This, in my opinion, is what the metaphor of not reading TechCrunch stands in for. Each article celebrating a round of fundraising has a backstory about an entrepreneur who has less ownership of their company. Often that backstory is that they have less or even no control.
Jobs took outside funding. Gates did not. Both acted like jerks in the 80's. But nobody could fire Gates because nobody had the shares to bring in an outside CEO to Microsoft.
Fundraising is a two edged sword. It should often be accompanied by both congratulations and condolances.
Bill Gates was the son of wealthy parents, his father was a partner in the law firm Preston Gates & Ellis, his mother was on board of directors for First Interstate BancSystem and the United Way.
Bill got a sweetheart deal from IBM, in part due to his mother serving on the United Way board with Jon Opel, chair of IBM.
Steve Jobs was adopted by Paul Jobs, a mechanic and a carpenter, and Clara Jobs, who was a payroll clerk for Varian Associates. Neither of his adoptive parents had the opportunity to attend college.
Jobs sold his minivan and Wozniak sold his HP scientific calculator to initially fund development of the Apple I.
If you have the option of being born to parents with extreme wealth and connections, I highly recommend it over fundraising.
Jobs had the good fortune to be raised in Silicon Valley. Had he been in Topeka, there would not have been a viable market of hobbyists for Apple I kits. Then again, he wouldn't have known Wozniak who actually built the damn thing, either.
Luck played a factor in the fortunes of both men.
The funding of Gates and Jobs is a parable. The extended version includes the prodigal son's return.
You can have a great viable market and if you don't have the money to build the widgets, you are stuck pounding sand.
BTW if Wozniak hadn't met Steve Jobs, he might have spent the rest of his days working at HP, being one of hundreds of brilliant engineers nobody has ever heard about.
Woz is many things, but he is not --and was never-- an ambitious corporate leader. Wozniak built the Apple I and Apple II but it was Steve Jobs that built Apple Inc.
He took advantage of his connections and built one of the biggest, most influential software companies ever.
He then stepped back at the height of his career, listened to his wife, and the two of them built a very innovative philanthropic organization.
There are plenty of rich kids that don't accomplish anything, Gates wasn't one of them.
Also, Gates was building a software company and Jobs was building a hardware company. Jobs had a lot more need for funding in the first place since his capital expenditures were higher.
Finally, Mr. Jobs made almost half a billion off of Apple in the 1980s (yes... 1980s dollars.) I hardly think that Apple is some kind of parable about how VC funding is a bad idea. Quite the contrary.
Just a minor error. Microsoft did raise a vc round before they went public.
It doesn't really affect your point as the control given up was pretty minimal.
Techcrunch was my main example. A great resource, but needs to be absorbed with the right amount of perspective.
The next Microsoft is very unlikely to be a YC company because YC purchases meaningful equity upfront and its template is built to serve the needs of venture capital, e.g. demo days and more recently, convertible notes.
There's nothing wrong with that. There's nothing wrong with removing the beer goggles and acknowledging it, either.
Its unfortunate that TC can only validate companies based on how much money they've raised..
Jobs got the best kind of getting fired possible, though. He walked away with half a billion dollars, which let him do whatever the fuck he wanted with the rest of his life. I've never had a job where I wouldn't resign on the spot a $500 million (or, fuck, even $5 million) severance check. I can't imagine that it being "my" company would change that. Once a company is large enough, it doesn't really belong to one person anymore.
The reality of business is that, as the thing grows, the Iron Law of Oligarchy kicks in and it becomes less "yours". That happens regardless of capitalization structure. Complex entitles are just not, under normal circumstances, controllable by one person.
The bad deal is when you take money for the business (i.e. not personally) and lose control.
Analysts, pudits, and others with a keyboard and an IP address have been calling for Ballmer's head for years. In vain, because Ballmer is the second largest shareholder after Gates. Capital structure matters a great deal.
Ballmer's last transaction was 11/23/10. Hence, his name will not show up in data generated that way. In 2010, he sold 12% of his stake for about $1.3 billion. He's probably not hurting for cash.
Fidelity reports his ownership here: http://eresearch.fidelity.com/eresearch/evaluate/fundamental...
