Odeo: A Sign of Things to Come?

Twenty months after raising $5-million of venture capital and several strategic mistakes later, Odeo's founder has decided to buy back the company from investors, and rename itself Obvious Corp. What's particularly interesting about Odeo's move is whether this is just the beginning of a trend in which Web 2.0 entrepreneurs will take control of their companies again after interest from investors disappears due to a lack of progress. The silver lining within the Web 2.0 environment is start-ups can be fairly low-cost operations if you eliminate the frills (marketing, traveling, major application upgrades, etc.). This makes it easier for a start-up to survive when its VCs bail on the idea – rather than having to shut down. Odeo's founder, Evan Williams, obviously believes there is lots of potential in the podcasting market and the company's prospects can improve with some strategic tweaks. Don't be surprised to more entrepreneurs refuse to walk away from their creations even when “the money” disappears. The unwillingness to concede defeat is another thing that separates today's Web landscape from the dot-com days when many companies had little choice but to close their doors when the investors checked out. For more, check out GigaOm and Ben Metcalfe.

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Anonymous

I'm going to have to disagree here Mark, for a few reasons. First, I don't think it had anything to do with there not being enough money or VCs “pulling out”. In his entry he said that they had enough money to sit lull for a few years, work hard on the same path, and see what happens but Ev wasn't satisfied with that. Second, I highly doubt that his investors weren't still interested considering that Ev and his team were some of the most well-known entrepreneurs from the dotcom bubble all grouped together and taking on pondcasting — there was (and is) still a lot of room in the podcasting industry and I'm sure if any team could do well in it, it's Ev and his team.
I doubt that this will become a trend in the industry, just because first-time entrepreneurs (the kind that makeup the majority of Web 2.0 startups I presume) just don't have a few million dollars of their own money sitting around in an account somewhere, waiting to be used for a VC buyout. If they do have that kind of money available, why even take an outside investment? Why lose that control? Ev said that they raised too much money and didn't want to be locked into what they said they'd spend the money on, so he bought them out. I think it's a unique situation caused by one entrepreneur's conviction.
Vaibhav Domkundwar – iNods.com

This is awesome for Evan, and I totally believe in the model and everything he outlined on his blog post about Obvious.
Its funny how I thought, I was reading my own thoughts as I read through his justification, as we have build exactly the same model at Better Labs (http://www.betterlabs.net) since Dec 2005. Most importantly, we have build this completely out of our Pune, India office which bring a lot more scalability for the experiments – what we call as the 12-24 month web service, beyond which the successful ones will thrive as independent companies. dealplumber (http://www.dealplumber.com), indiagoes (http://www.indiagoes.com), iNods (http://www.inods.com) are already in their 1.0 versions.
However, there is a BIG CHALLENGE of how do you follow through after your 1.0 version to drive traffic and customer acquisition, which will make or break this model for everyone who attempts it.
Its re-assuring though, to think someone else who is a lot more accomplished thinks the same.
All the very best to Evan, and his team.