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Summary:

Digg was one of the most iconic of web companies. In between its supersonic rise and meteoric fall, Digg changed the media landscape forever. And it did one more thing – it seeded many more startups by fostering talent. And in doing so, it lives forever.

digg-fail-whale

The Digg Townhall meeting broadcast live from the Democratic National Convention in Denver, Colorado. 2008. Photo courtesy of Eric Magnuson, via Flickr

Having spent a major part of the week sitting on a beach, practically disconnected to the incessant drumbeat of the news cycle, it was hardly surprising that I missed yesterday’s hoopla about Digg (or whatever was left of it) being acquired by Betaworks for around $500,000 and some equity. Betaworks is going to use the brand (and its traffic) to resuscitate its News.me app. Earlier, The Washington Post acquired some of the talent from Digg for about $12 million.

Failure, throughout ages, has been a reason for a public spectacle. So why should it be any different when it comes to Digg, one of the more iconic web companies since the dot-com bust at the turn of the century? It is hardly a surprise that much of the commentary around Digg has focused on the remarkable failure of the company.

A lot of attention has been devoted to Digg’s bad decisions – not selling out to Google, bad technology choices, aping other social networks or essentially misreading & mistreating their community. I don’t disagree with any (or all) of those arguments because they are right. Even back in early 2009, it was quite evident that the changing nature of the web was going to spell the end of Digg as we know it.

If the yardstick of success is making money for the founders, employees and the investors, then Digg will go down in the annals of web history as a colossal failure. However, if your yardstick of success is defined by a company or a product being a change agent and an instigator, then Digg was a smashing success. It is maybe a failed new-media company, but it is also a pioneer that changed the media landscape not by creating anything, but instead by putting the people in charge of what was media. Like Flickr, it was a company that opened our eyes to the potential of the social web. It also reminded us that links are and will always be the atomic unit of the web.

Talking about a revolution

TV Anchor Leo Laporte crowd surfing at SxSW 2010 live taping of Digg Nation. Photo courtesy of John Pozadzides via Flickr. John P blogs at Onemansblog.com

Having spent more than a decade blogging and nearly twice as much time writing about technology, I have observed some of the well-known names in the industry make their moves.  No surprise, I got a courtside view into Digg and the people who made the company. I first met Kevin Rose, Digg’s founder, when he worked for Tech.tv and I worked for Red Herring. Both companies were around the corner from each other. I met Kevin’s partner in Digg, Jay Adelson, when he was busy trying to grow Equinix. Later, Kevin’s other startup, Revision 3, produced and distributed The GigaOM Show.

These social connections allowed me to get to know a lot of people who worked at Digg. And all I can say is that during Digg’s heydays — 2007 to 2009 — the company had attracted some seriously smart people into its fold. Designers, engineers, growth hackers, community experts — Digg was for a while one of the coolest companies to work for as long as you were young, nerdy and totally obsessed about Digg. They had little or no regard for the legacy of media or the web and tried to keep inventing things they thought would be cool.

Later, that spirit of constant reinvention would come in handy for many of these kids — and they were really kids — in the future.  I just did a back-of-the-envelope count and ended up with more than a dozen startups that have been started by ex-Diggers. Here is a sampling of names I came across:

FantasyBook (acquired by Citizen Sports), Well.io, SimpleGeo (acquired by UrbanAirship), Sprint.ly, Toodoo, Circa, Fflick (acquired by YouTube/Google), Milk (acquired by Google), Fanvibe (acquired by beRecruited), ShindigSF, mojoLive, Kiip, Frugalo (acquired by Twitvid), Toobla (shutdown) and a bunch of others that are still in stealthmode. Others ex-Diggers have played big role at newer companies. Eventbrite team is chock full of ex-Diggers such as Ben Standefer. Matt Van Horn and Daniel Trinh are at Path, and Chas Edwards is now working for Luminate. The list goes on and on.  (See disclosure below)

The Mothership is calling.

In a discussion thread over on Facebook, Standefer pointed out that between 2007 and 2009, Digg moved what he calls “60 awesome engineers and startup people to SF from all across the country. A lot of those people wouldn’t be out here founding startups if Digg never moved them out here from wherever they used to live. “

Joe Stump (via CrunchBase)

Joe Stump, co-founder of SimpleGeo and now Sprint.ly wrote in an e-mail that “Digg was comprised mostly of people who were recruited from outside of the Valley into what was, at the time, beloved by the media, users, and internet.” He recruited engineers who moved from Michigan, Illinois, Washington.

