
Dave McClure responds to Arrington's post - marklittlewood
http://500hats.typepad.com/500blogs/2010/09/fire-in-the-valley.html
======
jwr
Having skimmed through that incoherent babbling rant, I know as a founder I
will never want to do business with that guy.

~~~
mattmaroon
He tries to come off as some sort of "angel from the hood". I wouldn't be
surprised to hear him say "yo boyyyyy, I be funding companiez."

His money's as green as the next guy's though.

~~~
Alex3917
Honestly the biggest problem with Silicon Valley is that 90% of the startups
aren't trying to build real businesses, they're just trying to build something
that will impress Mike Arrington to compensate for the fact that they had no
friends in high school or whatever. At least Dave actually understands the
mechanics of leadgen, SEO, margins, and the rest of what makes a business work
unlike the rest of the hacks in the valley.

~~~
webwright
Can't downvote this enough.

Really? All 90% of people who quit their job to found a startup want to do is
impress Arrington? They want the same thing that any founder wants-- a
combination of happy users, business success, and an exit (though there's more
emphasis on the exit for a lot of Valley folks).

Save your venom for people who don't have the guts to start a company. Or
better yet, save your venom entirely. The internet doesn't need any more.

~~~
Alex3917
"They want the same thing that any founder wants-- a combination of happy
users, business success, and an exit."

I'm sure the founders think that's what they want, but their actions say
otherwise. Anyway I didn't mean it to be venomous, I was just trying to defend
Dave.

~~~
zackattack
Would you provide us five specific examples of how their actions say
otherwise? Since 90% of startups exhibit this kind of behavior, it should be
easy to come up with five.

~~~
Alex3917
If I were to start calling out individual companies I'd only do it on my blog
under my real name, not as a pseudonymous blog comment. As it stands though I
wouldn't feel comfortable blogging this only because it's not my idea, I stole
it from someone else.

~~~
crystalis
So you're just impersonating Alex Krupp?

------
juliamae
Since everyone seems to just be agreeing with the last person whose take on
this they've read, think about it this way: If they were indeed colluding, do
you think any of them would come out and say "mike's right, we are colluding"?
No, they would come back with totally legit sounding blog posts to discredit
him.

I still think it doesn't make sense for Mike to lie about what he heard,
especially when it relates to such big players. Mr McClure's defensive,
arrogant, immature rant indicates that a sore spot has been touched. I don't
think we should take any of the angels' words at face value.

~~~
jacquesm
Let's turn that around for a second and look at it as though it is true:

A bunch of 'angels' (for want of a better term, none of them were sprouting
wings) get together in a bar but omit one of the regulars.

They discuss in great detail the way in which they are going to 'corner the
market' and convince each other that nobody will invest in any start-up over a
certain price point.

How long do you think that would fly in the real world. Before they'd been out
of the door someone would have already decided to break the arrangement, it's
the nature of the beast you're dealing with here, and besides, most if not all
of the dealings between angels and their investment targets are confidential
so you'd never know anyway.

I wasn't agreeing with Arringtons view on this when I read it, I just
interpreted it as 'wow, you take being marginalized quite badly', and this
post pretty much confirms that that may be all there is to it.

Hell hath no fury like a 'blogger' scorned it seems.

It's not as though people need Arringtons permission to meet, and it's not as
though every meeting that he isn't in on is automatically grounds for
suspecting a cartel being formed.

~~~
jfager
Earlier this summer when LeBron James decided to go to Miami to play with
Dwyane Wade, there was a lot of discussion over the next week about the fact
that many players have basically grown up together in the countless shoe
company basketball camps and all-everything teams that top recruits go through
these days. The lament was that you don't compete against your friends the
same way you compete against rivals you have some distance from, and it was
starting to affect the league, even to the point where players who you'd
expect would want to carry their own teams instead decide to play together.

