In what has to mark as a disappointing end to a company with a lot of promise, I learned that
PodTech, the tech media company which publishes online and downloadable videos about new technology and at one point featured video bloggers like Robert Scoble and Irina Slutsky, and raised $7.5 million in 2006,
sold for just $500,000.
That's right.
The main reason was a difference between the managers in determining where the company should place it's focus. Plus, it was losing the original talent. CEO John Furrier left the company last year. Robert Scoble
gave this take at Friend Feed with a chime in by Furrier and others...:
I'm cool with telling the story. I just need a couple of glasses and wine and a lot of time to tell it first. Podtech was screwed up by a number of decisions. Everyone played a part, but I sure learned a lot about how a company can screw up big time. Major learnings for me? 1. Have a story. 2. Have everyone on board with that story. 3. If anyone goes off of that story, make sure they get on board immediately or fire them. PodTech did none of the three and I'm sorry for my part in not making the three happen - Robert Scoble
That's the cool thing about you, Scoble...you're human and admit it too! - Sean McGee
Not all ventures succeed though. How many 'fail' for those that succeed? It pays to take a pragmatic view. I think it's a hot market, and the impetus to succeed is high, eventually some will break - Mo Kargas
Other things I learned: 1. Make sure people are judged by the revenues they bring in. Those that bring in revenues should get to run the place. People who don't bring in revenues should get fewer and fewer responsibilities, not more and more. 2. Work ONLY for a leader who will make the tough decisions (see above). 3. Build a place where excellence is expected, allowed, and is enabled. 4. Fire idiots quickly (didn't happen at PodTech -- even if you count me as one of the idiots). - Robert Scoble
We get so much coverage of companies when they launch, when they're growing, etc. I'm hoping that someone writes an in-depth piece on what went wrong at PodTech so that entrepreneurs can learn from this. There is so much that you can learn from failures. - Mike Doeff
Other things I learned: 1. if your engineering team can't give a media team good measurements, the entire company is in trouble. Only things that are measured ever get improved. 2. When your stars aren't listened to the company is in trouble. 3. When your stars start leaving (Gillmor and Owyang left before I did) the company is in trouble. 4. Getting rid of the CEO, even if it's all his fault, won't help unless you replace him/her with someone who is visionary and who can fix #1,2,3. - Robert Scoble
Mike: I'm not going to be the one who writes that. Much of the worst stuff is too personal. Failures of companies often happen around failures at the leadership level. Telling why things failed means telling off investors, executives, and others (and even me). Not likely to happen because that'd mean burning bridges and I'm just not willing to do that. These people have too many friends. :-) - Robert Scoble
My vote is for assimilation into something bigger. They bought it to "right the wrongs" and flip it to someone else. Heck, at 500k, it's a bargain right now...IF things are cleaned up. - Bradley McSpinn
Brad: 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). - Robert Scoble
I am going to write an in depth post on this story. It's huge. There are many lessons. 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.. - John Furrier
john: I am looking forward to your post. - Robert Scoble
There are many lessons to learn that I'll post about. PodTech had a great chance and pioneered some of the best practices in social media. One thing that I'll talk about is the difference between self financed growth strategies and venture backed growth strategies. - John Furrier
Looking forward to your posts John. - Thomas Hawk
I'm looking at this from way on the outside. The value of my perspective is that I know nothing about internal management, visions, discussions, factions, or what have you. All I can say is that from afar, I never got any brand coherence from PodTech. Was it news? paid corporate marketing videos? analysis? community? There were some powerful personal brands--I still follow them in the PodTech diaspora--but it felt they never cohered into a PodTech identity. (That doesn't mean losing personal identity.) - Michael Markman
Michael: exactly. We never played together as a team. It is why entrepreneurs need different skills after they start their companies. It is not enough to sell people on a dream. You must coach your way to it too. - Robert Scoble
What's interesting to me and the sign of a real problem is to have $7.5 million and burn through it, then wind up with a company worth just $500K.
With all this, there are some who think
Podcasting is failing,
but there are many signs this is not true, including the success of shows like "Ask A Ninja" which pulls in money from sponsorship.
But overall, my personal feeling is that people are lazy and don't want to download anything if they don't have to. That's why I focused on online browser-based sim games like the
Oakland Baseball Simworld, rather than downloadable ones.
In the end, it's eyeballs and not downloads that matter and pay, too.