“Our first engineer was from Nova Scotia, Eli (our second) lived in Maryland,” Stump said. “I think a lot of the magic, when you look back at who our early hires were (Matt Van Horn at age 22, Brian Wong at age 18, Jeff Hodsdon at 19, Danny Trinh at 19) you’ll find a few common traits.”

Many of these kids were fanboys who loved Digg and were essentially no different than the community there. Stump pointed out that the company took big gambles on these young kids who basically were ecstatic to be at Digg and very hungry to prove that they were worth the shot. Stump argues that he didn’t have the credentials of being a Lead Architect but the company gambled on him. It created a fierce desire to not screw up. “I think this culture of taking chances on young talent and, subsequently, giving them room to grow was an amazing thing,” Stump said.

We are the media

Daniel Burka with Kevin Rose. Photo courtesy of Thomas Hawk via Flickr.

“For me, the key driving force at Digg was a sense of mission,” said Daniel Burka, a well-known designer who moved to San Francisco from Canada. Burka, who worked at Digg and later co-founded Milk Studios with Rose, pointed out that “during Digg’s first few years, I genuinely felt that we were pushing the boundaries of media, democracy, and technology.”

It is easy to forget that Digg played a big role in making media social. Digg put “ME” in media. “It’s easy to forget now, but media was incredibly unidirectional in the pre-web-two-oh era,” Burka wrote to me in an email. “Digg was one of the first powerful forums for participatory media, whether that was the ability determine what constituted the news of the day or to comment on any story told anywhere on the web. I’m sure you can hear the passion in my voice as I’m writing this. They were heady days… and, despite obvious shortcomings over time, Digg honestly did shift the media landscape in important ways.” Digg Spy and Digg Stack were too minor examples of how Digg tried to deal with what was essentially a precursor to today’s information deluge.

Back in the early part of this century, voting on content was a new way of making the web useful. Digging became part of web behavior and since then we have seen Facebook (likes), Twitter (retweets) and Google (+1) also incorporate that same behavior into their products. Tumblr has reblog and Pinterest has pins. And pretty much every consumer app now uses voting as a tool for quick engagement. Digg’s patents around voting were useful enough for LinkedIn to pay between $3.75 million to $4 million for them according to published reports.

Digg became such a driver of traffic to websites that it prompted even the most haloed brands — The New York Times, for example — to add “Digg” voting buttons on their stories. Today, it is common place to see Twitter, Facebook, Google and The Fancy chicklets all over the web. Digg, was the anabolic steroid of the web — tech blogs (including ourselves), Huffington Post-style publications, and others owed their rise to the top to Digg.

Whether media doyens want to admit it or not, Digg changed how a lot of media was created and shared. Top ten lists were popular on Digg and generated a lot of traffic (and by extension were good for low CPM advertising) so even the most established media companies embraced that. Headlines were crafted to get the highest amount of attention and votes on Digg.

Digg is gone, but it will always remain with us. In its defeat, it turned out to be a victor.

Disclosure: True Ventures, where I am a venture partner, is an investor in Kiip and UrbanAirship and was an investor in Milk Studios. True is also an investor in GigaOM. 

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  1. Chetan Sharma Friday, July 13, 2012

    great perspective, Om

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    1. Thanks Chetan

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    2. sucker !!!

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  2. They altered the media – they never were the media._They were so left wing and block all opinion of what they didnt like – their site plummeted because of this._They pretended to be the voice of people – they were not — they failed – serves them right.

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    1. Sam McQueen Friday, July 13, 2012

      “they never were the media”…. Digg was once upon a time kicking it up there with the top 100 websites in the entire world in terms of traffic rank, just to put things in perspective. It was, very much so, a very large part of the media.

      Share
    2. Fatso Bastarde Friday, July 13, 2012

      Man, I felt just the opposite. I spent a lot of time on that site, then it seemed like every discussion was filled with right wingers and Ron Paul supporters. I like to listen to the other side, but it got so ridiculous I left and never went back. In my mind it will always be a haunt of the Right. Strange differences in experiences.

