1) interesting content which isn't directly relevant to your business. They write a good blog, but it's always going to be an arm's length from your real business. Either you mislead users about where the content comes from, or you're up front and people realize that he blog, while good, doesn't really reflect your business.
2) the company doesn't really have bloggers for niche enough specialties to be interesting. You end up with a broad, lookalike blog that could have been written by anybody. This stops customers from engaging with your company.
The correct answer is what New Relic does with The Daily WTF; sponsor an established or up and coming blogger. Make the relationship clear. Users will appreciate your funding interesting content, while understanding that you didn't create it. If you align the audience of the blog with your customer base, I think you could get the same effect without the middleman.
Edit: this definitely seems to fall into category two. Their example posts are overly broad and not very engaging. Lots of link-baity, list-format titles which will drive eyeballs, but ultimately have poor conversion. I'd be interested in any case studies that prove me wrong, thugh
IMO content and automation never belong in the same sentence together, unless your only goal is to fill in SEO content of which you aren't particularly concerned about the quality. If you're a startup concerned with your image, I don't think you want to be in that game.
You can't automate quality. It's impossible develop high-quality media without constant, transparent communication and editorial oversight. Especially if you're trying to do it cheaply.
If you're a big-budget brand with that wants to trade out banner ads for thoughtful content marketing, hire an editor with real journalism experience, then hire (or contract) the best journalists you can afford, with the biggest social media followings. This is why Red Bull, American Express, and Gilt Groupe kill it with content marketing, meanwhile you and I have never clicked "Like" on an auto-generated blog post from a random startup. The only way you'll compete with media companies for content-share is by beating them at their game.
That can't happen "automatically."
You're basically distilling a blog post down into a premise and high quality writing. A lot of what makes technical, corporate blogging effective is content and honesty, which are much harder to outsource.
What would be more interesting to me is a proofing service where the content is entirely the actual owner's, but the voice and style are tuned by a professional writer. This would smooth out some idiosyncrasies (for better or worse) and make a corporate blog more approachable for customers, without compromising on quality. I imagine most people let their blog posts ferment for a few days, maybe weeks, before releasing them. Outsourcing the polishing and reflecting period would speed things up without cheapening the whole thing.
Having a small, paid audience of writers who also have a technical background to assess posts before they go out would be another way to take it.
Regardless, I suspect you guys will still kill it because there is a need for this in places where they would normally hire an intern to write the blog. Good luck!