Edgeio $5 million Failure: The Myth of Disposable Startups
Is Michael TechCrunch Arrington’s disarming writing style one of the keys to his success? After all, it is not an easy feat for a Web 2.0 startup blog phenomenon to spin his own personal $5 million Web 2.0 startup failure into an easy come, easy go tale!
Arrington has not disclosed how much of the $5 Edgeio financing he actually contributed. Nevertheless, in placing the Web 2.0 startup that he co-founded into his own TechCrunch deadpool, Arrington fesses up to his personal loss: “I’m obviously sad about this since I was one of the founders.”
Edgeio’s $5 million failure within a short two year period, however, is also a professional loss for Arrington. The TechCrunch Web 2.0 startup blog was launched by Arrington shortly after he co-founded the Edgeio Web 2.0 startup. The TechCrunch credo is “to obsessively profile and review new Internet products and companies.”
In his last TechCrunch Edgeio post, a mere two months ago, Arrington hailed ”Part of my promise to readers is to call things like I see them.” REALLY? In the very same post, Arrington asserted of his own Edgeio, the “classified listing platform has been doing well. We use it for our CrunchBoard job board, and many other blogs and websites have begun to use it, too.”
Arrington confidently reported to his readers on September 30, 2007, that Edgeio “has been doing well.” How is it then that, a mere 60 days later, Arrington reports to his readers his “sadness” in placing the same Edgeio in his TechCrunch deadpool?
Perhaps Arrington did NOT call Edgeio things like he saw them, two months ago. Arrington reveals now:
For the last few months CEO Keith Teare has been working on a number of plans to keep the company going, but none of them panned out.
Even if Arrington’s Edgeio “involvement for the last two years has been as a board member only,” such a role entails knowing that “ For the last few months CEO Keith Teare has been working on a number of plans to keep the company going, but none of them panned out.”
Arrington is shrewdly vague in attempting to explain away the Edgeio shut down:
The company burned through that money according to plan, meaning they ran out this month. The product roadmap was fulfilled, meaning development lags didn’t hurt the company. But the revenues didn’t come in and user/partner milestones weren’t met. And that meant no one else was going to put more money into the company.
Did Edgeio have a business plan, or didn’t it? Did Edgeio have a revenue model, or didn’t it? Arrington’s TechCrunch is famously oblivious to such solid startup fundamentals while it “obsessively profiles” Web 2.0 startups.
Just yesterday, Arrington hailed the no-business-planning-needed philosophy of the founder of another Web 2.0 startup he has invested in, Seesmic.
In Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model I rebutt Le Meur’s cavalier entrepreneurial “advice,” warning it is more harmful, then helpful. Arrington’s Edgeio musings also ought to be taken with a grain of salt:
This is the way the startup world works. You win some, but you lose most. Edgeio wasn’t meant to be a success. And now Keith and the rest of the team can start the fight over again, and hopefully next time they’ll come out winners.
NO, Michael, startups are not disposable. Moreover, without proper business planning in future endeavors, the no-win Edgeio scenario is destined to be replicated.
Hope is not what Michael TechCrunch Arrington ought to be prescribing to startups, even if his own personal startup philsophy is based upon such entrepreneurial nonsense.
Who sees startup planning differently? Draper Fisher Jurvetson, Mayfield Fund, Sequoia Capital…
SEE: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and Want Sequoia Funding? Submit a Business Plan: Here’s How AND Kleiner Perkins Venture Capital: Business Plans Please
WANT TO SUBMIT YOUR BUSINESS PLAN?: Draper Fisher Jurvetson ~ Mayfield Fund ~ Sequoia Capital ~ Kleiner Perkins Caufield & Byers
NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN
UPDATE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss
ALSO: Business Plans Help the Web 2.0 Kool-Aid Go Down and Hey Paul and Fred: Hackers, NOT Startups, Are the Commodity
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