Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss
What are the startup lessons to be learned from failed Edgeio, the $5 million VC backed classifieds play that Michael TechCrunch Arrington co-founded? DON’T look to Arrington’s TechCrunch to find out!
First off, Arrington was disingenuous on “reporting” to his readers two months ago about the purported “doing well” status of Edgeio in his last public post abut the startup he represented as a member of the Board of Directors, as I recount in Edgeio $5 million Failure: The Myth of Disposable Startups.
Now, in publicly refelecting on the Edgeio meltdown, he says differently:
It seemed like every board meeting I was saying the same thing - stop spending money, stop hiring, stop. I was out voted, and the company followed its own path.
In responding to Arrington’s announcement earlier this week of his Edgeio Web 2.0 startup bomb, I noted: 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!
The Arrington failed startup spin continues, big time:
The fact that Edgeio ultimately failed, though, doesn’t mean I was right. The investors felt that the time to spend and try to grow was now. It doesn’t matter that Edgeio failed, what matters is that it is the right approach if you are trying to make something big. If you want to be conservative, don’t be a silicon valley entrepreneur.
Michael TechCrunch Arrington may be “obsessively profiling” Web 2.0 startups, but he is NOT obsessing over helping the “cool apps” he showcases thrive beyond the (double edged-sword) TechCrunch effect he powerfully engenders.
For the past 18 months, I have been counterpointing Arrington’s cavalier who needs revenues Web 2.0 startup parade of demo summaries at TechCrunch.
While Arrington cheerleads daily on behalf of twenty something software developers rapidly prototyping the hottest, latest Web 2.0 apps, he does NOT rally for commercial viability or long-term sustainability of the new Internet products and companies he champions, even those he invests in himself!
Arrington famously warns about what he perceives as the dangers of “over business planning,” as he did at the “The Future of Web Apps Summit,” September 2006. The Arrington checklist for Web 2.0 startup “winners”:
Passion for what they are doing
Do something extraordinary
Remove serious friction
Great founder dynamics
Never raise big money or raise it after you have won
Perfect revenue model is not required
Launched with post on TechCrunch
Arrington’s qualification of a Web 2.0 startup winner: SELLOUT (quick)!
Writely: Google acquisition
Del.icio.us: Yahoo acquisition
Userplane: AOL acquisition
Flickr: Yahoo acquisition
MySpace: News Corp. acquisisiton
Bloglines: IAC/InterActiveCorp
Truveo: AOL acquisition
Grouper: Sony acquisition
Newroo: News Corp. acqusition
Moral of the TechCrunch story to twenty something amateur entrepreneurs? In the words of YCombinator’s Paul Grahm, don’t “sweat the business model” BECAUSE multi-billion dollar corporations are sure to be on the look out for your cool app!
YEAH, RIGHT! (SEE Y Combinator to Hackers: Dream SMALL and Code for Google on the Cheap)
Michael Arrington and Grahm’s YCombinator would undoubtedly be greater champions of Web 2.0 start-ups if they championed realistic, attainable Web 2.0 start-up goals. The dream of an acquisition by Google, Yahoo, News Corp…is a foolhardy replacement for a viable business plan, as Arrington’s own failed Edgeio should attest to.
BUT, no;Slow, steady and SMART wins the Web 2.0 startup race does not make for Techmeme worthy TechCrunch headlines!
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
ALSO: Business Plans Help the Web 2.0 Kool-Aid Go Down and Hey Paul and Fred: Hackers, NOT Startups, Are the Commodity and Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model
PLUS: Henry Blodget Slams eBay’s Whitman: Yahoo’s Yang Next? and Reid Hoffman: LinkedIn About Face (book) and Google Zeitgeist: $200 University Payola AdWords Scam