Quasi-Death of a Web 2.0 Play
As the world moves merrily along towards roughly Web 2.26beta (by my calculations), we are seeing the beginning (I think) of the thinning of the ranks with existing Web 2.0 plays. I received an email the other day from the folks at Fruitcast. Fruitcast is/was a play that catered to providing integrated audio ads for podcasters. In the email, they outlined the reasons why the service was being shut down, albeit allegedly temporarily.
I want to point out a couple of things on this front, though.
First and foremost, I want to point out that this isn’t a knock on Fruitcast, or their team. It seemed like a great service (I even used it myself.) However, I am always of the belief that if you can learn something from the failures of others, the better. If I’m gonna fail, I’d rather fail by committing my own, unique, blunderous errors, rather than falling prey to “common pitfalls.”
Next, I want to talk about the “seven P’s”. You may remember the “4 P’s” from your Marketing 101 class in college (Product, Price, Place, Promotion). Well, the “seven P’s” of which I speak are not related to those “4 P’s” from Marketing 101. They are different.
What are the “seven P’s”? With a nod to Dick Marcincko, former U.S. Navy SEAL, who introduced me to the phrase years ago:
Proper Prior Planning Prevents Piss Poor Performance.
Web 2.0 startups are notoriously easy to start these days. They are not necessarily capital intensive businesses. However, just because it is becoming increasingly easy for two guys in a garage to launch an earth-shattering new venture, doesn’t mean that the concepts of business management go by the wayside. Being successful in business requires planning – period.
Fruitcast clearly did not secure enough capital and resources to move their plan forward. I am also reminded of the quote from German Field Marshall Helmuth von Moltke:
Kein Plan überlebt Kontakt mit dem Feind.
Or better known in English as:
No plan survives first contact with the enemy.
The plan Fruitcast had, if they had one at all, clearly didn’t hold up. Additionally, even the best-laid plans have to adapt to the everchanging landscape of the “battlefield” – be it in business or warfare. When the first round is fired, and all hell breaks loose, you’d better be in a position to be nimble. Adapt, improvise, and overcome.
Their email (full text below) provides a litany of issues describing why they are having to take a “hiatus.” However, many of the stated issues could have (should have) easily been addressed in the planning stages of their business (bandwidth, server downtime, lack of customers).
One of my favorite lines is where the Fruitcast guys inform us that they are “going to put Fruitcast on a brief hiatus, so we can work on it without annoying our member podcasters in the meantime.” Hmm. Call me crazy, but I would call shutting your service down for the summer “annoying to your members.” Probably even more so. A proper development plan would have provided an environment for handling such an event. The current service could have been continued while work progressed on the “2.0″ version. Just my two cents.
Bootstrapping isn’t for every business, and it isn’t for everyone. I believe you can bootstrap your way into relative obscurity if you aren’t careful. At some point, if you want to go big, you need capital, be it from the inside (founders, organic revenue growth, etc.) or from the outside (investors).
Finally, I will leave you pondering these questions:
- Fruitcast has stated that they are going to “be back soon.” But have they worn out their welcome?
- Users have high expectations these days, as do sponsors (their customer segment). What are the chances of a comeback?
- Will adoption be there this time?
- If they re-emerge with a solid business plan and adequate resources, will the market view this favorably, or will they forever be viewed as a “could-have-been?”
- Given the increasing number of “podcast advertising” plays popping up on the radar, have they missed their window of opportunity to be a player in this space?
I certainly wish the Fruitcast team nothing but success. I think the core of their idea is still a solid one.
Here is the original Fruitcast email, if you’d like to read it:
Dearest Fruitcasters,
We’re not going to beat around the bush — Fruitcast needs a lot of work. As one of the podcasters who has signed up for our service, you’ve experienced our ups and downs, server moves, service outages, etc., and most of you have been wonderfully patient with us while we try to figure all these things out. Now it’s time to make some things right.
-= OUR MAJOR ISSUES =-
Here are the biggest problems we’ve been facing:
1. LACK OF ADVERTISERS. We’re working on educating the ad industry, but it’s going to take some time before we have enough advertisers to satisfy even a fraction of the podcasters who are wanting to run ads. We’re now working on some exciting new ways to make it even *easier* for smaller advertisers to run campaigns on podcasts.