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      1. All I ever saw was crazy left wing stuff. A single conservative comment would get absolutely pummeled.

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  3. I have a great deal of respect for Kevin. I was listening to him the other day on a podcast. The dude is not afraid to fail and he owns what he did right and wrong at Digg. I like that in a leader. That obviously spawned like minded individuals and efforts.

    I agree it was a success in failure and they left some valuable lessons for the rest of us. Great post Om.

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    1. Thanks Keith

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  4. Greg Golebiewski Friday, July 13, 2012

    A failure by companies like Digg, heavily supported by VCs, has yet another dimension: it has taken funding from other (now we can say) better startups.

    Of course, there is no guarantee that a startup will ever get any funding. No one should expect that. Still, I am sure there were plenty of guys as smart as Kevin Rose or Jay Adelson, who had to fold down simply because Digg was already “in the pipline,” as the VCs say.

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    1. Well said.
      I can’t wait to see the faces of the Andreessen Horowitz crowd when I tell them: I have this idea; it’s going to fail, but it will be a victor anyway, b/c of its huge impact on the media/internet. Are you willing to invest a few millions in this “impact”?

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      1. Victor

        I respectfully disagree with your characterization. The point of the post is that a company’s legacy isn’t just financial – it is a product and change, so let’s not forget in this case.

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    2. Greg

      It is hard to prove that someone was/wasn’t funded because of digg.

      Share
      1. Greg Golebiewski Saturday, July 14, 2012

        That is why I wrote nobody is entitled to any funding. But “opportunity cost” is a real economic term and it should be a factor in any analysis of any successful and not-so-successful venture. Digg’s impact — to use your words — includes money lost in it and the loss of any revenue/profits from other alternative investments that could have been made instead.

        And, let’s face it, with all due respect to Kevin Rose (he is an investor as well) but Digg is not the only start-up he had started and failed miserably. How many other people can have so many second and third chances with so poor a record?

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  5. Really nice article. Great to know the background.

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  6. Nice analysis. It is always this way in the tech. World – the pioneer disrupts and the followers perfect it to rule the market and make money.

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    1. It is not the first time – we have seen this movie play out before.

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  7. IS this a joke? I mean, I know GigaOm is scared shitless over losing their sole source of traffic…but still priasing Digg for changing anything?

    Facebook would still be as big today without Digg. So would Twitter, Linked In, Pinterest, etc. NOTHING would have changed. To this day, 98+% of Americnas have never HEARD of Digg.

    Granted, I know to GigaOm that sounds good, since 99.9% have nver heard of you…but still.

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    1. @lakawak . Given that you are a guest here, I am just going to just say that i am pretty sure you didn’t read the post, but nevertheless thanks for sharing your opinion.

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    2. Welcome to The Troll Zone.

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  8. Great post Om. Thank you for rekindling some great memories! :)

    To quote sully213 who commented on Kevin’s latest submission over at Digg

    “And, just one more time for the nostalgia:
    09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0″

    #ftw

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  9. Lawrence Samantha Friday, July 13, 2012

    Great article. I want to throw out a question for you and everyone reading this though. You mentioned that “links are and will always be the atomic unit of the web.” Do you see anyone who is trying to change that? With mass adoption of ipv6 looming around the corner, generic TLDs coming, we know that the total of links on the web are not slowing down.

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  10. Malcolm Klock Friday, July 13, 2012

    This is a really great article Om, this is exactly the way I feel about what happened at Digg. I think Rose and co really did something amazing there, and even if it didn’t work out, it was such a ridiculous breeding ground of talent (I look at someone like Brian Wong, could he have started anywhere else?). I also think there was a remarkable openness about Digg, what they were trying to do was totally apparent to their community, and to everyone who worked there. I don’t think we can give Rose enough credit for that, because in a weird way he had a perfect training for what he had to do: reach a lot of people, and get them to pay attention, and “get it.” The fun-loving workaholic atmosphere of Digg at the time has helped shine a light on the joy of creating new stuff and trying to push a medium forward.

    Rose is still doing that with his founder interview series FOUNDATION, which feels like it should be a million dollar masterclass in chill world domination.

    The kid did good.

