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Pay Up Douche Bag!
« on: 2008-08-18 01:15:43 » |
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The New York Times
August 18, 2008
Amid Conference Halls and Keynote Speakers, a Rivalry Forms
OR
Pay up, douche bag!
[WW's title]
By BRAD STONE
SAN FRANCISCO — A frequent ritual of Silicon Valley is the money-making gathering known as the technology conference, where investors, entrepreneurs and industry executives come together to strike deals, catch up on trends and engage in some nonvirtual networking.
But a noisy new entrant is disturbing this peaceful realm of croissants, keynotes and hallway handshakes. It has incited a bitter public dispute with a more established competitor over the most ethical way to run such a conference.
Demo, a 17-year-old conference franchise owned by the technology publisher IDG, has served as the springboard for hit products like the Palm Pilot and the TiVo digital video recorder. In San Diego during the second week of September, 70 start-ups will pay $18,500 each to make a six-minute presentation to a crowd of investors, journalists and others.
To Michael Arrington, the elbow-throwing, supercilious founder of the popular Silicon Valley blog TechCrunch, Demo’s business model amounts to “payola.”
“How do you make objective decisions on the best companies when the first decision is whether they can pay or not?” Mr. Arrington said. “Sometimes the hottest start-ups either can’t afford it or don’t need it.”
Mr. Arrington is the co-organizer of TechCrunch50, a conference in San Francisco that he intentionally scheduled for the same span of days as Demo next month. In his event, 50 start-ups, selected from a pool of 1,038 applicant companies, will not have to pay to make their pitches. But Mr. Arrington’s show makes its money in other ways — like selling sponsorships and tickets for the event itself, and charging companies to demonstrate their products on tables outside the main conference hall.
To promote their conference, now in its second year, Mr. Arrington and his colleagues have used their widely followed blogs and Twitter updates to accuse Demo of concealing its high price tag and exploiting the attention-starved start-up community. They unceremoniously vow to kill the Demo conference.
Demo’s soft-spoken executive producer, Chris Shipley, says that Demo’s fees have never been hidden, and that there is no lack of companies willing to pay. She said she meets with 700 companies a year to select the best start-ups to present at two annual Demo events each September and January.
Ms. Shipley also says that it is TechCrunch that is obfuscating its own money-making ambitions and the true nature of its relationships with its venture capital sponsors, who she says may be paying in part for early access to the most promising start-ups, which they can single out for investments before rival investors. “Entrepreneurs can’t make an honest choice if one of our competitors is not being transparent,” she said.
TechCrunch denies that sponsors get any special advantages; companies can choose to let venture capitalists peek at their applications, but only after the conference ends.
This is a fight that Mr. Arrington went looking for. A lawyer who turned to blogging in 2005, Mr. Arrington attended three Demo shows before announcing his competing event from the Demo floor in 2006. In addition to criticizing the presentation fee, he complained that there were too many start-ups at the event, that the wireless Internet network for participants was unreliable and that a committee of executives, entrepreneurs and journalists could more carefully select the best start-ups.
In a blog post, his partner in the endeavor, Jason Calacanis, a former executive at AOL, said they would give back to the community of entrepreneurs with a new kind of conference that would seek to cover its costs with modest fees and sponsorships.
The sharp criticisms took Stewart Alsop by surprise. Mr. Alsop, a venture capitalist, created Demo in 1991, in part because he thought other conferences did not devote enough attention to product demonstrations.
Mr. Alsop has no current affiliation with Demo, but like the people who run it, he is upset at the accusations from TechCrunch. “What I’ve seen from Mike Arrington has just been classless,” he said. “I don’t understand what business objective he has other than to get notoriety.”
Such rancor seems to please Mr. Arrington, who enjoys a public scrum. He is also known to compete hard for news — and sometimes rumor — for his Web site, which he has positioned as a rival aimed at overtaking the technology news network CNet. “Being in the mud is where I partially like to stay,” he said.
The first TechCrunch show, called TechCrunch40 for the 40 companies that took part, was last September at the Palace Hotel in San Francisco — one week before Demo. There were striking similarities between the shows. The wireless network at the TechCrunch show was overwhelmed and unavailable for most of the conference. And the organizers decided to charge the companies that did not make the final cut to present their products at tables outside the event.
This year, Mr. Arrington and his colleagues have expanded their money-making potential. Fifteen companies, including Yahoo, Microsoft, Google and the venture capital firm Sequoia Capital, are paying $35,000 each to sponsor the show. More than 25 exhibitors are paying $10,000 to exhibit their wares, and 1,200 people are expected to buy tickets costing $1,200 apiece.
One veteran planner of industry conferences expects TechCrunch50 to make $3.5 million. (The company says that is “on the high side.”)
TechCrunch is enduring some of the inconveniences of this success. Most of the company’s 15 employees are involved in screening the start-ups, and the work is done at all hours. Executives at one start-up, who did not want to be named because TechCrunch forbids applicants from discussing their business plans before the event, said they had their screening call with TechCrunch’s chief executive, Heather Harde, a former Fox Interactive executive. The call was held at 4 p.m. on a Sunday.
Founders of another start-up say they were screened at 11 p.m. on a weekday night — by TechCrunch’s publicity and marketing executive.
Many Silicon Valley entrepreneurs say the overlapping dates of the two conferences have forced them to make a difficult and awkward decision. These companies depend on technology conferences to become noticed by investors and the media. Now their audience is split, and picking one conference could alienate the organizers of the other. A preponderance of local entrepreneurs say they will attend the TechCrunch event, which they say generates more buzz because some of the bloggers who feverishly cover start-ups cannot afford to attend Demo in San Diego.
Nevertheless, Ms. Shipley says her business shows no signs of weakening, despite the competition. Though she concedes that Demo might have to adjust its business model in the future, she says that the event is still profitable and that the full schedule of companies are paying to take the stage next month.
Ms. Shipley seems wary of talking about the dispute and irritated that she has been dragged into it.
“Any time I have to spend dealing with silliness is taking away from companies,” she said. “Frankly, if you believe in entrepreneurial capitalism, then the market will decide and take care of itself.”
Copyright 2008 The New York Times Company
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