Posted on February 22, 2008
Filed Under Web 2.0 Kool Aid |
Back in November, I wrote a piece that was critical of Digital Telepathy, a self-proclaimed “digital marketing agency that embodies the Web 2.0 philosophy of a democratized Internet” that was pitching entrepreneurs on its ability to deliver them with a turnkey Web 2.0 startup complete with a “truly unique business concept,” “proven user experience design” and a “completed web app.”
Some things, such as the company’s claim that when they deliver a ready-to-launch product, “there will already be a long line waiting there to catch a glimpse,” bordered on the absurd.
Poor metaphors and typos aside, I would encourage aspiring Web 2.0 billionaires with more money than brains to ask themselves: if Digital Telepathy is able to build a successful Web 2.0 startup in 90 days and successful Web 2.0 startups have commanded significant valuations from investors and acquirers, just why is Digital Telepathy so eager to make paltry sums of up to $250,000 when the businesses it’s supposedly going to create for clients could be worth so much more? Wouldn’t Digital Telepathy inevitably make a lot more money building its own portfolio of startups given its apparent sure-fire methodology for creating successful Web 2.0 businesses?
The answer was obvious to me: Digital Telepathy was basically exploiting wannabe entrepreneurs, even if this wasn’t the company’s intention. Instead of making realistic promises (i.e. “we’ll help you build your web application”), they made promises that I still believe are essentially impossible to keep (i.e. “we’ll deliver a fully-functional business with a solid strategy and business model in 90 days”).
Because Web 2.0 is increasingly filled with bullshit and Digital Telepathy’s claims weren’t a whole lot more foul-smelling than all the bullshit lining the streets of Sand Hill Road, I forgot about it.
Then one of the readers of The Drama 2.0 Show emailed me and pointed me in the direction of that Chuck Longanecker, the founder of Digital Telepathy, had written for Found|Read.
I found this post to be fascinating, not simply because of the content, but because of the timing (November 26, 2007). In this post, he detailed how Digital Telepathy had recently gone through a major crisis:
I recently had a business-life changing experience. Our company, digital-telepathy, was once a full-service interactive agency for Web 2.0 companies. We provided business strategy, design, development and marketing services for web apps. We were pulling in about $300,000 a project. However, I started to notice that our team (including me) was constantly stressed and lacked the energy required to enjoy our projects and deliver innovative concepts. My outlook has always been that everyone should have the ability to enjoy every second of their life, regardless of work or play. I could tell we were failing at our own game.
Out of the blue, our biggest client fired us and then hired all of our developers. Panic time, right? Nope.
We discovered that delivering business strategy and better user experience(s) were our strong points, and also hard-to-find skills in our industry. We took on a new goal: to build a product that enabled entrepreneurs to transform their ideas into realities. We turned our services inside-out and started with the timeline and cost to define a consistent project scope. This enabled us to create a 90 day process that designed custom web applications and delivered our clients’ ideas to market quickly, without sacrificing the authenticity of the project. We now partner with the best development and marketing firms in the nation. In our new iteration, digital-telepathy operates less like a straight consultancy, and more like an executive producer for startups. This is how our new service, “Biz in a Box” was born.
We cranked out a new website, announced our business model to a few press contacts and made TechCrunch shortly thereafter. Thirty days after our breakdown we went from a disturbingly quiet office to a bustling hub of energy and innovation. We can barely keep up with our project requests—we gained nearly 100 new prospects—and have the luxury of choosing those we take on.
Before I jump in with some commentary, I want to make it clear that nobody should criticize Chuck for having gone through such a crisis. I personally don’t know enough about the situation to judge whether there were mistakes made on his part that led to the company’s problems or whether a combination of bad luck and circumstances caused them. It’s quite irrelevant and anybody who has been in business long enough will face similar challenges. I have certainly seen my fair share of business drama too.
What I did find incredibly interesting about Chuck’s post is that Digital Telepathy, which was featured on TechCrunch on November 8, 2007, apparently launched its “Biz in a Box” service so shortly after going through a major strategy shift and restructuring.
Clearly, I will not argue that Digital Telepathy shouldn’t have changed strategies and restructured to deal with the problems it was facing, but I do question just how appropriate it was for a company that had recently been fired by its biggest client and lost all of its developers to represent that it was capable of, for a six-figure amount, building a real “startup” for entrepreneurs in 90 days.
I questioned the claims being made by Digital Telepathy even when I had no idea that it was a company that had recently gone through a major crisis and I would question similar claims even if they were being made by a reputable company with a solid track record. Of course, I don’t know of any reputable companies with solid track records who claim that a 15-day process, for instance, can result in the creation of a solid business model (something that even mature Web 2.0 startups like Facebook and Digg seem ill-equipped to come up with).
It all seems a little bit sketchy to me, if not downright unethical. Essentially, from my perspective at least, it appears that Digital Telepathy had no reservations about taking significant amounts of money from potentially naive entrepreneurs in exchange for an unrealistic service that Digital Telepathy ostensibly had never proven worked in the real world.
My perspective, of course, could be wrong. Therefore, since it’s been more than 90 days since Digital Telepathy’s “Biz in a Box” service burst onto the scene with the TechCrunch plug that it so proudly promotes on its homepage, I will end this post by asking three simple questions:
- In the past 90 days, how many Web 2.0 “startups” have been launched by Digital Telepathy through its “Biz in a Box” service?
- Of those, how many are taking off due to the Digital Telepathy’s marketing prowess?
- Of those, how many are making money with a real business model created by Digital Telepathy?