Why We Sold TechCrunch To AOL, And Where We Go From Here
techcrunch.com
techcrunch.com
The technical reason seems like a very bogus reason. Its true that the TC design could use some help and the general site layout and speed could use some improvement. But any half-decent developer and a designer who is worth his balls could solve this problem. After all they are running on wordpress using PHP. In regards to the speed of the site, its no so much of a technical problem as it is a "widget problem" they have more external JavaScript widgets pulling in than the site itself. The only solution to that problem is a reduce the number of external calls.
The other reason he used was that he is tired. I can understand that, it is very much possible to get tired of something that you have been very involved with for several years, even if the project is the love of your life. It can be both mentally and physically taxing. But he is not going anywhere... he is staying with TC even after the sale. What responsibility is he offloading other than the technical aspect of the site? And it isn't much offloading because its not like he is sitting behind the computer and developing the site, he would be hiring someone to that job.
The only thing that he doesn't mention and doesn't talk about (anyone else in his position would have done the same), is money. It is possible that AOL offered something that was too good _for him_ to refuse or he really needed the money. Everything else he mentioned sounds like a bunch of hogwash to me.
You're right about the technical. As for what he's offloading I guess that's running TC as a business. Ad sales, budgets and so forth.
On a side note it's very strain to me to run something so intertwined with the valley from... Seattle.
But it should also be a payday for him, a more reliable one at that.
That reason isn't a technical one. As an administrator of your small company you have to hire people that are good enough and keep them happy.
All small companies have this problem. Programmers don't want to work for small wages, feel unappreciated, work on uninteresting problems forever, or be second-class citizens. Those that do and are half-decent, would rather prefer the job security of a big company.
Another reason would be the stress of any small business to be profitable. Not only that, but you've started the business partly to get rich.
If what he's saying is true, and AOL can't interfere with their writing, and it's in the contract, and he also earn a handsome sum of money, then I can see why they agreed.
Perhaps what Arrington means is that it's really hard to find programmers willing to work on these two products for the long term. It is a blog and a database, after all, and the nature of the software doesn't make for terribly exciting work.
Same is true for other industries btw. I'm living through this in the real estate sector right now and sometimes I want to punch people in the face for not just thinking for one freaking second before blindly doing what some other non-invested person wrote on a spec sheet or plan, but then I remind myself that they're all mercenaries who just do what I (directly or indirectly) tell them, and that I need to be on top of every little detail and double- and triple check everything. That's what driving (not just running) a business is about.
Making sure that the 3 guys working together are actually working ltogether is tough. Then you deal with schedules, deployments, personality conflicts, and the whole thing.
Managing things is a profession unto itself. My guess is Arrington doesn't like doing it.
It took me a while to parse this as "Finding ones who'll be available after finishing that one feature you need is harder." :)
No offense but his sounds so incredibly naive it's not even funny.
From the post I take it that is is exactly what Arrington didn't want to do any more. The article you linked to basically says 'to make your idea a success, you treat the programmer in detail, and let him focus solely on the technical aspects of the software.'.
Does the editor and founder of Mashable maintain the server and fixes software issues?
I hope not!
Translation: Dear California FTB, my move had absolutely nothing to do with tax avoidance on a cash windfall and I really am a Washington resident. I had NO idea we were being acquired when I made the move 4 months ago... I'm as surprised as you are. Seriously. For reals.
Teasing aside, Mike's built an impressive media business from scratch over the last 5 years. It's been fun to watch, and I'm sincerely happy for him. If you're reading, Mike - congratulations!
There are probably rules about how long you need to be there to establish residency. And the franchise tax board is notoriously nasty. I remember reading an article about how they go after athletes who play games in CA (read: all of them). So if you're a basketball player and you play the Lakers, if you earn $200,000 that night, CA wants $20,000, even if that's the only thing you've done in the state.
This is actually more legitimate than it sounds. My family's business (www.seliger.com) does grant writing, and my parents really wanted to move to L.A. from Seattle. But they moved to Tucson (where I'm in grad school) instead, because of the cost of housing and the tax situation. Their thinking informed this comment: http://news.ycombinator.com/item?id=1711350 . WA State is contemplating an income tax, which to me sounds like suicide and idiocy because Seattle's biggest advantage over CA is not having an income tax.
In any event, none of my family will step foot in CA for business because of the franchise tax board. But a lot of our clients are there, so every other year or so we'll get a nastygram from them, which requires that we reply and say, "We have no physical presence there, so fuck off."
"Congratulations, Mike! Now stick to your roots and leak the price! :-)"
EDIT: Yes, I know that WordPress VIP does go down, but that's WordPress.com's problem, not TechCrunch's.
There's a good lesson in there about only working at places where you contribute to income.
I can't figure out how this agreement could actually be enforced. If AOL shuts down a story on TC, what's going to happen? It's not like TC/AOL is going to sue corporate/AOL for breach of contract. There are almost certainly performance and tenure based incentives in the buyout to push Arrington and other higher-ups at TC to be a good soldiers. (They might choose not to be good soldiers, but their only option at that point is to quit.) The editorial freedom of TC is entirely dependent on the honor of upper management at AOL.
Arrington got his FU money and so what does he care at this point. I'd be surprised if you don't see the startups AOL is courting get positive spin on TC, and the startups AOL loses to in acquisitions to suddenly drop from the headlines. I wouldn't blame them, as the pressure is going to be absolutely huge on them to shift their reporting as AOL is in negotiations with startups.
A $25M – $40MM sale, doesn’t this make techcrunch a “dip shit company”?
Do as I say, not as I do Mike?
At an age when the giants (facebook, google, amazon, zynga) can quickly react to your new startup and assemble a team and build your website features in a few month, all the while retaining distribution power, what chances do startups have against them?