The size of their holdings might make it somewhat harder to mount an "attack", in that there are no small group of large shareholders that would be able to vote a majority on their own and so any attack would require gaining the support of a large number of smaller shareholders, but he's certainly not immune from being ousted if he's actually so disliked by shareholders.
Even if you are a CEO with total control, there are information problems that limit your true power. Sure, you have lieutenants who will furnish you with the answer to any question you desire-- biased and dishonest information. I heard someone once say that the hardest thing about being a CEO is that "everyone is fucking lying to you" and that sounds about right. I would add "... and wants your job" to that.
People talk about "giving up control" as if it were a loss. Even if I built the business from the ground up, I'd rather have control of my life than the business. $10 million would mean that I own my life instead of renting it from a boss. Selling control of a corporate entity and code for someone else's use is easily worth that, from my perspective. I now own my life, you now own (partially) a couple years of my work... seems like a fair trade to me.
Mentioning the Iron Law of Oligarchy in a comments thread about Techcrunch and fundraising gets you a vote up from me.
For those who didn't study sociology or political science at some point, the Iron Law of Oligarchy describes the apparently inevitable tendency of organizations to centralize power towards leaders by a process of increasing bureaucratization, decentralization and specialization. It was developed primarily to study political parties, but it is believed to apply to all organizations.
In other words, a fractal (self-repeating) organization.
TechCrunch is powerful because it has a nut-hold on the cheap votes. The same goes with the prominent VCs who lead the herd.
The best you can do, often, is to create genuine competition among the oligarchs. Then there is a real market for talent, which often comes from the common people (the demos) and this means that the oligarchs can't treat them too badly, because pissing on the people is a sure way not to be able to recruit talent when you go to war against other oligarchs.
That's one thing I dislike about VC-istan. Rather than competing with each other, the VCs talk to each other about who's hot, who's not, and what kind of terms to offer. So you get vertical competition (class warfare) instead of the horizontal kind.
Unless you're interested in startups generally.
Or if you want to learn about new companies.
But really only if you're interested in learning about hot new spaces in trends, yea then it's ok.
Or if you want to see what external thought leaders have to say, reading on the weekends is ok.
But don't read it for funding.
Unless you're looking for funding, then maybe it's ok to read it to help you narrow your investor pitch focus by seeing who is active and wear.
But certainly don't read it for product. Yeah, that'd be stupid.
Unless, and only unless, you want to see what early adopters who see more new products in a month then most people do in a year have to say about new technology, trends and spaces.
On second thought, yea read TechCrunch.
Just be a good enough entrepreneur to know that reading or not reading TechCrunch won't make or break your company, and is a really lame scapegoat.
The only thing that will make or break your company is you and your idea.
> Unless you're interested in startups (that Arrington has a personal stake in) generally.
> Or if you want to learn about new companies (that Arrington has a personal stake in).
I'd expect any aspiring entrepreneur to understand the benefits and trade-offs of the different models for raising funding in the way I'd expect anyone looking for thousands of dollars for anything to understand the strings that are attached to it.
The real problem with TechCrunch is that it operates in an unclear space between journalism and PR (even more than usual) which makes everything on there questionable.
However, I look at TC as more of a gossip rag than a real tech news blog. When I want some dirt on some startup, I'll read it. When I want something with more substance, I'll read Wired or Ars Technica.
http://i.imgur.com/1lgnC.png Yep that's me. I was in deep.
TC is both good & bad and a LOT of things to different people:
1) TC is for people who dream about becoming entrepreneurs and are seeking reasons or a "push" to motivate themselves to finally dive in.
2) It's a platform for validation and lifestyle glorification (what Fox News is to Republican party). It can lead to both encouragement and ignorance. It's highly Silicon Valley oriented and its addicted readers are mostly wanna-be-entrepreneurs (myself included, no shame here) who wish they were in Silicon Valley working on a startup. The same way celebrity wanna-bes browse celebrity sites all day, wantrepreneurs (like me) would browse Hacker News, Tech Crunch, Digg, and (the old) Reddit. Even though you couldn't be there in "the action" you could read about it and pretend and daydream. Pathetic but hey, emotions are emotions.
