I don't have the source, but I read that having VC cash to burn was partly responsible for YouTube's success. They did things like iPod giveaways and hired tons of designers to quickly iterate on the site.

They had many competitors that were earlier to market, but ultimately lost out to YouTube.

Edit: here's the source[0]:

> Youtube acquired traction over it's competitors by their funding strategy, product strategy (growth rate) and a liberal interpretation of the DMCA. As illustrated and extensively researched by Mr Jaffari,, YouTube tried many tactics to gain differentiation over it's competitors. In the end, YouTube's growth hack was the only metric that mattered, conversion of viral buzz into users.

> When YouTube debuted it was already late to the party with numerous competitors growing quickly. The company copied and experimented with the interfaces of it's rivals to establish a baseline. Then they applied liberal amounts of Venture Capital to organize a star development team that would iterate product faster than it's rivals. Finally they adhered very loosely to the DMCA laws leveraging primarily copyrighted content to build viewership against more generally viewable Flash player technology.

…

> The first and largest strategic advantage for YouTube was their investors, Sequoia Capital. Other Start-Ups were already in this space with more traffic, but with a major investment the sector had validity. This created coveted Bay Area buzz, while larger more established start-ups were largely ignored being outside of the echo chamber. For example VideoEgg.com (Who chose to move to the bay), Break.com (Then Big-Boys.com), Revver.com (Also LA Based), StupidVideos.com and Vidiac.com/StreetFire.net (Atlanta Based).

> On top of the buzz Youtube leveraged VC investment to land a major blow to it's rivals. They went Ad-Free. It took YouTube over 12 months to pass Vidiac's traffic but with an interface clean of ads and a cost no object design team, YouTube's competitors could not iterate on designs quick enough. The development staff would see a feature on other sites, copy it, improve it, release it. An example of this behavior is the Flash embed video players that could be placed in MySpace that was already being employed by other services. Youtube let their competitors figure out the hard problems such as UX flow, user requirements, feasibility, copied it and spent more. With better funding of development, servers, bandwidth Youtube offered their users better site performance and quicker adoption of technology. For example an early metric of success was the acquisition of content contributors. Expensive encoding solutions could process an uploaded video into a streamable format but sometimes this process could take hours and the users had to wait for their video to be ready. YouTube could buy more encoders and cut this time down to 15 minutes offering bloggers quicker video to market times. Using Flash over QuickTime and Windows Media, embed code was more universally able to deliver a consistent if inferior video experience. Inferior until the delivery of Flash 8 when the On2 CODEC was introduced giving Flash full screen and high quality videos.

0. https://www.quora.com/How-did-YouTube-gain-its-initial-tract...