@augustus -- I encourage you to "dig" a little deeper. socialmedian = social news meets the social graph. Very different from Digg, although our roots are from their foundation. What we're trying to do here is personalized news at the topical level -- more about "me" informed by "we" vs. just a popularity contest. Poke around and would love your feedback.
You are currently forcing people to create an account to see anything besides the Digg-like front page. I recommend you let people explore around before forcing them to sign in. If you really do have something that's different than Digg, you have to let potential users see it.
with 12 people $40k/month total burn is like paying each person around $30k/year annual salary when you factor in other expenses like equipment, telecom, travel, etc. So yeah, that's pretty tight.
There certainly are a lot of digg clones nowadays. I wonder if it will be like search where everyone thinks it's a crowded market for a solved problem and then someone with an actually intelligent algorithm comes along and mops up.
I think it's more than an algorithm problem: initially with a site like that, it's all about getting more people, because without them, the site is worth nothing. Then, all of a sudden, poof, you succeed, but you get a bunch of flaming morons, and the quality goes down the tubes. Maybe you're in a position to make some money, but I wouldn't consider something like reddit or digg an unqualified 'success' in terms of making the world a better place.
@Michael -- give it another whirl. We've gone a lot past the initial alpha features. Our repeat usage is very high right now -- about 30% of users returning daily.
