Update: See here.
There have been a number of reports that silicon valley based Podtech is literally falling apart. I spoke to Podtech CEO John Furrier and asked him how many of the rumors are true. While he certainly fed me a certain amount of spin, the company has at least a few signs of life.
Podtech raised what was at the time a large series A round of funding – $5.5 million in March 2006. They were then largely focused on creating audio content only – interviews with entrepreneurs and paid “infomercial” type corporate podcasts. They quickly moved into video, hired Robert Scoble away from Microsoft, and got serious about producing a lot of content.
Fast forward to the Spring of 2007. They started to hit a lot of competition in the video space, Furrier says. Instead of creating yet more content, the company started letting some content-focused employees go, and refocused on syndicating third party stuff under the guidance of Steve Gillmor, their new VP of Creative Development. Talent like Loren Feldman at 1938 Media and National Banana came on board and began using Podtech's Flash player in exchange for guaranteed advertising revenue. There are lots of other shows as well – see the right sidebar of their site.
All employees are encouraged to spend some of their time creating content, as Robert Scoble does with Scoble Show. Other than that, Furrier says, the company is out of the content creation business.
But Podtech needed a second round of financing…and they couldn't convince a new investor to come in at current traffic levels and revenues. Two weeks ago existing investors US Venture Partners and Venrock Associates invested another $2 million in the company at the same valuation as the first round. Between revenues and the new capital, Furrier says they are good for a few more months.
Furrier is also looking for a new CEO for the company. Some rumors suggest that this was one of the requirements that Podtech's venture capitalists put on the new round of capital. Furrier says it was his idea to do this, and that the company is at a stage where it needs a different kind of leader. He'll stay on as President of the company, he says.
Their new model, which finds and signs talent for guaranteed revenue, and then aggregates sites to advertisers, is a good one. They need to continue to cut staff and get their burn rate very low – they will effectively become a production house and ad sales team for their partners. If they can complete the transition before they run out of cash, Podtech could still have a bright future ahead of it.