Six Months After Leaving Digg, Jay Adelson Opens Up, Hints at Stealth Project

Yesterday, at the TechCrunch Distupt conference, Digg founder Kevin Rose apologized for a recent redesign to the site that has turned off users in droves, lamented that Digg’s board once turned down an $80 million acquisition offer, and told the crowd that he was “burned out.”

At the time, I happened to be meeting with Jay Adelson, and the picture couldn’t have looked brighter by comparison. At a coffee shop in sunny Mill Valley, in Marin County, the former Digg CEO looked as relaxed as he ever has, dressed in shorts and sunglasses. The glass of lemonade in his hand served as a metaphor for his life since parting ways with Digg back in April.

I wanted to know how Adelson — a popular figure throughout the so-called Web 2.0 revolution (and co-founder of publicly traded Equinix before that) — was faring. We also talked, of course, about what he makes of what’s happened to Digg in recent months.

For the most part, Adelson has been mentoring 10-plus startups over the summer and has been making angel investments. But he also is working on a project (a startup?) that he says will most likely be revealed early next year. “I’m going to be involved in the creation of a number of [consumer Web] businesses over the next year or two,” he said. “I can’t really say whether or not I’ll be leading any one of them. The truth, to some extent, is that I don’t have the answers.”

He added, mysteriously: “Certainly by spring time, what I’m up to will be clear.”

Our conversation, edited for length, follows.

Q: Digg’s redesign has been portrayed as an unmitigated disaster. You were part of the redesign up to a point. What do you think of the backlash?

A: Digg is an interesting animal. It doesn’t matter what product you release. It doesn’t matter whether or not I agree or disagree with the philosophy. It doesn’t matter if anyone does. Change in the Digg community is unusually sensitive. And the Digg community — particularly the group of people who’ve made Digg great for so long — part of the wonderful thing about this community is the voice that Digg is able to give them. That very voice, that very control, is volatile when it goes the other way. And it’s just something that we grew to accept as an asset, not as a negative.

Back in March, when I was honing in on the details that, at least I thought would be a good product launch in the Fall, we always knew there would be a backlash, probably as intense as we’ve seen. It was not a surprise.

Q: But back in February, when we talked, the game plan sounded very different. We discussed a spate of niche sites, rather than what was ultimately released.

A: There’s so much data that they have now that I didn’t have six to eight months ago that’s relative to their decision making, so I can’t comment on that. We had identified more than year ago a series of things we thought were really critical to taking the site to the next level. One of that list of things was the “My News” product that’s allowed the changes you see in Release 4. So there’s nothing that you see in Digg 4 that we hadn’t talked about before. There’s obvious questions about the details, but again, I can’t really comment on the direction they went.

Back in February, I was excited about the idea of personalization and customization of your experience and I do think they stuck to that overarching theme, this idea of personalization. Because Digg’s homepage couldn’t suit different audiences. It was only suited for one audience.

Q: There was a time in 2008 when everyone thought Google was going to buy Digg. Yesterday, Kevin said that Digg once turned down an $80 million acquisition offer. Was that from Google?
 
A: I can honestly say that I am not familiar with the deal that Kevin is referring to. But even if I did, I couldn’t comment on details.

Q: What happened with Google? Reportedly, you were really close, then everything fell apart.

A: The rumors reported of that activity always exceeded reality, but as a former employee, I can’t comment on any details.

Q: It seemed like Digg was always in play. Is that an unfair characterization?

A: That’s not at all the case.  Most of the time we were busy with execution. Talking to companies about acquisition, for any executive team, is a massive distraction from doing the job.

Q: TechCrunch has suggested that the reason there was so much speculation about a Digg sale was because you and Kevin were actively soliciting interest. Is there any truth to that claim?

A: As the company gained attention, I think it had an usual feature: Stories about Digg tended to get to Digg’s home page, and therefore would generate tremendous traffic to the publication reporting rumors.  As a result, any rumors about Digg, even minor ones without any confirmed sources, tended to get coverage [and sometimes even went] viral.

Q: Michael Arrington reported back in May that Digg had six months to “get this ship going in the right direction.”

A: Six months to get the ship going — or what?

Q: That’s what I’m asking. Are investors thinking about letting it wind down?