~~~
jonknee
There were even accusations of collusion:

[http://www.csmonitor.com/USA/2010/0709/LeBron-James-and-
his-...](http://www.csmonitor.com/USA/2010/0709/LeBron-James-and-his-
superteam-Player-collusion-or-OK)

"Worked out among friends at a "summit" earlier this summer, the James free-
agency move – aired live as ESPN's "The Decision" segment Thursday night – in
one stroke shifted the NBA's power structure and could undermine attempts to
achieve parity in a league dominated by a few select teams."

(I bet Mike Arrington wasn't invited to that meeting either.)

------
btilly
Let me summarize.

"Yes, the meeting described indeed happened. Yes, we talked about what
Arrington claimed we talked about. No, Arrington was not welcome. No, it was
not the big deal Arrington claimed it was."

If it was not the deal that Arrington claimed it was, then why were they so
uncomfortable when Arrington sat down? Why did Sundeep delete his tweet? And
why did people tell Arrington that they were uncomfortable with the direction
the conversation took?

This leaves me more, not less, likely to believe what Arrington reported. The
side evidence leaves me leaning towards the belief that Dave McClure's
judgment is more likely lacking than that there is no fire behind the smoke.
However I have no really concrete evidence behind that position.

It will be interesting to see this play out.

~~~
tghw
I agree. It seems likely that at least some of the people in the meeting might
just be talking about things that would benefit them without fully realizing
that the whole setup and the conversation they were having was actually
collusion. Under that premise, I can believe that both Arrington and McClure
are telling the truth, but only Arrington saw a spade for a spade.

~~~
dhs
... _saw a spade for a spade_

I haven't seen that one in a while :-)

------
kyro
Arrington has said that many who attended this event were friends of his. I'd
think it wouldn't be too difficult to sense a strange vibe and that something
unusual was going down. I've seen Arrington make some big claims (last.fm
handing over records to the RIAA (unsure if that was resolved)), but these are
pretty damaging accusations, and you've got to realize that more than just
page views, there are a few other things riding on this recent piece -- like
the friendships of those he's accused of colluding, general respect among the
angel/vc community and beyond. That coupled with this post, with a tl;dr of
HE's WrONg ANd I WanT TO BE AbraSIVE AnD NOT PROviDE REASONABle LEVel-heaDED
ARGumEnTS, makes me side with Arrington for now, although Fred Wilson's post
does make a lot of sense.

~~~
Mystalic
Frankly, that's more just McClure's style -- to be abrasive and have 9
different colors in his posts.

~~~
crux_
I can't wait until I have enough money to have a style!

~~~
tvon
Can't help but think of:

 _Your shower shoes have fungus on them. You'll never make it to the bigs with
fungus on your shower shoes. Think classy, you'll be classy. If you win 20 in
the show, you can let the fungus grow back and the press'll think you're
colorful. Until you win 20 in the show, however, it means you are a slob._

\- Crash (Bull Durham)

------
DJN
There seems to be a severe case of group think on HN today.

Why are so many people raining on Dave? The points he makes seem to make a lot
of sense.

I'm pretty sure that an agenda that will attract the smartest angel investors
for a meeting will stretch far beyond "collusion to bring valuations down".

The fact of the matter is that owning 1% of a company that exits for $100mm is
far better than owning 10% of a bankrupt startup. These investors know this
better than anyone and I'm pretty sure that increasing the size of the pie,
attracting more startups, increasing the number of exit channels etc were the
chief points of discussion and not "how do we make sure we own 10% instead of
5%".

Having said that, it's pretty much Dave's word against Mike's and I'll pitch
my tent in the proven serial investor's camp any day.

~~~
kingsley_20
Yeah seriously. So much of the criticism is about his style and attitude that
it made me wonder if this was really HN?

Dave is a great guy in person. Yes, he's aggressive, super-cynical,
outspoken,has a sense of humor and a good track record. These are all good
reasons why he's one of the few investors (along with Mark Suster) that I
would actually _want_ to do business with.

------
sprout
>\- startups & investors bitch & moan about price (aka valuation) all day
long, but i don't really give a damn what other people think most of the time.
buy or don't buy. negotiate or don't. This is America, This is Capitalism, and
it's a Free Fucking Country.