2. BANDWIDTH. If we were a VC-funded firm with heaps of money to throw around, we could easy take care of this — but we’re not. We’re running on a relatively efficient budget, and we’ve had to try to find a good balance between power and cost. Our current hosting solution just isn’t cutting it (as you may have noticed), and we’re working on some potential relationships with hosting/bandwidth providers to get the kind of solution that Fruitcast really needs.
3. SERVER DOWNTIME. It’s totally unacceptable for a middle-man solution like Fruitcast to go down as often as it does. There are a combination of issues, including the hosting platform, code quirks, less-than-adequate handling of non-standard feeds, etc., that are causing some of these problems. In addition to seeking a more stable platform, we’re also building a number of monitoring tools that will help the Fruitcast system react and self-adjust as necessary to ensure uptime.
-= HOW WE’RE GONNA FIX IT =-
You guys, the podcasters, have been bearing the brunt of these issues. Because we’re a genuinely podcaster-oriented company, this has been an acutely painful truth for us. We could continue to tweak and hope that you guys put up with these issues until we could finish them, but we simply can’t tolerate the downtime and other issues that you’ve been facing. We’re not going to get between you and your listeners until we can promise consistent uptime and high-quality service.
So, we’re going to take some drastic measures:
1. FRUITCAST IS OUT FOR SUMMER: We’re going to put Fruitcast on a brief hiatus, so we can work on it without annoying our member podcasters in the meantime.
2. REVAMPED PLATFORM: We’re going to completely rewrite our ad serving platform to incorporate the many fun, fascinating, and occasionally painful lessons we’ve learned over the past several months.
3. MORE FLEXIBLE OPTIONS: Long ads, short ads, live reads, sponsorship spots, radio spots. We’ve listened to your feedback, and you’ve indicated that you’re quite comfortable with offering a variety of options to advertisers. We’re going to give it to them.
4. MORE PODCASTER CONTROL: You should have the ability to approve or reject every advertiser who wants to put a spot on your podcast. We’ll give you that ability.
5. MORE PROMOTION: Our new system will give allow you to recruit potential advertisers right from your own website. (We’ve also got a number of other clever ideas up our sleeve.)
6. QUALITY CONTROL: We’ve allowed every podcaster who signed up to be listed in our directory, and it doesn’t seem like that’s fair to the advertisers, or to podcasters who are putting a ton of effort into their work. We’re not going to tell you what to podcast about, but we will have certain requirements for feed integrity, hosting consistency, audio quality, etc.
-= WHAT THIS MEANS FOR YOU =-
The most important thing for you to do right now is to CHANGE YOUR FEED to use your base url instead of your Fruitcast url. For most of you, this should be as simple as changing the url in Feedburner, but some of you may have used the actual Fruitcast url as your primary feed, and you’ll have to let your subscribers know that it’s changing. (Sorry!)
We’ll do everything we can, including manually redirecting every feed, to make this as smooth a transition as possible. However, the sooner you can get your listeners back onto your base feed url, the easier the transition will be.
-= THIS IS THE BEGINNING =-
We’re going to bust our behinds and come out with Fruitcast v2.0 as soon as possible. We genuinely appreciate you, the members, for standing by us through the rough times of an early startup. This isn’t goodbye — it’s more like a trip to the supermarket. We’ll be back, and we’ll be bringing ice cream with us.
(More updates will come soon…feel free to reply with any questions you might have.)
Good night, and good luck!
The Fruitcast Crew
Cheers.
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Hey there, James from Fruitcast here. :-)
I appreciate the post, and you’ve made some great and truthful points here. We do have a lot to work on, and it was a hard decision for us to acknowledge that and take some time out to tinker with things.
For what it’s worth, though, we have been trying to approach this with a more flexible, iterative, Web 2.0 approach than the traditional monolithic business launch style.
The general idea behind this is that a company can be more successful by launching earlier and responding flexibily to customer behavior than by simply trying to plan everything beforehand and have a perfect launch. Podcasting is still very new, and anyone getting into the market will be taking a lot of lumps.
I can’t say that our first pass was particularly graceful, but we consider that a normal part of our business process, rather than a total failure. We learn, we adjust, and we repeat.
