Multi-step strategies are scary (the company has multiple points of failure that could potentially compound) . . . but that is what the web is built on. . . Google is a perfect example, so is Meebo . . . any company that tries to aggregate traffic first and figure out how to monetize that traffic later is in a multi-step strategy game. . . VC’s and entrepreneurs calls it “Vision” . . .

Anselm’s startup finally launched today (or atlease PR wise). I barely got to know the guy before he left to do it, but I did get the name of the company out of him before he left. Anyways, LaLa got alot of PR today from SFChronicle, Mercury News (Silicon Beat) , and more. . .. As with the grumpy blogosphere these days, people are quick to judge and diss on an idea . . . over at TechDirt the flames are definitely flowing. . .

So here is what I got.. . . PeerFlix for CD’s are not that big of a deal . . . its pretty cool . . . but its not gonna make Anselm rich like joining Google (go read the WSJ article) . . . bartering sites are cool too, but thats about it. . .

No, Lala is trying to be more than PeerFlix for CD (copying a bad idea is a sure way to fail ). . . the nugget is in this. . .

For the $1 it charges a user to receive a CD, La la gives 20 cents to the artist.

Why the hell would the WhiteStripes care about 20cents from Lala? they wouldnt. . . this whole peerflix thing is just an excuse/trojan horse to build a community and social network . . . on top of which they are building a bunch of recommendation algorithms (Anselm didnt spent 9 month coding the front end). THEN once they reach critical mass of users (more importantly preferrences informaton & social network data) create a record label/publication/distribution network for garage bands. . . .

Its MySpace 2.0 . . . what myspace is trying to become. . . a way for garage bands to get build a fan base, distribute music, and GET PAID!!!!. . . 20 cents is actually NOT BAD for independent bands/musicians . . . $9M raised means ~$18M pre-money . . . you dont get that valuation by pretending to be PeerFlix for CD’s. . .

Think of all the tapes and CD’s you’ve recieved at parties from random bands at random parties. . . Lala is trying to create organization and structure around that process and community. . . nothing really creates loyalty and “branding” like cool album covers. . . so physical distribution is actually pretty important. . . and ofcourse it would cost next to nothing to move to digital distribution of music for independent music and keep majors as a physical trade. . .

So yes. . . multi-step strategies are scary and hard. . . but thats how you take on goliaths as a startup. . . by being clever and out flanking the competition. . . I hate all the flaming thats going on in the blogosphere. . . lame ass people without imagination and startup experience trying to critisize the actually “do-ers” . . . anyways. . . I’m not biased at all, I havent even spoken to the Lala guys since Anselm left. . .