Web 2.0 “Biz in a Box” Service Revisited

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.

I stated:

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:

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4 Responses to “Web 2.0 “Biz in a Box” Service Revisited”

  1. Chuck on February 22nd, 2008 2:33 pm

    Thanks for revisiting the post. I appreciate D2.0’s no bullshit approach, it’s good to shake things up in an industry that sometimes views business through rose colored glasses.

    First, I would like to say that I am always open to discussing the business philosophy and services of digital-telepathy. In addition, if you question the authenticity of my sentiments in the below comment then you can call me at 619.255.8628 to discuss. Here’s a bit of background of what happened and what’s new in the last 90 days.

    After we lost our engineers, I looked within dt and realized that we have an incredibly supportive and badass crew to build startups. We’re an even mix of designers, strategists, UI developers and marketers with multiple years of experience building businesses from scratch. We took 3 weeks and redefined our organization from the ground up. We wanted to stop being an agency that provided services and avoid the typical issues that come up in client/vendor relationships. We stopped working with clients that did not support this vision and started to rebuild. We honed our efforts on the aspects of business that we did best - web/business strategy and user-experience. We built 2 products out of these services, one to introduce an entrepreneur’s idea to market (Biz in a Box) and one to help startups grow into more mature businesses (Cultivate Engine). We partnered with Rails shops and priced the the products based on the effort and time it takes to develop and design the first stage of an application without cutting corners. The products were developed with the philosophy that a great idea for a web app/business can be developed in it’s simplest form (alpha/private beta) in 3 months. The app should be offered to those people that will benefit from it and their feedback should be used to mature the business, feature set, brand…etc. It’s simple really - we dig working with startups and have the combined experience and proficiencies to enable their ideas.

    This story always precedes our discussion of services. We want people to understand what we have been through and why we do what we do. We don’t actually perform typical “sales” of our services. We meet with interested startups and entrepreneurs, explain our process and introduce them to our staff. We left them decide if it is the right fit. In fact, we turn a lot of prospects down regardless of their budget if we feel the concept lacks direction or potential. Our reputation in the industry is far more valuable than our revenue. We never claim to be the special sauce behind a startup or a turnkey solution for success. We exist to enable the entrepreneur to accomplish their startup’s goals as well as provide additional strategy and a structured process to get to market.

    The revenue generated at dt is used for our overhead and is then reinvested in our own projects. We use our Biz in a Box process and partners to build out our concepts. We have a lot of skin in the startup game which allows us to relate directly to the pains and pleasure of our clients and colleagues. Our first app is championsound.com and was built in about 60 days.

    Here’s an update from the last 90 days that should give further insight to what we are up to:

    * We’ve recently optimized the 90 Day Web App process and were able to lower the cost to $100k.
    * We’ve opened up our office to Coworking (http://www.dtelepathy.com/co-working)
    * We are heading up an effort to bring together the startups in San Diego:
    * The TechCrunch article definitely gave us a lot of exposure and many prospects, yet it did not yield one client.
    * We are on our 8th Biz in Box currently.

    Most of our projects have been the 45 day plan where we perform all the web strategy and user experience. Because of this, many of the sites are not live to the public yet. We’ve found a nice niche helping out teams that have already started the development by fine tuning their strategy, enhancing their feature set and tying the UI to the backend. At this point, the only people that would truly be able to quantify our effectiveness would be our clients.

    As for the profitability of the projects from the last 3 months - if we could find a way to restructure our organization, fill our pipeline with clients, pump out apps and have them be profitable - all in 90 days - I’d already be retired and writing this from a beach with a pina colada in hand :)


  2. un.valley on February 22nd, 2008 10:09 pm

    chuck says: sit down.

  3. DIGITAL SHITHOLE on March 12th, 2008 11:45 pm

    Did you notice that the Digital Telepathy fuckers removed the “digital visionaries” bullshit from their site?

    I think it was because of you!

    They rewrote their entire copy. Now it’s not as retarded as it used to be but it’s still plain bullshit.

    Digital Telepathy latest “strategy”is host every single fucking web2.0 event in San Diego and then post 1000 blog posts about it trying to gain recognition.

    I have been in two and they suck. The fuckers don’t ever have anything good prepared. A fucking waste of time.

    Good luck with your Happy Hour 2.0!

  4. Ninja Gaiden on July 16th, 2008 3:00 am

    un.valley …

    nice Go Daddy parked page.

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