I read Arrington's article with a grain of salt, but after that line McClure
convinced me he's up to no good. That is _exactly_ what a colluding price-
fixer would say to defend his actions. The fact that he denies it is
irrelevant.

------
duck
Did anyone else get a headache just trying to read through that rant?

~~~
msy
You know the only other place I've seen where someone uses 14 different type
styles for emphasis is the Time Cube guy and other similar nutjobs.

~~~
tlrobinson
You should see his PowerPoint presentations ;)

------
mbyrne
Request for fact check: If you agree that the definition of collusion is that
"collusion takes place within an industry when rival companies cooperate for
their mutual benefit." Wikipedia.

And you read McClure's post that admits to discussing pricing amongst these
industry competitors: "at the dinner, there was a fair amount of kvetching
about convertible notes, capped or not, hi/lo valuation, optimal structure of
term sheets, where the industry was headed, who was innovating and who wasn't,
and 10 million other things of which 3 were kind of interesting and 9,999,997
weren't unless you like arguing about 409a stock option pricing. However, in
addition to pricing & valuation..."

then how can you not conclude that collusion (which is illegal) did not take
place?

Where is this argument off-base?

------
jhuckestein
Why?

Disregarding all the abusive and offensive language, his points are
unnecessary. He could just as well have written "We are not colluding. Mike
got it wrong. This is what we talked about: ..."

He's leading Arrington's claims ad absurdum and concludes that everything is
horse shit and hater shit and a steaming pile of crap, yo, bitches.

Why is Dave McClure important again?

~~~
j_baker
Just because he does a bad job of making his argument doesn't make it wrong.

------
JoelMcCracken
I could not finish this article. Why does he write like that?

~~~
mahmud
It's a "fuck you and your grammar" style of writing. It might come off as
ghetto at times, but I think it's a deliberate decision to write that way, as
a way to rebel-against or reject whatever that's considered _standard_.

I personally identify with his writing, in a sort of "game recognizes game"
way.

~~~
davidw
What with all the things to read and learn out there, I think I'll stick to
writers who are able to wield the English (or Italian) language to make their
point, rather than those whose web pages look like something from 1998
recounting how their space-brother told them the secret of how to construct a
perpetual motion machine that they cannot build because of the Icelandic
government's mind control rays.

Edit: I'll add that I think Fred Wilson's reasoning is convincing, and written
for the people of planet Earth to boot. Even the original article states that
some of the people were just there to see what's up. If they're already
spilling beans to Techcrunch, the likelihood of managing to get everyone on
board with anything really damaging for any significant duration is small.

~~~
mahmud
Some of the more creative literary figures have taken great liberties with
language, as a whole, and convention specifically.

You might not like it, but I think the juxtaposition of hard-nodes business
insight and MySpace typography is jarring, in a positive sense. He routinely
craps all over the industry.

But what do I know. I am a 30 year old with a mohawk.

~~~
davidw
> Some of the more creative literary figures have taken great liberties with
> language, as a whole, and convention specifically.

Certainly. Is he aiming for "great literary figure" status, though? My guess
is that in 50 years, people will still read the work of "great authors". A
rant about a silicon valley "conspiracy"? My guess is no.

~~~
mahmud
The entire thread has been about Dave and his writing.

How many other investors can you recognize by their prose and style? how many
do you talk about afterward?

I think the point has been made.

~~~
davidw
> How many other investors can you recognize by their prose and style? how
> many do you talk about afterward?

Paul Graham comes to mind:-)

------
pak
Before I clicked I figured it was going to be yet another "Michael is a great
guy but way off base here," and indeed that's pretty much all there is to see
here. Coupled with a lot of fist-pumping.

------
Aegean
why do people need to use so much f _ck sh_ t and d*ck when defending an
argument I'll never understand. It doesn't make it any more influential or
cool, if that's what is intended.

~~~
blantonl
speaking his mind, like he would speak to you in person, is influential and
cool.

~~~
davidw
After a few minutes of someone spouting profanities, you mostly become inured
to it and it ceases to have much of an effect. In some cases you wonder if
it's simply a verbal crutch.

You get a much greater effect if you rarely use that sort of language: when
you do, it's quite powerful.

