At least, that's my philosophy when it comes to web startups.
Obviously, a lot of this stuff is not free, but from a competitive perspective ideas and development are, indeed, free. In other words, you can't assume that coming up with a good idea, then paying someone to build it will bring success.
For real success in a web startup, the idea must be a "good" one, and it must have the proper execution and strategy behind it - specifically to create organic growth.
This all seems kind of vague, so I'll give an example to illustrate my point:
A few people I know recently started an online startup, which we'll call "FiveSquare."
I turned down the offer to help develop their site a long time ago, but I've since kept tabs on their progress.
Over a few years, they have been through several iterations.
At first, they started out with a full-blown implementation of their idea. They sponsored a fancy launch party at a bar with drinks and t-shirts and the whole package. The site launched and... nothing happened. Despite all the excited potential-users at the launch party, nobody used it.
Why? In this case, it was because the site didn't offer the user any immediate gratification. Being a new site, it hadn't yet reached any large amount of users, so critical mass was nonexistent (a barrier that would have existed regardless). Furthermore, users had to pay money in order to receive the full functionality of the site - hard to get people to do when the functionality depends on a large user base.
Even if the site were free, they would have had a lot of difficulty to get people to actually use it because it didn't really offer any immediate gratification.
The fully-developed site sat for several months with almost no content or users while the founders attempted to market it. Visiting it felt like walking into an empty grocery store.
The founders had developed and launched a site, but had failed to create or implement a plan to create organic growth.
Let's contrast this example with something more obvious and ubiquitous (perhaps even trite): Facebook.
Facebook didn't require launch parties or extensive marketing efforts to become a success. Rather, the founders strategically launched it in a way the caused people to want to use it - very little convincing required.
That's called organic growth, and it's one of the reasons why Facebook has achieved its success.
Successful web startups need to reach a point of organic growth to be successful. The sooner a startup can reach organic growth, the better - any time in between is money and time burned.
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