I came across a feature in Facebook this morning called Instant Personalization. It’s pretty close in concept to a project I worked on a while back called matchmine. After a pivot and some decent progress, we ended up shutting matchmine down as the depth of the credit crisis came into full focus. It’s hardly my only failure, but it still feels like the biggest.

At some level matchmine and Instant Personalization are worlds apart. matchmine grew out of enabling science inside the Kraft Group, with some very interesting predictive value. We found a business model in applying what we learned about user preferences to more effectively target advertising, and we making pretty good progress looking for partners to embrace the platform when we shut the business down. The engine of Instant Personalization is obviously facebook’s omnipresence and near ownership of the social graph. It’s pretty light in terms of predictive science, relying more on preferences derived from your connections. I expect they’ll incorporate some kind of basic collaborative filtering algorithm at some point, but who knows.

Still, the two models have more in common than not. Both are about storing your preferences in a third-party, cloud-based system that enables you to leverage them across the web. Both make it easy for users to get more of what they’re interested in across the web, and both monetize that service through an ad-targeting business model.

It’s a common story. How different, really, were the iPhone and its MP3-player predecessors? How different was the original Palm Pilot from the Newton? Or Facebook from MySpace, for that matter?

Startup success and failure often boils down to differences at the margins… in strategy, product, execution, people, timing, etc. A 10% difference in any one of those areas can lead to an alternate binary outcome, a 100% difference for management and investors. That’s a pretty cruel equation.

So what does that mean for entrepreneurs? I think it means that startup success is rarely the result of your initial, inherently high-level vision for what an opportunity might look like. Finding the 10% that makes the difference between success and failure comes later, as your vision evolves through contact with the outside world.

What do you think?