Pair a unique insight with a compelling “why now”: The idea for YouTube built on several underlying trends: photo sharing sites like Flickr had become popular, broadband internet was just coming online, digital cameras with video capabilities were becoming widespread. They also had unique insights: Flash could render videos in a browser despite the device or codec used to create the file; nascent cloud hosting made it possible to deliver video cost-effectively.  


Embrace the constraints of the “lean startup” mindset: Being small helped the early team move quickly as they cycled through rapid product iterations and network infrastructure experiments to scale the site.

The power of the hacker ethos: The team utilized a patchwork of nascent cloud hosting providers to offload their hosting costs. While ultimately unsustainable, this brilliant, first-of-its-kind move gave them initial scale on a shoestring budget. 



Network effects need a flywheel: YouTube became one of the most powerful network effect products ever built. But when the team first launched the product in 2005, no one noticed. Even YouTube needed a way to get their network effect flywheel spinning. Embedding videos on MySpace pages was the initial nudge sent the flywheel into perpetual motion.



Innovating on legal precedent is a painful road: A startup can innovate along many dimensions: product innovation, distribution innovation, business model innovation, etc. The YouTube team learned that innovating on legal precedent is painful. Ultimately the courts vindicated their copyright claim, but not before the legal pressure on the company forced a sale to Google, which would subsequently spend years fighting the case.



Look for deep synergy in an acquisition: Google’s acquisition of YouTube has become the canonical example of a win-win acquisition. The founders chose Google as an acquirer because of the synergy between their product and Google’s mission to organize the world’s information, but also because of Google’s commitment to maintaining YouTube as a brand. Today YouTube accounts for a significant portion of Google’s revenue, and founder Steve Chen says selling to Google is the “best thing” that could have happened to YouTube.