As I mentioned in an earlier post, Chad and Steve, co-founders of YouTube, came to our Entrepreneurship & VC class. I was fortunate to have lunch with them afterwards as well. One of the questions that I asked them was:
Given that there were dozens of video sharing sites before YouTube (indeed, iFilm had seemingly "won" in the space, being acquired years before), what specifically did YouTube do that everybody else missed?*
So, I will generously paraphrase the answer, but basically they said that it came down to two big things. First, although they were a relative late-comer to the online video space, they were the first to add easy embedding of videos in other pages. This allowed them to ride the MySpace phenomenon. Second, YouTube had a highly scalable back-end, so when "viral videos" brought down other services, YouTube stayed up. It turns out that much of the success of these services is based on these viral videos, so this led to YouTube's continues success.
Of course these two major factors were in addition to thousands of "little things" that YouTube did right every day in executing their vision. However, it's instructive to think of the major factors that allowed them to win in a space crowded by so much money and talent.
* Long-term readers may have noted that this is a topic I'm generally interested in. See my post referencing Danah Boyd's thoughts on why MySpace beat Friendster.