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  11. I agree with the article on many levels. But the most important point I want to emphasize on is that when it comes to failure, the ‘talent’ that a company acquired and nurtured will far surpass any other asset, even for the VCs/investors that invested in it because that talent will go on to create more startups and will probably end up being supported by the same VCs, and may eventually yield a higher ROI than the failed investment. If I’m correct, I saw the same pattern for the startups mentioned in this article, in terms of investing in ex-talent.

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  12. Lets not forget the Digg effect. I know hundreds of blogs experiencing outage when their post lands up on Digg homepage. I always remember Digg because of this.

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  13. Tom Desrosier Saturday, July 14, 2012

    I dont know about the financial part – I do know that I visit digg.com more than twice daily – and so do many of you. A website that commands that kind of traffic is, to me, not done.

    Tom
    http://www.grootz.com

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  14. Hate to break it to you, but digg could be created in six months by two developers. It was hardly revolutionary and was modeled after Slashdot.

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  15. DIGG did change things on some scale. I liked some of the site, but it killed itself. The community killed itself. Rose knows this. He couldnt tame his own beast.

    DIGG was a news hack at best. Not social media.

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  16. Om, Great perspective! It is right to measure the impact, not the dollars. At Napster we changed the world too, but didn’t make any money. I wouldn’t trade the Napster experience for any money. We learned a lot, had fun, changed the world, and paved the way for iTunes. I don’t think iTunes could have happened without Napster shaking up the industry.

    Digg people went on to start, and contribute to, lots of startups. Same thing at Napster, AltaVista, and many companies that didn’t succeed financially.

    Om, thanks for reminding us there is more to life than dollars.

    Don Dodge

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    1. Hi Don

      Thanks for sharing your perspective from your time at Napster.

      Share
  17. Almost 10 years ago… interesting to reflect upon:

    Especially when looking at the 10 year performance of $EQIX

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  18. Kelsey Winkler Saturday, July 14, 2012

    Now that Diggs ship has sailed, here are a few alternatives:

    Boxnutt (http://www.boxnutt.com) – Boxnutt is a place to discover what’s new and popular on the web.
    Reddit (http://www.reddit.com) – the front page of the internet.

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  19. the spin machine has started to work.. “it’s wasn’t a failure – they were visionary?
    how much bs can kevin rose feed the valley?

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    1. it seems om is a part of it no. they distributed his show right …

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  20. Hallowed, not haloed.

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  21. too many liberals. digg could have been a clone for democraticunderground and dailykos

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  22. yada yada yada …yawn ;)

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  23. Why does Digg get a free pass? The valley is vicious in tearing down once promising companies that failed to exit at their peak. Yes, Digg did a lot of things well early on and were innovative. But so was Webvan!

    Bottom line: The Digg team failed to capitalize on early success and in doing so missed their opportunity. They are no better or worse than any other start up that struck out.

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    1. I don’t think Digg got a free pass. They failed as an enterprise – very publicly and the demise was long, drawn out, torturous and painful.

      I think the point of the post was – look beyond just the $$$s and they did change things in a perceptible way. Apart from that all your criticism is justified.

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  24. Great commentary and overall look at the Digg fallout. Awesome work Om

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  25. Brent Hathaway Saturday, July 14, 2012

    I think that this article did a good job of pointing out the other monies that Digg did bring in that people forget about.

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  26. James Gardiner Sunday, July 15, 2012

    Sorry but no
    Digg was a big fail.
    And they had little excuse. Right place, right time. Based on the inner circle on CA.
    It failed because most of these start up fail. The hype of the internt and having traffic = 100 of million to billions in value is a perception that is a fallacy and cannot keep going.
    Dig failed as they missed the exit, drove into the desert and died the ugly death that follows.
    Saying they changed media and should be considered a success is rediculous.
    Media landscape was going to change anyway. Digg or the next guy. Who cares.
    At the end of the day they missed the exit.

    It was a fail.

    However Kevin has invested in some companies that have become important. That is something to be proud of. Digg.. No.

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  27. Giovanni Lee Sunday, July 15, 2012

    Kevin Rose is a boss. I was lucky enough to come across the Digg office liquidation, now my start up is working off of Digg desks. I hope some of that success rubs off. :)

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