Posted on September 8, 2008
Filed Under Web 2.0 Kool Aid |
Updated: information below about the involvement of Michael Arrington’s business associate, Keith Teare, with a TechCrunch50 startup.
In his attacks on DEMO, Michael Arrington made it clear that he believes DEMO to be unethical because it charges presenting companies $18,500.
The insinuation has always been clear: DEMO is exploiting startups whose founders are typically working with limited funds and who could put $18,500 to work in far more productive ways.
TechCrunch50, on the other hand, because it’s free, gives poor, hungry unknowns the opportunity to launch in front of a huge, well-connected audience without paying a dime. This, of course, is an opportunity DEMO cannot offer because of its price tag.
Arrington’s position sounds very egalitarian but a reader of The Drama 2.0 Show emailed me today and pointed out something I too had noted - there don’t seem to be a whole lot of poor, hungry, young founders presenting at TechCrunch50.
Take - the corporate Twitter clone. Yammer was developed for internal use by a startup named Geni. You might recognize that name because it’s been featured and mentioned on TechCrunch more than a few times and has raised over $10 million in funding at an exorbitant valuation.
Geni’s CEO, who unveiled Yammer, is none other than David Sacks. He’s a former PayPal executive who’s close with Peter Thiel and who invested in Facebook. Poor guy.
Is this the type of young, hungry unknown that Arrington had in mind when he conceived of a TechCrunch conference? Certainly I would argue that Sacks is quite capable of launching Yammer on his own without the help of a friend in the blogosphere.
Of course, Yammer is not the only company at TechCrunch50 that can afford a measly $18,500.
Ashton Kutcher of Blah Girls needs no introduction.
Shyrk’s founder Scott Klososky has been the CEO of three startups, one of which he sold part of to Silicon Graphics.
Tweegee has already raised $2.5 million and its CEO, Shay Bloch, was responsible for “building, launching and leading the innovative biggest kids portal in Israel, Tipo (http://www.Tipo.co.il).” It too had a .
Hangout Industries has already raised $6.5 million. Its CEO, Pano Athos, “has spent more than 22 years in the technology industry, during which time he founded, launched and led the strategic growth of three tech companies: ClearCross (previously Syntra), EcoNovo and Pantero Corp.”
DotSpots is founded by Farhad Mohit, who is a founder of BizRate, which also launched Shopzilla. The company was sold to EW Scripps for $569 million in 2005.
Ångströ is Dr. Rohit Khare, a technology industry veteran, and Salim Ismail, an angel investor who “has operated seven early-stage companies.”
LiveHit’s founder and CEO is Jeanine LeFlore, who was formerly the VP of Products and Marketing for Piczo, which has raised 8-figures worth of VC funding. Prior to that, she worked for Yahoo and AOL.
Quant the News is founded by Brett Markinson, who “has been a real estate, private equity and markets investor for over 20 years.” He’s listed as a partner at Lagovent Ventures Group, which has conveniently invested in Quant the News. Coincidentally, Quant the News’ other investor is listed as Matt Coffin, who happened to be a member of a TechCrunch50’s panel on angel investors.
Interestingly, Quant the News appears to be Markinson’s second attempt at building an innovative service for investors and during “The Role of the Angel Investor” panel, Coffin mentioned that he invested in Markinson’s first attempt, MarketProbability. Doesn’t look like that has turned out so well but hopefully with the help of TechCrunch50 the second time will be the charm.
In case you haven’t figured it out by now, conspicuously missing in action on stage at TechCrunch50 are young, hungry founders with little more than an innovative product and big ambitions.
No Sergeys and Larrys, no Stephens and Chads. Just middle aged men, veterans of the business and “serial entrepreneurs” who have slept with more companies than Madonna has men and women.
I can only assume that the hungry 20-something poster children Silicon Valley loves to promote have been confined to the DemoPit where adult supervision was present.
In any case, one need only look at the pedigrees of the people behind today’s founding companies to realize that TechCrunch50’s egalitarian model is not very egalitarian in practice because the companies chosen to present (some of which make for curious choices) aren’t the type of startups that Arrington pretends TechCrunch50 was partially designed to benefit - those whose bank accounts either didn’t have $18,500 or couldn’t afford $18,500.
Instead, most are startups created (and in many cases already funded) by people who are either part of the Silicon Valley establishment or who are quite familiar with Sand Hill Road and its side streets.
The disappointing products launched today reflect that all too well.
Update September 10, 2008: thanks to a tip from a commenter below, it is worth pointing out that Michael Arrington’s associate Keith Teare is officially involved with one of the TechCrunch50 finalists, Fotonaut. Teare has been described as Arrington’s “longtime associate and mentor” and was the CEO of edgeio, a failed startup he co-founded with Arrington. Valleywag this conflict and notes that Teare supposedly also owns a stake in TechCrunch.
In the final analysis, it’s worth asking: is it merely coincidence that the TechCrunch50 finalists are primarily made up of Valley insiders? Are members of “the network” that much better at creating “good” startups?
Not likely, especially given the fact that many - if not most - of the Valley’s biggest hits were created by first-timers and unknowns. The only conclusion a reasonable person can come to is this: TechCrunch50 appears to be a nepotism-based conference, not a merit-based conference.
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