I don't know what all the fuss is/was about, but in terms of affiliate marketing money, that's not a large amount of revenue for one solo affiliate, let alone a whole company...
There are too many snakeoil salespeople that talk authoritatively on subjects, but don't actually have success to back them up. Referly definitely seems like someone in this category.
It was all over TC and other publications. One would assume that would correlate to more success, but I guess that would be a false assumption.
If you get a lot of press coverage, it probably means you are a good hustler and marketer, which is pretty vital to your success. If the market is bad, switch markets. Kudos to Danielle & Kevin.
They pivoted because their business model did not make the money they wanted to make. No one could have predicted it. They took the dive, and saw what there really was. Nothing wrong with that.
But sticking with something past the point where it's clearly failed is where the opportunity cost argument comes in. If they'd stuck with refer.ly for an extra year after it was clearly doomed just because they had nothing better to do, that would be wasting opportunity. Pivoting into something more interesting, either with a new business or the same corporation, is the best thing to do.
A team which could easily do a bunch of other cool stuff clearly has higher inherent opportunity cost than a team fresh out of college without a lot of ideas. This is kind of why medical startups often suck, because you do need to involve MDs, and MDs have a $250k+/yr job practicing medicine (with high social status as well) as their best alternative -- so anything short of a potential big win isn't worth it for them.
- Sometimes is very hard to measure how far off you are. Being in the game skews your whole perspective. Experienced or not (sadly).
- The could is what my argument is against. Everyone has opportunities. Measuring them by what could happen is a bit naive. You analyze the situation and chose that which conforms to your current needs. There might be other opportunities, but they were not as reasonable for those who had to make them option. It is rather simple for an outsider to argue the point. It is the team member the one who has to live with the decision. I don't think they lost at all. They were part of a YC startup, made connections, and ultimately can profit from the whole experience.