Is Joost Failing?
Just under a year ago, I wrote about IPTV company, Joost, closing a susbtantial $45M round of VC funding led by Sequoia Capital and Index Ventures (I also wrote about them a month later) At that time, I was dubious that the timing of the venture was right, and because of that I was unclear why they needed to raise so much money to expand so fast.
Today, it looks like the company has realised it grew too fast. Joost is rumoured to have cut around 30% of its workforce. That kind of thing often creates terrible morale in a start-up, and usually means good people will walk - often with good reason. When a start-up cuts headcount, you really have to ask hard questions - such as if its business is failing fundamentally.
So, a year on from their financing, what does Joost look like today? The Compete.com stats suggest that Joost isn’t doing that well:
That trend is a long way from anything you could call spectacular growth. Anecdotally, I can tell you that I know plenty of people that use IPTV, but I don’t know anyone that uses Joost. Also, I’m a big fan of IPTV myself; but when I browse through the 20,000 shows Joost has on offer, though, I can’t find a single show that I feel compelled to watch.
So… is Joost failing? I think it might be. The company has, so far, failed to do the kind of content deals it needs to do to succeed. Now, it might be that the deals will take time to do. However, it might also might mean the company’s entire business model is fundamentally broken.
Because Joost is such a high-profile investment, I don’t expect either Sequoia or Index will be prepared to let it appear to fail; so it will be interesting to see what happens next. For sure, though, it can’t go on like this - something has to change…
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