Open letter to Mike Arrington: Please stop investing in startups

Posted: May 2nd, 2011 | Author: | Filed under: Startups | 20 Comments »

Hi Mike,

I’m one of your customers.

We don’t really know each other. We’ve chatted at a few events, you’ve covered some of my antics, but I’m mostly just a guy who reads TechCrunch a lot. I find it’s a pretty good place to see what’s important in the industry. And you and your team do some damn fine reporting on things the world wouldn’t know about otherwise.

I am product guy, not a media critic. But I’m a big believer that economic incentives shape behaviors in subtle and unmeasurable ways. And I think your decision to make investments in startups is going to make TechCrunch a worse product.

I can’t tell you exactly how. Are you going to be a little more likely to ignore competitors to your companies? Cover them, even when they’re not newsworthy, to show you’re not biased? Feel compelled to pull or throw punches, either to support or prove you’re independent of the companies you deal with?

I don’t know. But I think it’s going to happen, it’ll be subtle, and it’ll make TechCrunch worse.

I’m not making demands or threatening to leave. Just making a request, from one product guy to another: journalistic independence is a great feature. Please don’t cut it.

Best wishes,

Dan Shapiro

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  • http://twitter.com/aaBowlin Austin Bowlin

    This is a very good point. Kieth Olbermann certainly had to deal with a fire-storm after making political donations to those he covered. While Mike Arrington investing in companies covered by TC may not be quite as compromising or contrary to American journalism’s unwritten rules, it certainly is nearing that realm.

    At the same time it hardly seems fair that Arrington cannot participate in the Angel/VC world. Perhaps he should take the safe option and create a trust he has no control over or idea what is in it (similar to what government officials in Reserve, Treasury, and regulation roles must do with their portfolios). He wouldn’t be able to actively participate in the investments (or ideally know what’s in them) but I wouldn’t questions TC’s objectivity if he was upfront and did this.

  • http://www.metamorphblog.com Matt Mireles

    The trust idea would make no financial sense whatsoever. Arrington’s competitive edge is the fact that he knows the startup world so damn well.

  • http://twitter.com/kickme444 kickme444

    Techcrunch is a terrible source for journalism, don’t fool yourself. Arrington is an attention whore and investing in startups when angel investors are some kind of tech rockstars makes perfect sense. This only gives further proof to the fact that Arrington is not a journalist, never has been and never will be. He writes non fact based blog posts as do most of his writers.

    Stop fooling yourself.

  • Noactivnoesdsd

    Do you really think Arrington cares anymore? He sold his company and he’s just barely tolerating continuing to work there.

  • https://me.yahoo.com/a/lmyGBjU.wJc5SrKB2lXpfNZJugfQMYmTvbE-#fe028 Your Name

    if you’re not paying for it, then you’re not the customer, you’re the product.

  • http://startupmeme.com Sardar Mohkim Khan

    To call Arrington a journalist is definitely giving a bad name to all journalists out there. I am a blogger myself and honestly 99% of all bloggers will fail badly if they were to write for papers or news sites.

  • Dan

    That’s like saying Perex Hilton shouldnt own stock in any entertainment companies, I hope to god people don’t actually think Arrington’s a “journalist” he is and always has been a rabble rousing tech shock jock, you can tell who he’s invested in, just comb through the archives for stroke articles.

  • Anonymous

    When TechCrunch first started selling ad space to startups, did you find that influenced their coverage?

  • http://www.facebook.com/AlanCarlBrown Alan Carl Brown

    Blogs are written by subject matter experts that know their topic better than any generalist. They are, by definition going to have their hands in the pie.

    So if you want coverage from people that are unbiased (or less biased) but who don’t quite get it, stick with mainstream media. If you want expertise with potentially an axe to grind, go with blogs.

    Better to look at both and always question what you read from both angles of competence and integrity.

  • Mt

    Blogs are written by subject matter experts? Hoo boy……

  • http://www.jasonmkey.com Jason mKey

    Arringtons biggest problem and what could possibly hurt TC’s integrity was the marriage with AOL. Arrington as an investor… I don’t see that effecting TC

  • http://www.rupees4gigs.com Vijay

    I think it doesnt make any sense why he want to become angel now ? that makes him to put all trash can news into tc ? no ?

