Citizen Agency

Ev and Biz’s latest move to buy back their assets from their investors has signaled a shift in this era.

You see, all sorts of hubub goes around in the media (new and old) when ‘big’ stuff happens. Someone gets millions in funding or someone gets bought for billions. But what everyone keeps missing is that there are a huge number of really rockin’ companies being launched without any intention of doing either of those things. These are the ‘unsung’ heroes of the Web 2.0 era.

These companies care about quality over quantity. These bloggers have small, dedicated audiences and could care less about their T’rati ranking or page views. These startups are bootstrapping themselves to be the true disruptors – those who are challenging the very notion of ’success’ and the core ethics of business. They want to build their companies and products right instead of flipping.
So, when Ev announced Obvious Corp and their move to buy back their assets Odeo and Twitter, my heart skipped a beat. Could this be another sign that the scales are being balanced? To me, Obvious was sending out the message to other startup entrepreneurs that there is no shame in bootstrapping. There is no shame in putting users ahead of VC interests. We can and will build businesses out of something real.

For those of you who don’t Twitter, it is helpful to know how involved Ev is in ‘testing’ out his own software. I’ve talked about how involved over at HPC. He is truly part of the community he serves. This type of energy and dedication can’t be faked. I truly believe that the reason Ev’s projects have been so successful (even the ‘unsuccessful ones’ are successful by reasonable standards) is because of his involvement with his user community. In the case of Odeo (that he proclaimed a failure), he admitted that one of his downfalls was that he wasn’t a podcaster himself, therefore, he didn’t know who his audience was. I don’t hear that from many CEO’s.
I really, really loved David Galbraith’s analysis of Obvious Corp:

If you can’t IPO or sell then what alternative is there?The Sustainable Model

The alternative is to question the whole notion of exit and to build a real company.

When I was an architect, you didn’t set up a practice on your own to ‘exit’, you setup to build a company that made a profit and made products that made the environment a better place along the way – a sustainable enterprise. The whole idea of ‘exit’ in the context of building an architecture firm, or a legal or medical practice is preposterous.

The reason why tech. companies have fallen into the mindset of raise money and exit, ‘live fast and sell young’ is that they traditionally needed large amounts of capital, both to bootstrap and later to fuel growth. They needed to gain ‘market share’ dictated by quantitative things like price rather than intangibles such as good design . But that has changed.

David is so right. We ran into this issue when we started Citizen Agency. People were so ensconced in this ‘raise capital, build and flip’ model that they couldn’t comprehend the business model of a consultancy. They’d ask, “What is your business model?” We were floored. Only in the Valley.

The funniest part of this situation is that so many people still don’t understand why Obvious Corp made this move. There are a few people who have surmised that they were trying to regain respect from the VC’s so they could raise more money in the future. Others tied it back to Ev’s Future of Web Apps talk when he discussed the failings of Odeo – thinking that this would help ‘clear his conscience’. Even their own VC’s are taking it as a signal of respect towards backers. I’m not saying that Ev and Biz don’t respect their backers, but I would bet that buying back Odeo and Twitter had very little to do with a hat tip to their investors and more to do with taking back control of their own future.

And what will that control get them? The ability to focus on what matters to them the most:

…I just wanted to create a company that would be as much fun and as fulfilling as possible. Fun in work to me means a lot of freedom, and ton of creativity, working with people I respect and like, and pursuing ideas that are just crazy enough to work. I don’t want to have to worry about getting buy-in from executives or a board, raising money, worrying about investor’s perceptions, or cashing out.

Craft. Community. Creativity. Sounds like a bright future to me.
That is why Obvious Corp is our Upstanding Citizens of the week. Thanks for the inspiration!