A: At the time I left Digg, we had plenty of cash and we were funded to profitability. I think Digg’s investors, during my tenure, had been patient, waiting five years. Possibly Michael is referring to the tendency for VCs to push for an exit.  Any time you take money from venture it comes with an implicit agreement that there has to be some kind of ROI eventually.  Of course, I can’t speculate on these conversations after my departure.

Q: Rose also hinted yesterday that he might leave Digg by year end. What impact would that have on the company, in your view?
 
A: I really can’t speculate on Kevin’s relationship with the company.  What I can say is that Kevin is one of the most creative and talented people in his field, so wherever he goes and whatever he does, he adds value.

Q: When you announced that you were leaving Digg, you said that you were interested in incubating things. Have you been incubating ideas for startups? What’s been happening over the last six months?

A: I’ve been doing a little bit of everything. On the one hand, I’ve spent the last six months trying to separate from the community and to relax — ‘cause it’s been 20 years. From before I graduated [college], all of my jobs have overlapped, so I’ve been going nonstop. I get consumed with my startups. I get addicted to them. And one of my goals — I’m married with three children — was to get a little distance. It was very hard.  After announcing I was leaving Digg, it’s almost like my noise level went up.

But also, the reason I got involved in Digg in the first place is because I really like to mentor entrepreneurs and I really enjoy lending what lessons I’ve learned to their process, and so while I’ve been trying to separate and create perspective, I can’t stop. So I’ve been helping many businesses over the summer, shepherding them from idea stage to funding. (Adelson later estimated that he’s been helping between 10 and 15 startups.)

Q: Are you working with them in a formalized way? How are you finding one another?

A: A lot is word of mouth. I’ve been doing this all along, too, and there’s a network of people who refer people to me for this stage of their lifecycle. Part of it is also that I go look. I’m insatiable when it comes to this stuff. As for the formality or lack of formality, just watch this space. 

Q: Meaning? Are you going the “super angel” route, or will we see you at a startup as co-founder and CEO?

A: One thing is for sure. I’m going to be involved in the creation of a number of [consumer Web] businesses over the next year or two. I can’t really say whether or not I’ll be leading any one of them. The truth, to some extent, is that I don’t have the answers. I have a lot going on right now and I’m enjoying the opportunity to [contemplate] different directions. Right now I’m making investments. I’ve also taken advisory roles for equity and I’m advising companies where I’m not taking equity, where I’m doing it for the love of the people and the ideas. Certainly by spring time, what I’m up to will be clear.

Q: And will you take lessons from Digg? For example, do you ever think back and wonder if Digg listened too much to its users?

A: Maybe it did. But I think there were a couple of things going on in terms of voices influencing Digg. One was the media frenzy over Digg as the media darling frontrunner in this whole Web 2.0 revolution, and that had a momentum of its own and it was very important for Digg not to be carried away by what people perceived it to be.

There was also the voice of the users. I think they could have driven Digg in a different direction. But you’d be blown away by how many decisions we made that we knew would piss off the users but would be better for the ultimate goals of the company. So we didn’t kowtow to users all the time, definitely not. I got myself into trouble many times because I was known for not kowtowing to every user whim. But I think the users understood that we were a business with longer term goals.

Either way, I didn’t have a reputation that I was concerned about. I didn’t have a position in the consumer Web story. I was CEO of a good business and just made decisions as I thought I should.

Q: Did you have any idea how powerful Twitter would become?

A: You know, to this day, I’ve never perceived Twitter as competitive to Digg. Maybe I’m just deluded. People do get their news via Twitter [and] they talk via Twitter. It’s a communications medium, but Digg is the content. So, in its simplest way, you could consume Digg via Twitter. You could consume Digg via Pownce for all I cared. [Pownce was a micro-blogging site co-founded by Rose in 2007 and shut down in 2008.] It didn’t really matter to me what the medium was. Being a true Web 2.0 leader, Digg needed to be extensible and not overly concerned about the mediums people were using to share this stuff. So we saw Twitter as an amplifier for Digg. Maybe that was short-sighted.

Q: It’s not clear how you could have reacted to it, in any case.

A: Exactly. It’s like text messages or maybe, 10 years ago, like AIM. People use it as a part of their communication and media consumption. In a similar vein, who would have thought that so many people would discover content through Facebook?

Digg could never have been a social network. It could never have been that kind of communications medium. Digg was what it was. And so the question is do you react to it and roll with those phenomena or try to become them? To displace a medium like Twitter was just not what I saw as one of our goals for Digg.