3) After a certain amount of time Tech Crunch becomes unhealthy for you. It portrays an extremely unrealistic view of startups, companies, and success. And ingores everything else. Because failure is a journey that can lead to success and all things by default fail, glorifying success is damaging to entrepreneurs. TC is great for initial motivation but afterwords if you don't let go of it you'll start to take on its unhealthy attitude towards business. It's like getting a 12 year old fashion loving girl a subscription to Vogue, it might be encouraging at first but if she falls in too deep she'll start taking on Vogue's obsessions. Before you know it she'll be 40 pounds underweight, with bleached blonde hair, and $12,000 worth of shoes.
4) TC over-rewards VC funded startups and ignores inventors, designers, hackers, projects, bootstrapping, and non web businesses. To Techcrunch, success is getting funded or acquired. It focuses on the end-product not the journey. And for entreprenuers that's just a trap for perpetual day-dreaming. Fantasizing about success without ever working towards it.
5) TC is also a status symbol and oligarchy. OMG you got on TC!!! Holy Shit you're going to get so many users and VCs are going to call you and your server might crash... Piss off Arrington and you'll never be on TC. To be on Tech Crunch means you have been approved and accepted by an elite group of Silicon Valley journalists who can make you famous. Once Arrington & friends left after the AOL aquisition there was no more elite group to seek validation and fame from. TC went downhill in popularity and visitors.
I feel like TC was initially designed for investors with its generic "who got funded" articles but was later re-purposed as a lifestyle glorifier. Which lead to a jump in traffic, Arrington becoming the Godfather of Silicon Valley reporting. And TC transitioned into a fame-machine. Got acquired by AOL. Arrington left, friends followed. No more elites, just a news site now.
FYI: I left TC long ago when I outgrew it. The initial encouragement wore off & I wasn't getting anything out of it. I've started outgrowing Hacker News as well. I finally dove in, risked $2,000 made my first 2 products, and am selling them on Ebay. http://www.ebay.com/sch/purplevioletka/m.html?item=330829651...
For those who feel that are outgrowing HN, I'd recommend reading only those posts with more that 150 upvotes:
A more appropriate title would be the second last line of the post:
> It’s good to have context but becoming obsessed and consumed with what TC and other startup blogs and websites report on is problematic.
But that would have made the post a whole lot less interesting and click-worthy.
Complaining about the content of Techcrunch is akin to complaining about how pornography portrays women. In both cases they are low barrier to entry markets, with a group think driven customer base. TechCrunch is the way it is, because it gets the most page views that way. If it starts deviating off that path into the kind of content 'you' (and by you I mean the critical thoughtful reader) might like, well it is quickly corrected by the connoisseurs of startup porn. TechCrunch has no more control over the editorial direction of the web site than the Government accounting office has over the budget.
Phil Lemmons used to run Byte magazine, waaaay back, and it was the 'cool' computer magazine that was above it all. Except it was slipping into becoming a magazine about the IBM PC and its compatibles. I complained, others complained, there was a unity of concern. I got to talk with Phil at the Byte Magazine booth at the Comdex show in Las Vegas and he explained that editorial control was a slippery thing. You could push against the 'bulk' of what people wanted to read but you couldn't push so hard that you left that audience behind, to do so was certain death, so he spent his time putting in enough PC articles to keep the 'bulk' and the other articles to keep the 'faithful'. It was an interesting balancing act.
A web site like TechCrunch is in an even more precarious position, people don't even pay to subscribe. So they are very much at risk of losing their readership if they stray too far from what they want. They can try to lead them, but ultimately they are at the mercy of their readers.
What this means is that complaining about Techcrunch's Editorial direction is not as powerful as starting your own web site (or patronizing one you like) which is more to your liking.
You'll get a broad overview of the days tech news, without the fluff or bias of an individual news site.
I stopped reading TC a few years ago. However, you made a very interesting point about focusing on your own context and not benchmarking w/ other startups, wise words.
The reason raising money is such a dominant info is because it is considered as an indirect proof of business soundness. What other objectivable info could be you use for that ?
Regarding a problem of focussing and keeping delivering, TechCrunch can't be blamed for that.
