in your product, others won’t, either. Love your product. If you’re building something because you think it will sell and have no passion for it, you’ll have a hard time making Instagram-level money from it.

Build Something That Doesn’t Rely on Other Companies

There is nothing more disheartening in the tech world than to become reliant on another company that makes a change. Mahalo was famously dependent on the traffic it received from Google to be able to make money. When Google launched its Panda algorithm update in February 2011, Mahalo and other companies were forced to make tough choices, releasing much of their staff as a result of Google’s change.


It’s one thing to build an app on iOS. There is a symbiotic relationship between app developers and Apple that makes the success of one feed off the success of the other. In Mahalo’s case, Google got nothing from it. In fact, the Panda update was designed to purge the search engine of unwanted content like that of Mahalo. If Google’s getting nothing out of it, they have no incentive to keep the traffic faucet turned on.

Startups that rely entirely on Facebook, Google, or any other company to keep their products relevant must either make sure the relationship is mutual or figure out a Plan B if changes happen that are unfavorable. AOL, despite all of the mistakes that they’ve made over the last decade, is still hanging in there as a relevant company because they diversified. They learned the lessons of the early days when they bet too heavily on the reliance of dial-up Internet connections. Today’s AOL may still be struggling, but their struggles are spread over a wider footprint and there are more chances for success based sheerly on their bets being hedged. It’s not a perfect formula, but it’s one that’s keeping them from going the way of Netscape or MySpace.

For now.


Build Something People Will Want Forever If They Try It Once

Addiction is a powerful thing. Tabasco hasn’t had to change much over the last 140 years because they found something that people wanted. They found something that people would want to buy at the store, to enjoy at restaurants, and to advocate for to their friends and family.

Facebook is the current-day example of an addictive product that
compounded upon itself. People liked using it so they encouraged more of
their friends and family to join so they could enjoy it even more. They
turned their users into status-update-drug-dealers, playing off of
their strengths to get their users actively involved in the company’s

Pinterest is quickly becoming the addiction du jour. They hook their users and they do not rely on other companies as the key to their success. On the contrary, their connections to Facebook and Twitter act only to enhance their product. If they were shut off today by either or both, they would still be able to keep up what they’re doing.


Build Something

Of all the startup ideas that I hear about in today’s dreamy Silicon Valley world, the ones that make the least sense are the ones that require no building. It’s as if it’s a perceived benefit to have something that requires very little coding, developing, or programming.

Nothing could be further than the truth.

Tabasco is aged for 3 years before it makes it to the bottle. It’s not something that Joe Blow rich investor can duplicate. That’s not to say that in the tech startup world entrepreneurs should be building something for 3 years before releasing it. Any project that starts today and plans to launch in 3 years will be shifted, pivoted, scrapped, and replaced 15 times during the period.


Come up with an idea, work through it with people who know about the subject in question, then find a good person or team of people to make something special. Build something. Ideas are cheaper than a dime a dozen. While some of these turn out to be made of gold, there’s a winning idea for every ten thousand lousy ideas, and not all winning ideas will ever see the light of investment capital.

If it’s something that made to last, that is built on your passions, that relies on no other companies, and that will hook people from the start, then it’s something worth building.

Build it.