~~~
nickpinkston
I don't know - I tend to notice that the people who say "smart people don't
swear" are offer people who aren't really that smart themselves - or know many
smart people. I know a lot of smart people, and they all fucking swear. ;-)

~~~
davidw
I didn't say "don't swear". I do myself, and have nothing against it in the
proper context. But if you overdo it, you come across looking like a bit of a
horse's ass.

~~~
sprout
It's very much a mistake to say that given words should universally be saved
for emphasis or used liberally. In most social contexts, there are a variety
of words that can and should be used liberally. In the contexts where
profanity is to be avoided,they tend to be things like "please" "thank you"
and "that's great" or "I'm looking forward to it."

But in contexts where profanity is encouraged, and even a sign of belonging to
a social group, there's no point in being elitist about it. I'm not sure I
like social stratification, but I've found it's difficult if not impossible to
have meaningful social interaction without adopting the social conventions of
those around you.

That is of course distinct from a style guide for an investor writing about
business, who should probably maintain a clear and inoffensive tone to his
writing.

------
alexophile
OK People. Yes, Dave McClure writes like ee cummings' high school geocities
page, but I think I know why:

If I'm a high visibility blogger and I'm going to write a piece wherein I
intend on relaying a point to the people whose opinions I care about, there's
going to be a lot of noise in the responses, no matter what. More often than
not (and this happens on HN too) you get people giving long-winded, zero-
value-added answers in hopes of being a part of the discussion.(edit: yes,
this post kind of falls in that category, but I'm writing it anyways)

Writing something you want to talk about underneath a bunch of stoff that's
easy to jump on is a good way to flag the worthless posts.

For instance, I might start off a blog post about how the White Stripes are
shit. They are not good and they are certainly not ushering in a new era of
anything. What I really want to talk about is how they got famous because,
somewhere along the line, Rolling Stone started bottling their own farts. So
then, if I get 100 responses, I can skim past the ones that amount to "OMG The
White Stripes are like the best band EVAR! [personal attack] [grammer
correction]" and get to the meat of the discussion about what happened to the
zine touched by the minds of Hunter Thompson, Lester Bangs, and Patti Smith.

Also, I think he likes to give the impression that he's too busy and important
for things like style. And, as far as I know, that's true, so I'd just let him
get away with it and look what he was actually saying.

~~~
steve19
_"Also, I think he likes to give the impression that he's too busy and
important for things like style."_

His blog post looked to me like he spent an awful lot of time messing around
with fonts and embedding videos.

Not spending time on style, grammar or spelling looks sloppy, but
intentionally making your writing look like horseshit comes across a lot
worse.

------
invisible
So Mike does some investigative work and finds something amiss, people flock
and agree (which I still agree) amid some suspicious actions online, then one
of those involved deny anything amiss in a horribly written blog post and
everyone says, "Oh, Mike, you're so wrong!"

Really? Yes, 10 people that are purely angel investors and no one else get
together to discuss "stock options" and pretty much give Mike a big F-U when
he shows up and jokingly says stuff about sitting down for a drink. This guy
doesn't even deny that Mike showed up and they all were silent: that alone is
worrisome to me. Furthermore, Mike lead us to believe he got this information
from a few of those attending: not anonymous sources as some try to portray.

------
tyng
This is pure rant, not much content.

But at least McClure is coming out and identifying himself as one of the
people attended the meeting.

I wonder where and how this battle is going to end, both sides are equally
powerful players.

