Liz Gannes

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“Like Eating Glass”: Sean Parker on Airtime’s Bumpy Launch, Exec Departures and More

Photo credit: Ben Baker

This is how Sean Parker — the famous and sometimes infamous entrepreneur whose legendary credits include Napster, Facebook and Spotify — described how his newest high-profile venture, Airtime, is going so far:

“Running a start-up is like eating glass. You just start to like the taste of your own blood.”

If that sounds very painful and a bit twisted (as well as vintage Parker), as it turns out, it’s a pretty accurate description of the state of the situation at the much-touted, heavily funded next-generation communications platform.

Along with executive turmoil — including the upcoming stepping back of tech lead Eric Feng and Shawn Fanning, Parker’s Napster co-founder, who was the CEO and driving force behind Airtime while Parker was focused on Spotify last year — there has also been a very weak launch in getting Airtime off the ground.

Since it debuted in June with more than $33 million in funding, the site has only 10,000 monthly active users so far.

To Parker, it’s all just part of the always-tumultuous birth of any notable start-up.

“We are iterating on our approach,” he insisted in an interview at Airtime’s office in San Francisco on Friday. “Airtime is finally getting around to some of the bigger ideas that got me interested in this project in the first place.”

As usual for Parker, Airtime is a significant idea, which he is now describing as a next-generation Skype that will be “transforming communications.”

It will include a plethora of innovations to come that will further make it clear that big things are on the road ahead.

“Now is the most toxic time ever in Silicon Valley,” explained Parker, because people start companies without conviction about their ideas, just to get bought by Facebook or someone else.

Not him, apparently.

But first there are the many bumps, especially the worrisome changes in leadership at Airtime.

First, there is Feng, who will be leaving the company soon, marking a quick exit for the high-profile “acqhire” who was formerly the founding CTO of Hulu and a partner at powerful venture firm Kleiner Perkins.

After Airtime bought Feng’s start-up Erly in March, Parker and Feng fired members of the existing Airtime product team, ripped out the technology that had been built over the past two years — which apparently broke under the strain of just 100 concurrent users — and rebuilt the site in time for the June launch.

Eric Feng

Parker, Feng and Airtime investors maintain that Feng’s role at Airtime was always set up to be temporary, to help Airtime through its initial public launch. The Erly acquisition was “frontloaded,” they say, so that the rewards for being bought came upfront rather than after years at the new gig. And for his part, Feng has not yet left Airtime, and said he is not sure what he is doing next.

But there are concerns from inside and outside the company that because the Airtime product team is essentially Feng’s Erly team (which, in turn, was essentially Feng’s Hulu team), it’s unclear whether they will leave with him or stay with Parker.

In addition, long-time Parker associate Fanning no longer has a day-to-day role at the company, although he is still on the board.

It’s a problem, because in the past Parker has had a pattern of working alongside a visionary entrepreneur — be it Fanning at Napster, Mark Zuckerberg at Facebook, or Daniel Ek at Spotify — and at Airtime he now has no such partner.

Parker agreed that his strength throughout his various projects, from Napster until now, has been around product direction, execution and recognizing growth opportunities — and less about steady leadership and operations.

And whether Airtime has Parker’s full attention is also up in the air — he is still on six company boards and has a role as a venture investor at Founders Fund, among many other commitments.

Of Airtime’s investors, Kleiner Perkins board member Bing Gordon is most heavily involved, often spending a day at the company per week.

All that said, this mishegas is business as usual for Parker.

“Start-up teams are always in flux, so, like all start-ups, we’re always talking to candidates for various key roles,” he said. “At this point, nothing definitive has been decided.”

A scene from the wacky Airtime launch event

Parker’s wealth and celebrity don’t make running Airtime any easier. When the start-up came to life as Parker’s next act — at a fancy launch event in New York headlined by stars such as Jim Carrey and Olivia Munn — expectations were immediately high.

By the way, Parker disputed the widespread characterization of the event as a ridiculous expense and an embarrassing mishap for a start-up.

The launch was successful, Parker said, because it was widely picked up in the popular press and drove a huge spike in users that helped test the Airtime infrastructure.

And with a straight face, he actually described the New York launch as a “lean scrappy event,” saying many people worked on it for equity and that it was orders of magnitude cheaper than a party he put on for Spotify.

“It did drive traffic — so it worked,” he said, even though growth soon leveled off.

Of the initial product, which connects strangers for live video chats based on their interests, Parker said, “One-to-one is never viral.”

Along with that, Parker said one major issue is that Airtime has been misunderstood as the second coming of Chatroulette, the hot-then-very-not video hookup service.

He noted that while live video chat with random strangers is indeed one aspect of the service, there are also features for calling up Facebook friends, and plans for multiparty, asynchronous and collaborative conversations.

Parker and engineering lead Andrew Lin showed me the newest feature, set to launch later this week, as a demonstration that Airtime continues to push forward.

The site’s new “Reactions” option will allow users to post Webcam videos of themselves watching Internet videos, which friends can sync up while they are watching the original videos.

Thus, when you’re watching a YouTube video within Airtime, and a cat flushes the toilet or the underdog team scores a touchdown, you can see your friend’s face go “Whaa?” or “Yay!” alongside.

Reactions might be a better fit for Parker’s celebrity connections than Airtime was when it initially launched, he pointed out. Stars probably don’t have much interest in chatting with one stranger at a time, but their fans might want to see a close-up of their faces as they get totally grossed out by some stupid human trick on YouTube.

Sean Parker and Andrew Lin show off new Airtime features

It’s an interesting idea, but one still far from the kind of size and scale that many are still expecting.

Indeed, for some tech watchers, Airtime seems like a replay of Color, another start-up with tons of money and a well-known CEO that launched a social serendipity product that didn’t take off, and has had ongoing leadership instability.

Parker said he strongly disputed the comparison to any company that had changed its original vision — what is often call a “pivot” in Silicon Valley.

That’s not what is going on at Airtime, he stressed. Parker said he’s not pivoting as much as making the inevitably painful journey that all important start-ups must make.

“It’s only 12 weeks from launch,” he noted. “I’ve only been running the company since March.”

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle