Well, three startups have spun out from employees who left, two acquired and (shameless plug ahead..) one making revenue from day 1 and growing like gangbusters.
That seems too simple. Why did they get so close to an acquisition if the VCs were steadfast against the sale?
The TC article implies the Xobni team pulled out, over concerns about the product & team's future within Microsoft. If that's true, I'm confused as to why they built an Outlook plugin to begin with.
It was always a strange company, driving more by marketing than by product. I dislike these type of companies that fall into the vulture grasps of people looking for a massive exit. It's just another form of speculation - with the value being created just a side-effect of the financial games.
"I distinctly recall people being excited by the product."
I think it's more that people were excited by the promises about the product, and what it could have been. I've tried it 4 or 5 times since it launched, and always uninstalled within a few days. And I'm a heavy Outlook user, searching mail is a serious pain point for me.
They too often focus on 'non-corporate' (basically, useless) features: social network integration, counting who emailed you the most and other stats, ... while the actual UI was hard to use and not in line with the rest of Outlook, searching only selected folders was only included after a long time (I don't want to search my RSS and mailing list folders, I don't think I'm special in that), sorting/filtering/search in search was unintuitive to use, ... It always felt like the features were put in to look nice in a marketing pitch, and that nobody at the company actually actively used the product. I guess that's not the case but it felt that way.
Back when I wore my journalist hat I once got curious about one of these stories. I did the leg work and tracked down sources and dug up financial statements. I had imagined some tale of boardroom intrigue and secret back-room deals, but really it was just big egos and greed and inexperience. It was kinda depressing. I never wrote the story.
What was Xobni's plan after turning down Microsoft's offer? Making > $20MM selling $40 software seems pretty unlikely.