Things That Don’t Make Sense About The CrunchPad/ JooJoo Story

As we’ve covered over the past few weeks, the CrunchPad/ JooJoo project has taken a turn for the bizarre as developer Fusion Garage dropped TechCrunch from the rollout.

The story has parts of the tech blogosphere captivated, complete with allegations and counter-allegations, pre-sales and litigation. Like many I’ve been following the story, and had the opportunity to talk to Fusion Garage CEO Chandra Rathakrishnan last week. Even after that chat, there’s still a pile about the story that doesn’t make sense (although most of the issues fall on the TechCrunch side.) Here’s the things that don’t add up.

Timing: Michael Arrington claimed November 30 that the CrunchPad was ready to launch November 20. And yet December 7 the JooJoo was demonstrated complete with JooJoo branding.

Exhibit 1

Now it’s hard to say with 100% certainty that the JooJoo branding isn’t a sticker, but it sure doesn’t look like one. It looks like it’s part of the unit, and none of the hands on reviews (I’ve read) have noted that there is a sticker there (something that I’m sure would have been noticed.)

A switch in branding on a production run isn’t a matter of flicking a switch, it takes a significant lead time. Either the CrunchPad was never ready to debut November 20 and/or Fusion Garage had already made a switch before that date to create a JooJoo branded product.

Manufacture: Michael Arrington now claims that the bulk of the IP rests with Pegatron (interestingly contradicting his earlier statements including “We jointly own the CrunchPad product intellectual property”), further that Pegatron was the manufacturer, but Fusion Garage is now using a different company to produce the JooJoo.

Again, you can’t simply hit a switch and produce a product like this overnight. If Fusion Garage is using a different manufacturer, the lead time must pre-date November 20.

Finances: Michael Arrington claims “Fusion Garage is, and always has been, a company on the edge of going out of business” and that “The company was constantly raising debt from unsavory investors, borderline loansharks, to make payroll.”

If that’s the case, why was Arrington in business with them to begin with? He’s not a dumb bloke, surely if this was true, he wouldn’t have risked a project as important to him as the CrunchPad with them?

Timeline: Michael Arrington claims “We chose to work with Fusion Garage on Prototype C and the launch prototype after we finished Prototype B internally.”

Michael seems obsessed with the fact that Fusion Garage deleted their blog (which obviously is a little odd,) but here’s the thing he leaves out: that blog originally showed a post where Fusion Garage talks about working with TechCrunch on Prototype B.

Jurisdiction: Arrington writes “Thursday afternoon we filed a lawsuit against Fusion Garage in the Northern District of California Federal court” and yet Fusion Garage is a Singapore company.

The court documents claim that the California court does have jurisdiction based on a couple of factors; I’m not a lawyer so I won’t claim to understand the validity of those arguments. But likewise, Fusion Garage is a company wholly owned and operated in Singapore, not the United States. Even if a case were proven in the United States, its enforcement in Singapore would be at the very least difficult, if not impossible. United States law does not hold a status that is superior in other jurisdictions: end of story. Arrington knows this, so why start the proceedings in California and not Singapore unless the court case is more about show vs substance?

Lawyers: Arrington claims that “the company [Fusion Garage] has not yet hired an attorney to respond to our lawsuit.”

And yet, when I spoke to the CEO, he claimed that TechCrunch doesn’t have a case even under US law. That’s either a good bluff, or they have legal advice; I’d suggest the latter.

Open Source: Arrington said “Let’s design it, build a few and then open source the specs so anyone can create them. If everything works well, we’d then open source the design and software and let anyone build one that wants to.”

And yet Rathakrishnan told me last week that the open source commitment was one Arrington made, and they had never agreed to open source it, nor was that point raised with them.

If that was a real commitment from TechCrunch, why not either try and force the JooJoo to be open source, or in the event that Arrington owns an equal share of the IP, why not release all the details for others to use? If you really wanted to slow down the JooJoo, wouldn’t allowing others to make it be a reasonable step? Well, that’s presuming that the open source offer was sincere in the first place; others have suggested that the offer wasn’t.

Friends? Arrington claims that Rathakrishnan was his friend, and then that he is a “bad guy.”

ITWorld has a good summary on this point, and it goes back to the earlier point on if Fusion Garage was so bad, why was TechCrunch is business with them?

Funding: Arrington claims “We have had financing from top tier investors lined up for the CrunchPad…. That financing was on hold until we launched the device.”

Hang on, how can you “have had” financing but didn’t actually have the financing yet. Everyone knows that financing is only ever as good as when you get it.

Control The Press: Arrington claims that “We believe it is irresponsible for press to link to the pre-sale site without disclosing this to readers” Arrington’s claims of financial difficulty at Fusion Garage.

I think ITWorld says it well: “This attempt to directly sway the press away from Fusion Garage really spikes my suspicion meter. After all, Arrington is the press. If I started writing screeds advising him on what he should or should not say about a product, what would he think? I suggest he’d think I was just doing everything I could to further my agenda.”

Conclusion

Michael Arrington and I might not be friends these days, but I worked for the guy for 12 months, and despite our differences today I’ve always maintained that he is one of the smartest guys I’ve ever worked with.

Which is why none of this makes any sense at all.

If the paperwork was in order Fusion Garage wouldn’t have launched the JooJoo. Arrington may have been conned, or Arrington was sloppy on the legal side, but neither are things I’d see Arrington caught by. Add to this the contradictions and other odd points raised in this post, and the plot gets even weirder again.

They say the truth is usually somewhere in the middle, and in this case I’d nearly place a bet on that being the case.

Update: Two things missed: thejoojoo.com (the official site) was registered November 9. Second, the owner of Crunchpad.com claimed on Reddit when the story broke that he had never been approached by Arrington to buy the name at that time.

The registration of the JooJoo name shows that there was a lead time until Arrington was told about the decision of Fusion Garage to go it alone, but not by a long time.

The failure to attempt to buy Crunchpad.com though is odd: you don’t just not attempt to own the .com name of the product you’re apparently about to launch.