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Public hindsight about startups’ missteps generally comes after a good amount of “traveling in Europe with my fiancée” or whatever it is that failed CEOs do. However, Evan Williams just gave a refreshing talk about the dangers of combining money and startups at the Future of Web Apps conference in San Francisco. Not only was he candid about his time running and selling Pyra Labs, he turned a critical eye to the company where he currently serves as CEO: Odeo.
Last year Williams wrote a widely read, much-bookmarked post titled “Ten Rules for Web Startups.” “Be Narrow,” he said, “Be Tiny.” Today, he flat-out admitted “I was working on Odeo at the time I wrote that, and I was ignoring most of those rules.” Incited by excitement about podcasting and an early demo at the TED Conference leading to a front-page New York Times article (behind pay wall), Odeo got unfocused and bloated, according to Williams.
Williams went through a tidy list of the top five Odeo screw-ups:
1. “Trying to build too much” – Odeo set out to be a podcasting company with no focus beyond that.
2. “Not building for people like ourselves” – For example, Williams doesn’t podcast himself, and he says as a result the company’s web-based recording tools were too simplistic.
3. “Not adjusting fast enough” – The company thought its comprehensive web-based strategy would win out over the competition, primarily Apple, in the long term. “It turns out long term is not soon enough for a startup if you’re trying to get a foothold.”
4. “Raising too much money too early” – Williams seeded the money with $70,000 of his own money, and after the TED excitement added another $100,000. After he tied up over a million in angel funding, a term sheet came through from Charles River Ventures at three times the angel round valuation. They took the money.
5. “Not listening to my gut” – “When you’ve got a bunch of money and you’ve hired a lot of people and you’re talking to your board and you’re talking to reporters, your gut can get drowned out.”
The interesting part is Odeo still exists, and Williams is still CEO. So what’s he doing to fix these mistakes? Not refunding the VCs their investment, that’s for sure. And not even trying to earn revenue; Williams freely admitted Odeo hasn’t yet settled on a business model.
However, the company did downsize, dropping a couple managers from a high of 14 employees. Its target audience is now people who listen to podcasts, especially on the web, something Williams actually does himself. Odeo still isn’t singularly focused – Williams’ list of products at the opening of his presentation was daunting – but projects like the mobile social app Twitter are isolated to a full-time team of two.
All in all, we can’t say we came out of the presentations convinced Odeo is set to conquer the universe, but Williams’ honesty and humility are admirable. The best part is, his advice has a chance of making an impact while it’s still relevant to today’s startups.