  • http://pulse.yahoo.com/_CUTQWU5DFFGR4QZCV3ABCUZ7IU Dathu

    We are staying in democracy in that every has to express the things in their own way whether it’s a good or bad.It’s up to you to take the things.If you don’t like feel free to ignore the things.

  • http://www.techcrunch.com Michael Arrington

    There are lots of little things above that bum me out. But the one that gets me the most is how someone as intelligent as you on paper thinks that “journalistic independence” is not only possible, but a healthy goal.

    Like I said, there are little things, too. Like how TC operates, which would make your para 4 stuff impossible to implement even if the will was there. And the fact that you ignore the things that make me, me. Being part of this community. Being one of the only people who cover it who’ve actually gone through the same wars and understand what’s really going on.

    What’s happening here is you are reading what our competitors are writing. They’re writing these things because they’re scared of TechCrunch. We are out competing them and have been for a long, long while. This is a way for them to lash out. And I’m not even sure that they themselves realize how conflicted they are, financially, when they do it. It’s certainly not disclosed.

    Transparency is all I ask for in life. It’s what I’m willing to give. It’s a lot more than others do, the ones you seem to think are independent and unbiased.

    Funnily enough I don’t even bother to comment to those people. But you are an entrepreneur, a warrior. I expected more from you. You’ve let me down.

    Happy to continue this conversation offline.

  • http://twitter.com/danshapiro Dan Shapiro

    Mike,

    I appreciate you taking the time to reply. I know you’re being hit hard by people who don’t like what you do and see this as an opening to tear you down. I hope it’s clear that I’m in the opposite camp: I’m a hardcore user of the product you built. I want it to continue to be great. And like a Facebook user staring at a UI revamp, I’m worried about the direction I see you taking it.

    Maybe I’m wrong. The News Feed thing turned out OK for Zuck. But the one thing I ask for from my users is straight feedback. I feel like I owe you that too, for the value that you and TC have provided me over the years.

    Thanks for taking the time to listen; I’ll take you up on your offer offline.

  • http://ubermarketing.wordpress.com Akash Sharma

    Hey Dan, that is raw feedback from a product guy for another. I think the decision to invest must be taken by Michael completely , He has been investing since the 90s so I am sure he is not playing around with the AOL sale money.

    TC has been a great source of huge wealth of information and I think the outlook towards the start-ups should not change as it has not changed for companies he has invested in the past as well, they have not got any special treatment.

    Also there is a lot of commentary on the web on how up-front / in-your-face Arrington is in everything he does, but that is again being transparent and clear as he says in the comment below.

    He is one of the Pirates that we youngsters dream of becoming one day – http://techcrunch.com/2010/10/31/are-you-a-pirate/ and same goes for you Dan, did hear your great story behind photobucket on Mixergy.

  • http://www.siliconvalleywatcher.com/ Tom Foremski

    It’s interesting to see that many people believe that as long as his investments are disclosed then it is OK. However, Mike Arrington had been making investments secretly for several months without disclosing anything. It was Kara Swisher who forced his disclosure. Even by his own lax rules on ethics, and of AOL’s, he failed. How long would he have kept the investments secret? We don’t know, but he had for several months. Startups deserve unbiased media, imho.

  • Oliviag

    Well done,

    Great response. You make sense. I love Techcrunch and think your actual deeper involvement in start ups will serve only to enhance your product, i.e knowledge based reporting is so much more accurate.

    Mr. shapiro’s letter let’s himself down and smacks of jealousy and territorialism. On balance he may not have thought it through and may just need a chat and a coffee, a shared network is always a greater one and if he still doesn’t get it….. One point I would make is if you are writing about a company you are invested in, always declare it from the outset. Imagine you would do this anyway.

    Best of luck,

    Olivia

  • http://www.managementparadise.com MBA

    Can you share your linkedin, twitter, fb, email account ?

    I would like to engage in a discussion with you about startups

  • http://twitter.com/mmsanghvi miraj sanghvi

    Although I understand Dan’s point, I have another side of the argument.  I would rather have Mike actively investing in new companies.  Although TC is a news service, it is also covering the start-up, tech and VC industry, one that is always changing and one that requires someone to be actively involved at all times.  Given the option of an editor that solely works for the newspaper and an editor  that is actively involved in their respective industry, I think its immensely better to have the one that’s active – especially in the unique industry that TC covers.