~~~
jacquesm
What battle? To me it's all smoke an 0 fire.

~~~
tyng
Well, the battle between media accusation of 'colluding' and super angels
asserting they are doing good for the valley.

Arrington definitely burned lots of bridges here to post this story out. While
I'm not sure how credible his sources are, I envy his courage.

------
rsbrown
Mr. McClure's hyperbole about goon squads aside, his public assertion about
the nature of the meeting holds a lot more water for me than the frantic
whisperings of anonymous sources.

------
kemiller
Anytime a bunch of people who sit on the same side of the table, economically
speaking, get together, even socially, it's some flavor of collusion. Just
forming social ties with people you should be in competition with is a little
suspect. That doesn't automatically mean it's cartel-building, but it's not
good news for the rest of us.

That said, is this a surprise to anyone? VCs are already groupthink-y enough.
It is the natural behavior of oligopolies (de facto or otherwise) to seek to
erect barriers to entry, and fix prices. We here operate in a sector that is
still so wildly dynamic that we have better tools for breaking through that
than begging the governmental leviathan to do it for us. We're faster, and can
hit harder.

------
nchlswu
This is just me, but I find this response entirely unnecessary.

I think everyone in that meeting should have just kept their mouths shut.
Admittedly, there are a bunch of reasons not to. A brief, to the point
statement would have sufficed (Like, say a Tweet, or 2). Regardless of
personality or writing style, the post seems a bit over the top.

But then again, I don't know/follow the guy, so it's probably standard fare.

Regardless, his excessive, contrived hip hop/"ghetto" attitude is quite
annoying and setting your Twitter display to a bin38 logo says enough to me.

Edited cause I missed a word.

------
charlief
You figure he could be a little more professional. I guess a strategy for
managing reputation risk is swear like a sailor in response to criticism and
always ignore any specific concerns.

------
joecode
Having met Dave, I can say he's one of those people you immediately trust. The
guy is set financially, and is only is the investment game for the fun of it.

And yeah, his style is bizarre, but that's just the way he likes it.

Anyway, if he says this is all much ado about nothing, he's almost certainly
telling the truth.

------
bond
Well, it seems Arrington was right...

------
jacquesm
I think that balloon has been convincingly punctured.

There is a hint of the old English society in there, where who would get
invited to which parties mattered almost as much as what was actually
discussed. (not to mention the seating arrangements).

Mike being sore for not being invited to this particular get-together is
something straight from the 1890's, he's interpreting it as one of two things,
either TC (and his person) is irrelevant, _or_ there is something shady going
on.

It can't be the former, so it has to be the latter.

A bit paranoid maybe.

~~~
statictype
Why would he be sore about not being invited? He's not an investor. He's a
journalist/blogger.

~~~
jonknee
Ego. He wasn't just not invited, but not even welcome for a drink. Normal
people wouldn't have tried to crash in the first place, but Mike isn't normal.

~~~
jacquesm
Maybe they didn't want to read about their talk in TC in the morning so they
decided not to invite him.

~~~
philwelch
Well that sure seemed to backfire.

~~~
jacquesm
Yep. Damned if you do and damned if you don't.

------
david927
Dave: when you're talking about the changing world, your tone smacks of
bravado and is refreshingly blunt. But when you're responding to somewhat
serious allegations, that same tone comes off as Vicky Pollard.
(<http://www.youtube.com/watch?v=uLd3-cfLlvU>)

My humble advice? Have jeans and a suit; know when to wear what.

------
danielnicollet
Reading this post and Arrington's yesterday, I am starting to wonder about the
meaning of the word "friend". If these guys are really all friends, maybe they
ought to turn to their enemies because I wouldn't want friends like these as
my own enemies ;-)

------
onan_barbarian
Anyone who starts a post with "Unfortunately i probably have more balls than
sense" is worth reading, if only for laughs. The typography and grammar leave
a lot to be desired... but I'm in two minds about the content.

It's possible that this is a case of multiple perspectives, multiple
interpretations. Some insiders think they're sitting down for a bit of
kvetching, others think it's heading for a cartel (and blow the whistle). It'd
be interesting to hear the perspective of a few of the other people around the
table, especially the ones who tipped off Arrington.

Is there any other informed reaction to this stuff out there? Anyone else 'at
the table' who's commented yet?

------
robryan
Yes it is his normal style I get that but given the amount of attention the
post was going to get, and the likely way people reading have taken the
situation you'd think he would have toned it down a little.

------
dangero
Anyone else notice the lack of denial of the wiki that Arrington spoke of?