I believe that everyone regardless should read widely and as widely as possible, but for entrepreneurs and technologists I believe it is part of the job description, too.
Extremes are almost never the right thing. If you're fat, is it best to cut out all fats from your diet? No. If you're info-overloaded, is it best to cut yourself off from the Internet? No. If you're interested in startups, should you read TechCrunch and forget everything else? No!
If you're feeling a bit too tied up with keeping-up anxiety from following slightly glorified versions of other startups' progress, is it best to cut yourself from what can be a useful and valuable source of content?
I say no - just moderate and keep it broad and wide, like everything else in life.
I also like to avoid Pandodaily as much as possible. Is there a HN extension that can filter out these submissions for me?
TechCrunch may provide misleading information for some. But when you're in a "startup" situation, you know will know what is right and what to believe in.
On other side, TechCrunch may mislead you, but they can be a good source of inspiration. They are talking about acquisitions, fundings, and successes. Why not use them as your inspiration? Strive hard, to achieve those.
- do, build stuff 80% of your working day,
- meet other likeminded people 15% of your working day,
- and read online resources like this one 5% (TC is rather one of the bad ones)
There's a clip with David Simon (The Wire creator, former editor of the Baltimore Sun) arguing with Ariana Huffington about the legitimacy of HuffPo's encroaching empire.
I still give it a look every couple of days to make sure I haven't missed anything but I certainly don't value it the same as I used to when the old team were there.
Stopped following their feed, once I came to the same conclusion as the OP: being overly funded is (almost) the only way to go get featured on TC, these days. The times of roaming the edges of startup-land and posting about the nitty gritty startup struggles are long forgotten.
I wish people weren't so obsessed with celebrity.
Raising money is not remotely and end result but is clearly an important milestone for a growing business.
A few of my posts on HN on that:
https://news.ycombinator.com/item?id=3538189 - that was an year ago!
Damn. That's pretty inexcusable!
The first one was here - http://techcrunch.com/2012/11/30/why-enterprise-apps-are-mov.... The third subheading originally read "Transitioning Developers From HTML To Java."
The worst part? These two articles aren't even by the same author. So TechCrunch has multiple writers that don't know the difference.
Although TC sometimes feels like a tech-tabloid, I do believe it serves a better purpose.
There's a lot of value in keeping a pulse of what's going on. But you need a filter ...
They used to only have about 5 articles a day, and then only post the next day.
Once they removed that limit I stopped. I use that filter on most sites except for HN.
Ironically, TC has hired away several VB writers.
For example, if you think velvet-rope parties at SxSW are a good thing, you're not a technologist and you don't belong in this century. Technologists want to make the world inclusive and prosperous, not exclusive and shitty.
I attend a lot of entrepreneur events, Startup Weekends, etc and one of the common threads is the navel-gazing or me-too startups. If I have to sit through yet another "social sharing for X" or "group-curated Y" presentation, I'm going to kill someone.
They focus on the follow-on startups and think "because so-and-so did it, I can too!" instead of actually looking at the problem and trying to understand it. They appear to be startups for startups sake.
If you read TechCrunch as if it's the center of the world, it's easy to get into that mindset. Instead what you have to realize that it is a tiny piece of the whole world and will never cover 99.99% of the startups out there who are solving major life-changing, make-everyone-rich sorts of problems.
Go out, kick ass, and don't worry about what that 0.001% of the world is up to.
I saw this mentality when I went to a Mountain View meetup (for a semi-related hobbyist group). One young woman there was a nurse (or related medical professional) and announced that she wanted to get involved in a startup, and could someone point her in the right direction. Immediately a group member asked her what kind of start up and she looked completely surprised by the question and said "something in medicine ... front ... end?"
I've also gone to a Startup Weekend where something like 95% of the ideas were things I had literally thought of myself already but dismissed long ago because of obvious problems, or that the proposers couldn't answer the most basic questions about. When it came time to cast our three votes, one of mine was basically to say "not really exited by this, but ahead of virtually everyone here".
People will be people and technologists are no different. I have no doubt you will find some that want to be exclusive.
Now everyone is like "grow a beard and get back to the basement damnit"