BY KEVIN MANAHAN
SplashCast was supposed to be the next big thing to come out of the Portland digital-media scene. Founded in 2007 and supported by over 70 individual investors, SplashCast eventually raised over $4 million in funding and went on to partner with giants like Hulu and Nike. But just a couple of years after launching, the plucky Portland startup was shut down.
What exactly went wrong with SplashCast? Tom Turnbull, the company’s vice president of business development, talked frankly about the rise and fall of SplashCast at the Oregon Entrepreneurs Network’s monthly PubTalk last week. Along with investors Angela Jackson and B. Scott Taylor, Turnbull spoke to a packed house of mingling entrepreneurs at Backspace in Portland’s Old Town, all three of them in remarkably good spirits considering their discussion of SplashCast’s failure. But the premise of the talk was the valuable lessons they learned from the company’s demise, which they shared earnestly.
Originally focused on providing tools to embed video, music and other content into online broadcast channels, SplashCast essentially went through three phases since its launch. It began with a user-generated content product aimed at bloggers and other small online publishers, which never quite took off in terms of both audience and revenue. The second stage was building branded applications within Facebook for companies like Nike and Red Bull, a model that proved to be better suited for a campaign-driven agency business, rather than a service-oriented technology business like SplashCast. The last stage was a promising partnership with Hulu to distribute their TV shows through social media (“social TV”) and build an audience around the content. But SplashCast still needed to raise money, a predicament worsened by the effects of the financial meltdown. The company ultimately was “unable to secure the necessary funding to continue operations,” chief executive Mike Berkeley said in a blog post, and SplashCast announced its closure in August 2009.
As for whether SplashCast actually gained any real traction with customers, Turnbull said the first phase of the company didn’t do much other than generate buzz. It wasn’t until the second phase that SplashCast began finding big-name customers by building the branded applications. And had they had more time to develop inventory and an audience to support the size of the ad campaigns, Turnbull said the third phase could have succeeded as well.
When the panel was asked what went wrong with SplashCast, one problem that stood out for Taylor was the multiple changes of direction the company went through, which wasn’t helped by having so many investors involved with SplashCast. “Multiple changes of direction burn cash, water down the brand and people don’t know who you are after a while,” Taylor said. Jackson added that timing was also a factor, as the company made the move from a grassroots-funded company to a more professional stage without having a clear product to generate revenue. And while the $4 million from angel investors was certainly welcome, it wasn’t enough to keep SplashCast alive, and Turnbull said being more proactive may have helped them survive the downturn. “I wish that we would have raised as much money as we possibly could have when we had that opportunity,” Turnbull said.
But despite the struggles, the SplashCast experience still had some positive takeaway. For Taylor, it came down to simply seeing the boldness and creativity of the staff. “The final result wasn’t what we wanted, but there were moments of execution that were brilliant, that worked, that were admired,” Taylor said. And while he admitted his own business, TAOW, has taken a hit –like SplashCast and so many others over the past couple of years – Taylor said scrappy and optimistic entrepreneurship are the keys to making this as good a time as ever to start a business.
Already taking that advice: Custom Curb Caps and Bodhi Tree Denim, the two startups presented by University of Portland students in five-minute pitches at the event. Judging by the pitches, they’re both scrappy and optimistic, like SplashCast before them – and currently seeking funding.
Kevin Manahan is the online editor for Oregon Business.