What Entrepreneurs Can Learn From Cuil, The World’s Biggest Search Engine (Launch Flop)

Exactly, two weeks ago, Cuil the self-proclaimed “World’s Biggest Search Engine’ went live amidst great fanfare that almost matched a papal visit and within 24 hours it was the subject of great attention all over the world wide web.

Cuil had all the ingredients to become an instant hit:

Credible founders:

Tom Costello, the CEO, was a researcher at Stanford and later joined IBM to eventually become a member of IBM’s strategy team for Storage Systems Strategy worldwide.

Anna Patterson, the president, has a PhD in Computer Science from the University of Illinois at Urbana-Champaign, and was a Research Scientist at Stanford University. She also held senior positions at Google.

Russell Power, the VP of Engineering, “attended the University of Washington and is on leave there as a PhD candidate in computer science” and also served at Google.

With such founders, it was obvious to everyone that Cuil was a product developed by the best of the best.

A big and lucrative market:

Some entrepreneurs find themselves launching their concept in non-existent markets. They then face the tasks of creating the market and creating their brands. Cuil found itself in a big market that still growing and in which winning companies are racking in millions.

This market is not near its maturity yet meaning that there may be room for many players.

Deep Pockets:

Unlike most entrepreneurs Tom Costello, Anna Patterson, Russell Power did not launch their baby on a shoe-string budget but with a cool $33 million from also credible investors such as Greylock Partners (Madrone Capital Partners and Tugboat Ventures being the others).

When an entrepreneurs starts off a venture with money being the least of her or his short-term concern it increases the odds of success.

When you also have business backers who invested in other famous start-ups such as Facebook and Linkedin, you know that they consider you a surefire winner.

Publicity:

Two Mondays ago, the Wall Street Journal, the New York Times, USA Today, the Chicago Tribune, Business Week, Techcrunch, GigaOm, Mashable and even I (a nobody) wrote about this new start-up.

Let’s not even mention, other newspapers, blogs, TV news reports and social media sites. An entrepreneur’s dream if you asked for my humble opinion!

In recent years, I have not seen an Internet company launch out of the blue and get so much publicity in one shot. The PR people at Cuil certainly know how to play the game and pulled off an extraordinary coup. Heck, someone even asked publicly: How Did Cuil Get So Much Publicity on Day 1?”

But where did entrepreneurs Tom Costello, Anna Patterson, Russell Power who founded Cuil go wrong?

How come that the keys to new start-up success backfired?

Cuil provides a unique opportunity to address the importance of strategy to eary-stage entrepreneurs and how a company can fail from the start with a flawed game plan.

Cuil’s New Coke Strategy

At least Cuil’s founders should be commended for having a strategy. Most entrepreneurs launch their concept with no strategy whatsoever. However, having a start-up strategy is one issue, having a strong one is a whole other debate.

Essentially, Cuil pulled off a New Coke Strategy which in simple terms could be explained as fixing something that’s not broken without anyone asking for it.

“Cuil’s goal is to solve the two great problems of search: how to index the whole Internet—not just part of it—and how to analyze and sort out its pages so you get relevant results.“, says the company’s about page.

Put differently, Cuil’s premise was that normal search was broken and needed fixing. And since Google dominates the search market, it became the obvious target. Cuil’s strategy was to do the search job better.

If it ain’t broke, don’t fix it especially no one asked

The answer to the question “How to sell anything to anyone” is a simple “Make something people want to buy.”

People do not find anything wrong with Google search. The complaints of them not being able to find something they’re searching for are in the absolute minority. Furthermore, if you really want to claim that you can do a better job, do actually deliver on the promise!

Most people typed in their names in Cuil’s search bar and everything but their personal sites popped up. They tried other keywords and the results were not even OK, they were lousy! In three quick search attempts, they discarded Cuil. The problem is that such people were mostly industry luminaries who would have given Cuil, the seal of approval, legitimizing their claim and strategy.

How strength became a major weakness

Remember the perfect launch-recipe that Cuil had? With the flawed New Coke Strategy this launch actually turned into a dud. In other words, all the credibility of the entrepreneurs/founders, all the money and the publicity turned into a major liability.

At the end of the day, Cuil received that much publicity because the founders are big guns and so are its investors. But the press was not impressed with the concept (hence the strategy) and actually did more harm than good by calling it a non-Google killer. In other words, they told the general public “Move along folks! Nothing to see here!”.

Two weeks later and the news on Cuil are still not good. With the perceived poor search results, downtimes, the situation did not certainly help.

Cuil can certainly hang in there and hope that the opinions will change. From experience, they will not as the battle it faces is tough: 1) Actually turning its service into an acceptable service and convincing the public of such 2) Actually turning into a viable search contender.

Some people wondered if Cuil was not a project meant to become popular as fast possible and at its height be sold to a true Google competitor such as Microsoft. That may be true and is not a bad idea. But at the end of the day, buyers are not dumb and will never buy a lemon.

Anyone tempted to buy or invest in Cuil further can save himself or herself great money soliciting due diligence professional services and simply conduct a Cuil search on anything and then a Google search on Cuil. The pages that come up will make up his or her mind.

Early-stage entrepreneurs be warned! No matter amount of founder credentials, start-up capital, publicity and other resources will work against a flawed strategy. Cuil will go down in history as being a cool $33 million experiment.

A future article will look into what Cuil entrepreneurs should do now (if anything!) to save face and their company. Subscribe to the RSS to be the first to read all about it!