Don’t skip the start! There is a Plan B.
October 26, 2006
Pascal said that things are always best at the beginning. I suspect he was referring to math problems, but I think it works for startups. Raising venture capital at the VERY start is like skipping high school and going directly to college. You get done quicker, but miss some of the most important learning.
Okay, so you drank the koolaid and raised capital from the best VC in town, but realized very quickly that you made a mistake. Which would you choose? Plan A: just keep trying to make it work (i.e. the never give up plan) or Plan B: buyout your VC and start building something great (i.e. the I am done with you guys plan).
If you are Ev Williams, the founder and CEO of Odeo (according to Valleywag), you choose Plan B. Ev is buying back the shares his investors (Charles River Ventures) bought when they funded Odeo. It helps that he sold his previous startup to Google (Blogger). Ev figured out that Odeo wasn’t figured out when iTunes launched their podcast directory in November 2005. He was in a pickle, but he was stuck with his venerable VC partner (for almost a year!). He didn’t take his own advice in a blog post he titled, “Ten Rules for Web Startups”. I wrote about it in a post titled “Be Narrow, Be Tiny”: Don’t Raise Money!!” ~ at least at the start…
So what is next? Ev has announced that his new company, Obvious Corp., will acquire the assets of Odeo and Twitter. Ev explains,
Obvious has purchased all the assets of Odeo, Inc.—including odeo.com and twitter.com from the investors and other shareholders and will continue to run these services. Obvious is fully funded by me and, eventually, will create other things, as well.