Don't you think you'd mention there was no wiki if there was no wiki? There
must be a wiki with something on it.

------
jamesshamenski
I can't think of a time when Arrington was seriously wrong. His leads get in
way before the news breaks and his stories have even altered what was to be
announced.

I doubt Mike just made this all up. Especially how everyone in that room has
feed him stories for the past 5 years. Do you think Mike (a lawyer) would seek
legal advice unless this was real.

Funny enough, both sides of this story are trying to win over startups! Either
way, we win.

------
balding_n_tired
Not enough colors!

------
danielnicollet
All this drama begs 2 questions from my POV: Are we seeing the end of the net
startup ecosystem as it's been since Netscape? Is this happening because too
much transparency, too much blogging, tweeting, and spewing your guts publicly
all the time only creates negative emotions: jealousy, fame obsessions,
arrogance, hate?

------
chegra
I'm trying to figure out who this was aimed at. Was it Mike? Was it PG? or Us
the readers? Who is hating on Dave?

------
adrianwaj
Here's how the next Arrington/McClure interview will pan out:

-

Arrington: Did you order the (code red) meeting?

McClure: I did the job I ...

Arrington: Did you order the (code red) meeting ? [shouting]

McClure: You're God damn right I did. [shouting]

-

A Few Good Men. <http://www.imdb.com/title/tt0104257/quotes?qt0470412>

<http://www.youtube.com/watch?v=AOYGbM3nK9k#t=3m59s>

------
ax0n
McClure's post looks like the emails the whole company used to get from my
menopausal VP back in 2001.

------
Charuru
This is a necessary denial. Why did Sundeep delete his tweet? He should've
also made a denial.

------
aneth
I know McClure somewhat personally, and while Arrington's speculation was fun,
and I'm sure many investors are trying to counteract YC's strength, I think he
is an upstanding guy, and one of the most honest, cut to the shit people in
the valley.

~~~
bl4k
I think it was established yesterday on Quora that McClure was actually
Arrington's source on where the meeting took place, and judging by the
language in Arrington's post - that same source was also one of his post-
meeting sources, so it might be him again.

McClure was in the TC office right before this dinner took place.

~~~
aneth
So you're saying he's playing both sides? Wouldn't Arrington have called him
out on that? I don't know the quota discussion you are referring to.

------
ahoyhere
Isn't the real question: Does he get results? That's all HN cares about,
right? Not the outer trimmings?

------
lzw
I'm at a complete loss as to why presumably intelligent people pay attention
to technophobes like miek Arrington. It was obvious to me many years ago that
lacked integrity.

McClure and Paul Graham, for instance, are people who I disagree with on at
least one subject, but they have integrity. I cannot say the same for
Arrington. He seems to be pathological to me.

~~~
alttab
He runs a business, and he tries to keep it relevant. A SV blog about start-
ups that has to come out with 5 blog posts a day? You're going to run out of
things to write about... why not create them?

I personally haven't dug deep enough into any of the flame-baity stories of
tech-crunch, but considering more than half of them have typos, grammatical
errors that make it difficult to read sometimes, little or no substantiated
FACTS, make it all seem like gossip. A Tech-TMZ if you will.

It seems like they crank those stories out so fast they don't even bother to
proof read them. _Some are starting to believe they don't bother to stop and
evaluate the merit of the story to begin with._

Techcrunch is only relevant because enough people go there to _GAWK_ at MA's
posts. Any of the legit stories are on other news sites within a day, usually
better written and with more information. Its obvious that TC can be an armpit
sometimes because it has the most stories written about itself.

I would be willing to entertain the idea that even if Mike was on to
something, his reputation and execution on this story is like the boy crying
wolf for real but no one takes him seriously anymore.

~~~
alttab
Don't understand the down votes - look at what other people are writing about
this story on their blogs and in the comments. My sentiment seems to be
adopted widely.

God forbid someone on HN evaluates TechCrunch.

------
dirktheman
Agree. It's nice to see what goes on in the backrooms of SV. And whatever Dave
was on, get me some!