Whether that iterative business model actually works remains to be seen, but for what it’s worth, I’m a lot more optimistic about Fruitcast now than I was even on the day that it launched. Those who learn the harshest lessons usually either give up entirely, or become fanatical about implementing what they’ve learned. We’re in the latter group.
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First, there is definitely some battle-hardened, real-world advice from someone who has launched quite a few successful ventures — as to be expected — thank you Scott, you blog well.
And James, I commend you for your honesty and transparency in what I can only imagine must have been an awfully hard decision.
You touched on exactly what I was formulating while reading too — that the “proper development plan” and “you need [capital investment]” advice above goes directly against a lot of the mantras coming out of some recent conferences — SXSW and the RailsConf talks come immediately to mind. The keynote speach at SXSW was even “the guys from 37signals” speaking enthusiastically about doing less with less, launching now, “not taking on capital” and being agile to your customer’s demands, as you very succintly stated.
I’m glad to hear you’re fighting the good fight still, and we appreciate the honesty. I suppose you could have just gone out silently in the night like so many other Web2.0 “plays,” but instead you applied the principal of keeping your development and business efforts open and transparent to the users for that iterative feedback loop and I commend you.
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James – thanks for stopping by, and CBQ, thanks for chiming in as well.
There is some truth to companies potentially being more successful by “launching with less”, not taking on extraneous (or premature) capital investments, etc.
However, I would recommend keeping all of this in perspective.
James, you mentioned that your first pass wasn’t “graceful”, and that you consider that to be a part of your normal business process, and not a total failure. You go on to say that you learn, adjust, and repeat.
In theory, I would agree with you. Sounds reasonable! However, if you have to shut the service down for half a year (a guess), then I’m struggling to understand how this could be considered part of anything “normal.”
Agility doesn’t have to come at the sacrifice of planning – the shape of the planning should evolve along with the enterprise, if that makes any sense. I would certainly not recommend a monolithic approach to planning in this day and age. However, a solid plan of action, even at the conceptual level, can be achieved fairly quickly.
Shooting from the hip will rarely work. When it does work, the person who made it work usually writes a book, starts a movement, and enjoys a certain amount of fame. That is, before everyone realizes that he just got lucky.
As I mentioned in the original post, it is pretty easy to bootstrap your way into relative obscurity if you aren’t careful. You can also iterate yourself to death, too. At some point, either the business model achieves traction, or it doesn’t.
If it does take off, then you look like a hero. You will be invited to tour the world with the guys from 37signals, get lots of hot chicks, and maybe even get a reality TV show of your own (after you finish your book tour, of course).
However, if it doesn’t, you end up with very little to show for a boatload of hard work (and potentially some depletion of personal savings). Not to mention that your wife will probably leave you for some guy who is currently touring the world with the 37signals guys.
All kidding aside, I don’t get caught up in the 37signals hype. What they are espousing isn’t new. I remember listening to early SCRUM evangelists back in the 1980s. 37signals is merely the fresh face currently en vogue. They are doing a great job in evangelizing for the cause, though.
On a final note, “agility” can get you into trouble probably easier than it can make you a millionaire. The proverbial double-edged sword. You can cut someone’s arm off with it, but it hurts like hell when it is your own arm. ;)
Rambling now … good discussion.
Fruitcast is undoubtedly on the early wave of podcast advertising. Good luck on getting the kinks worked out – I think you guys still have a good chance of solidifying your position in the space.
Cheers.
Scott -
Isn’t there a more basic reason for why this isn’t working?
Isn’t it just too early? It took a while for adwords, the most basic form of content-related advertising, to catch on…most people don’t event know what a blog is, let alone a Podcast. A year of technical design and planning wouldn’t solve this problem.
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Hi there, Derek – thanks for dropping in. You’re right. Issues such as bandwidth and server uptime, do indeed fall under the technical umbrella.
However, customer acquisition, retention, et al are all staple items of a marketing plan (which is a component of the macro business plan. )
As far as the “curve” goes, there were a lot of really great ideas back int he 1990s (amid the plethora of hyper-funded online dog food plays). Some of them were truly ahead of their time. The trick there is “staying power.”
If there is a significant adoption curve in the forecast, this should be taken into account whenever any business is laying out the groundwork. You need to secure enough capital, and have a clear plan, to get you across the chasm, as it were.
Cheers.
Scott
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