There has been news about Finnish startup Fruugo having to lay off significant portion of their work force because of financial problems. Fruugo is a high profile startup (at least in the Finland startup scene) that has some of the biggest names of Finland tech industry on its board, like Risto Siilasmaa and Jorma Ollila. The figures are also big for a web startup, it is rumored they’ve burned through €40 million so far. Basically I think they’ve hoped to strike it big in the e-commerce, but tens of millions for a web site that already has competitors like Amazon (they also allow e-commerce sellers to list their products on their site) sounds like a huge gamble. Frankly, the site looks quite plain, and does not have the features to draw users to do their product research and shopping on it.

Arcticstartup blog also covered Fruugo situation in their post. Jugding from the comments, many people see lack of advertising as a problem, because outside of tech news, Fruugo hasn’t really made itself visible atleast in Finland. They don’t have the user base to bring in nearly enough cash flow. How to lure customers is a complicated business, and I can’t really say what they should’ve done to succeed in it.

My gut reaction however is that trying something of this magnitude, when the competition is already well established in Europe and elsewhere, is very risky, almost suicidal. Their approach to being a general store for everything sold on web sounds like a huge undertaking, and I propably would’ve done it on smaller scale first: Build a more concentrated site with one or two product categories, see if you can make it appealing enough for sellers to have their product listed on the site and for buyers to use it to find what they’re looking for. Perhaps also strike a deal with some site with product reviews, so you have more content and can genuinely help people with their decisions.

I have a feeling, that building it big and getting it right on the first time just doesn’t work in web applications. The factors that contribute to one’s success are numerous and sometimes it’s just pure luck. Build something, see if it sticks and iterate from there sounds more like a business plan, where risks can be reduced to more manageable level.

Techcrunch has an excellent video about Mint CEO Aaron Patzer giving a presentation about starting a new web business. Mint is a web based financial management service available in the United States. The company was recently sold for $170 million! I found it highly interesting, especially the parts, where he gives practical dollar figures to give you an idea of web startup costs. There’s also slides of the speech available in the same page.

I discovered in December, that my Gmail accounts (two of them) had been hacked. All mails sent to those accounts were actually forwarded to another (the hacker’s) email account. I only realized this after a few weeks or so, because emails in those accounts are normally redirected to my another email.

As always, there’s something to be learned here. I suspect the accounts got hacked, because I was logged in on those accounts in a browser tab, while browsing other web sites in another tab. This led them vulnerable to XSS, or Cross Site Scripting. Some malicious web site had a script, that automatically upon my entering tried to post form data to the Gmail account settings page, and make the necessary changes. There’s documented attacks on the large, so this is a serious problem.

I suspect Gmail and every other web based email is always going to be vulnerable to them no matter what they do. New vulnerabilities and exploits on them are constantly discovered. When they are patched, new ones appear later. It’s a cat-and-mouse game. That’s something to think about for everyone, who (like me) use Gmail for work and have sensitive information on them.

How to limit your exposure then? One solution is to logout immediately after you finished reading your emails and continue to browse other web sites. This is not always feasible, and sometimes you just forget it.

I came up with another solution for this problem. Dedicate a browser for email access only. In case of Gmail, you can take for example Chrome browser and use it to only access Gmail/Hotmail/your-email-of-choice, thereby substantially limiting your exposure to XSS attacks. Use something else, like Firefox, for day to day browsing.

I’ve always admired the ability of US media to be able to so effectively brand news and phenomenons. Even more ingenious is the use of acronyms. It strikes to the public creating a handy way to refer a complex subject by a short name. Think about PC, WWW, CD, or initials from recent news, 9/11 and Y2K. I’m impressed by the way the American culture uses these to grab the ‘bull by the horns’, so to speak. It’s simplifying but useful!

Language has the power to influence the peoples thinking and ultimately the public opinion. Branding is so important, the many times the company’s most valuable asset is the brand it owns.

Now, news people over the Atlantic are thinking of a fitting name for the current economic downturn. Financial Crisis, Credit Crisis and others are used, but they are too generic to distinguish the current events from history. I’m sure they come up with something that has staying power.