Akimbo’s End: An Insider’s Account

Analysts I spoke with today were unsurprised that Akimbo Systems went dark this weekend after multiple strategy revisions. (See their analysis of the kinks in Akimbo’s plans here.) But one thing that did surprise some of them was how soon after the company’s last infusion of capital and new management the final flame-out took place. Some reports have hinted at friction between employees of the video-on-demand vendor and its most recent top executives. I personally heard from one former employee, whose detailed account of Akimbo’s internal problems is excerpted here:

“Akimbo always had its share of issues. Charging for hardware, then charging a monthly service fee, then charging for content, wasn’t exactly a recipe for success. But these issues could have been addressed by putting the Akimbo service on other people’s boxes (TiVo, HomeZone, Windows Media Center) and changing revenue models (All you can eat, pure pay-per-view with now subscription).

“Akimbo also always had issues revolving around content. Are we a mainstream content play, or a niche play? Committing to one or the other would have helped a great deal. Still, something that could have been addressed.

“So it wasn’t in the best shape when Tom Frank came on board. Like most of my coworkers, I greeted his arrival with a lot of enthusiasm. Akimbo’s problems of the past had been a byproduct of indecision, and Tom Frank was anything but indecisive.

“The big problem was there was no new strategy. Actually that’s not fair. There may have been a strategy, but it was never communicated to the employees. Never in a cohesive way. And if someone asked, they were met with an angry response that everyone in the company knows what the strategy is.

“Tom Frank, Neil Goldman, and the crew they brought in had the attitude that ‘everything Akimbo has done in the past is wrong.’ It’s not like we were unaware of the problems. The first thing they started doing was killing products.

“Startup problem #1. Don’t kill all your products until you have something to replace them with.

“The box was shelved. Windows Media Center was shelved. AT&T was unofficially shelved (for contractual reasons, they couldn’t admit this one, so they took a snapshot of the catalog for AT&T, then left it there to stagnate).

“We were working on a project with Sonic, of DVD and CD software fame. We were pressured to get it out the door. This was revenue. This was the flagship. It was discontinued a little over a month after shipping it. I don’t know how it looked to the outside world, but to us, it was very disconcerting. What did the world think of us, if we discontinued everything we had done, without an announcement about what we were replacing it with?

“A ‘new strategy’ came out. We were going to go ‘Web-only,’ and the way we’d do it would be through regional ISPs and telcos. We had one on the line, CenturyTel, who had 400,000 DSL users who would happily lap up our video content. So we would rework our previous Sonic and Media Center work (which were Web applications, even if they didn’t resemble one), make it work with external billing and authentication, and we’d be able to address this new market.

“The design department came up with a beautiful-looking Web 2.0 demo for an Anime tradeshow. Everyone on the production side of the house was enthused that this was the direction to go.

“Apparently so were Tom Frank and Neil. So much so that they told CenturyTel that we were abandoning the existing plan and switching them over to this new, sexy model. Furthermore, it would be delivered in less than two months. At this point, most Akimbo employees were used to Tom’s emotional outbursts and were afraid to say anything controversial to him. Most people were afraid to tell him that this deadline was impossible, although I’m told that at least a couple of people did.

“Founder and VP of Product Management, Jim Funk, had left the company. The employees were exhausted and disillusioned. We worked really hard and did ship CenturyTel on time. It wasn’t sexy, but it worked. The thanks we got for our effort? Akimbo started shopping for new software. Our latest new strategy required that we purchase someone else’s video-on-demand software. So we started a due diligence process for purchasing someone else’s solution. And everyone started walking.

“They purchased a Canadian solution called iWave which didn’t solve their problems. In shopping around, they realized that Akimbo had built something of value and wanted to go back to the original codebase for the service. Unfortunately at this point, there were no engineers left who had worked on the original products. As a last ditch effort, they were going to go all porn with ‘CarnalTV.’ They lost the last of their talent at this point because they didn’t want to work for a porn company.”

I was unable to get in touch with Akimbo’s top executives but invite them to join this discussion so that we can hear their side of the story as well.

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