I got the feeling that despite being somewhat different to tumblr they were on somewhat of a race with them. They were losing that badly so they kind of reinvented with spaces. I think the tumblr model is certainly more mass market and on the absence of a business model that is turning in more than probably cents per user per year your going to need a crazy large userbase.
It really does make me want to take a run at getting the platform from Twitter, if they are in fact going to close it down. I've got the perfect name to rebrand it with, far better than the Posterous name.
Twitter might see serious tax benefits from shutting it down after the acquisition unfortunately. To them it might be worth more dead than alive.
Obviously the founders knew otherwise. They saw how difficult it would be to go for the long haul, and calculated it would be better just to take the Twitter job offers.
It'd be the first time founders were wrong, right?
Obviously once Posterous took the A & B $10 million in venture funding, their clock was seriously ticking. The founders no longer had real control over the company or its future. It wouldn't surprise me if they were diluted down to 10% or less ownership each, which wipes out the incentive to continue with a situation where you're going to see nearly zero payout due to VC terms unless you build an absolute monster company.
No matter what they did, due to the VC they took on, they were unlikely to have a long term time horizon unless they were 'beating' Tumblr. It was get extraordinarily big or go home, because apparently #500 wasn't big enough.
So they bailed, and it probably made perfect sense for their situations.
Although this is just a subset of their total traffic, they were consistently doubling traffic every 4 months or so.