Spotrunner
Back in March when Spotrunner raised a monster round I was more than a little skeptical. So many things I had seen and heard about the company didn’t add up. The premise was wonderful but I think that the company simply hadn’t achieved any meaningful traction. And pumping their valuation up and raising wads of cash wasn’t going to solve that.
Valleywag reports (god can I even say that?) that the firm is about to layoff 100 people and re-focus on selling online advertising to small firms. Like that market is under-served.
The company joins other well-funded startups like ReachLocal and Yodle and then not to mention other huge companies like Dex who are making a move in the same direction.
The business is horrible from a margin point of view: You sell other people’s things and have to build out a huge sales force. But I guess you can show fast revenue growth and for troubled investors in the company the hope may be that a greater fool in the room may take it off their hands (desperate companies like Microsoft or someone like Comcast).
Niki you’re right about this. Spot Runner is spending all sorts of their investor’s money and has little chance of survival. They waited too long to sell, and now their books show the truth - that ready-made ads are a fad, and that customers get wise to air time fees and big commissions. Spotzer may have a similar problem in that they followed the Spotrunner model. Only the online agency model invented by Cheap TV Spots works well. CheapTVSpots produces custom-made award-winning ads for TV, the web and mobile for a low flat rate, and unlike the other two examples, Cheap TV Spots does not add fees or commissions to the air time. I and a few others that have not drank the Spot Runner venture capital Kool Aid believe that Spot Runner will have some more resignations as soon as their stock vests. Of course, what is stock worth in a company with this kind of trouble, rumored low morale, in a (as you say) a very saturated market?
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