In February, online video startup Revver, which had raised just under $13m in venture capital funding,
for an amount reportedly in the “low single digit millions”.
It had previously been shopping itself for a rumored $300,000 to $500,000.
The latest VC-backed Web 2.0 startup to seek a fire sale didn’t get as lucky as Revver.
PodTech, a startup that initially hoped to become the “NPR of podcasting” and eventually moved on to video focused on the technology industry, has been sold to communications technology firm ViewPartner for “less than half a million dollars” according to VentureBeat.
PodTech is a particularly interesting case study because of the people involved with the company over the course of its short history.
Run by well-connected Silicon Valley entrepreneur John Furrier, the company was quick to recruit some big names in social media.
When Owyang announced that he had joined PodTech in November 2006, he was very excited:
“A few weeks ago, I was chatting with John Furrier (Podtech CEO and Business Podcasting early adopter) about how it was interesting the direction that Podtech was headed being a place where news is breaking.
“With great pride, I’m happy to announce that later this month, I’ll be starting a new role at Podtech as Director of Corporate Media Strategy.
“I’m hoping I can be a community resource to companies that want not only to understand ‘What’ and ‘Why’ to use social media but to help answer ‘HOW’ to deploy.”
Unfortunately, while Owyang and other members of the Web 2.0 community had high hopes for PodTech, it didn’t take long to see that it was headed somewhere – but not quite where believers thought.
Less than a year later after he joined PodTech, Owyang left for greener pastures at Forrester Research.
Robert Scoble, however, was still around. When Fake Steve Jobs reported that PodTech was shutting its doors in October 2007, Robert Scoble rushed to defend the company:
“It’s amazing. A fake blogger, Fake Steve Jobs, reports that PodTech is closing down. This is total, 100% bull####. Not even deserving of a response. I’m not leaving PodTech. When, er if, I am you’ll read it here on my blog.”
“There are more than 30 people working at PodTech and I only bring in a small percentage of revenues (and my show is highly profitable).”
Apparently not profitable enough.
Of course, hindsight is 20-20 and it would be unfair of me to rub too much salt in the wounds of PodTech and the people who were involved with it.
But I can’t help but think that for all of the social media “stars” who were involved with the company, its failure casts doubt on the hype they promulgate.
While most new businesses fail (and there’s nothing to be ashamed of when you take a risk in starting one), I find it interesting that some of social media’s biggest proponents apparently couldn’t do enough to get a Web 2.0 startup of their own to work.
After all, Owyang and Scoble essentially earn their paychecks by informing and advising others about Web 2.0. As proponents of social media, they frequently extol the virtues of Web 2.0 tools and often tell companies that involvement with social media is a prerequisite in today’s market.
The collapse of PodTech and the almost complete “vaporization” of the $7.5m it had raised from investors, in my opinion, does serve as a partial reflection on them.
I respect that they were not top-level PodTech executives and that the intimate details about PodTech’s operations are known only to those who were involved with the company’s operations.
But I feel that a fair criticism is to note that very few of Web 2.0’s most ardent proponents have actually started a highly-successful (read: highly-profitable) Web 2.0 business of their own.
In this case, PodTech seems like it provided the perfect opportunity for Owyang and Scoble and I’d be surprised if they both didn’t have some ownership (i.e. stock options).
At the end of the day, I suppose I’m simply hoping that one day we’ll find a member of the Social Media Hype Club who can boast:
“I started a self-sustaining company based on Web 2.0 and social media that makes me millions in profits each year.“
If that ever happens, I just might take the conversation seriously. As it stands now, PodTech’s ability to take $7.5mn and turn it into $500,000 is yet another example that in Web 2.0, alchemy is all about taking gold and turning it into lead.
For PodTech’s investors, the lesson is quite clear – if you want to make a small fortune in Web 2.0, you have to start with a larger fortune.