The (One-Sided) Anatomy Of A Startup Failure
PodTech.net had a lot of buzz around it primarily because blogger Robert Scoble left the sturdy walls of Microsoft to be a part of it. There were others with nice pedigrees, too, and $7.5 million in VC funding spelled sure success.
It must not have spelled it in English, though. This week, PodTech sold to ViewPartner, a company that doesn’t even seem to have a website, for under $500,000, or enough to purchase a one-bedroom condo in San Francisco.
How does that happen? you want to know. Everybody wants to know, which is why this FriendFeed thread has been highly viewed. Scoble’s been on hand giving lots of nonspecific insight as the rest await former PodTech CEO John Furrier to blog his side of things. One thing’s clear from Scoble’s posting: he definitely thinks it’s the leadership’s fault.
But that’s an easy bet, right?
There had been definite signs of trouble for PodTech over the past year. Transparency has its benefits, but sometimes that window into the company is actually a hole in a leaky boat. Besides few people being really clear about what, exactly, PodTech was about—video, it appears, long form, and technology, and Scoble’s there, making videos too long to watch right now. . .—a strange tweet in the steam of August 2007 rang alarm bells loud enough to be temporarily noticeable.
It could be, the blogosphere took it the wrong way. Chuck Olsen’s now blogospherically infamous tweet read this way:
Just got off the phone with Furrier – it’s a shitbag salad over there… Scoble’s out
For a solid weekend, bloggers dined on that, erm, shitbag salad, digesting it as Scoble’s termination or resignation, both of which he denied, before taking a small blogging hiatus. Then Furrier was forced out by the board, Scoble really did leave four months later, and so had everybody else anybody’d ever heard of.
Eventually, you just stopped hearing of PodTech altogether. That salad Olsen mentioned now appears to have had more ingredients than Furrier and Scoble. According to Scoble, there were lots of problems, including revenue, collective vision, and utilizing talent.
Scoble, from FriendFeed:
". . .almost all of the talent left. What’s left now is not much that’s worth much. The revenues came because of our social media leadership. That’s what Furrier really had in his hands. Owyang. Me. Cunningham. Jones. Gillmor. The rest of the stuff was a pipe dream that didn’t lead anywhere, which is really why the company burned through $7 million (plus several million in revenues)."
Other revealing comments suggest Scoble didn’t see eye-to-eye with (other) leadership, perhaps even with Furrier, though he refuses to give specifics and burn his bridges (probably a smart move). In a nutshell, he advised any startup-minded person watching this saga to have certain ducks in a row (paraphrased below), we’ll call them the Seven Habits of Highly Effective Startups:
- Revenue is pretty important. (For any old-schooler, that might seem obvious, but success stories like YouTube and Facebook have belied this age-old business tenet.)
- The ones who bring in the money, should be the ones in charge.
- Have a vision. Make sure everybody in the company shares that vision.
- When it comes to firing idiots, there’s no time like the present.
- You need good metrics/measurements to improve.
- Listen to your star players.
- Don’t fire a CEO without having a good replacement.
Furrier weighed in on the FriendFeed thread with a promise to blog more about what exactly happened with PodTech, and also took the time to note Scoble’s assessment may not match his own.
"There are many lessons," said Furrier. "Scoble’s view is from his perspective but there is a big picture that goes way beyond Scoble’s view and that has to do with building a company from a zero stage. I’ve moved on from a year ago after I was forced out by the board. We made some mistakes but directionally correct. Sure if I had a mulligan things might be different but a business strategy, financing strategy, and team strategy are part of the story."
And now, we wait to find out more. Sometimes there are better lessons in failure than in success.