TechCrunch50: $3.5 million x Disingenuous

Duncan Riley

Brad Stone in the New York Times has finally published his TechCrunch50 vs Demo post. I spoke to Stone last week on the subject, but obviously my so-called venom towards Michael Arrington wasn't showing because I wasn't quoted. Arrington has responded here, half calling out Stone for not focusing on the positives, but then has to stick the boot in to DEMO again.

Lets start on the positives. TechCrunch40 last year rocked, and I'm willing to bet that TechCrunch50 this year will be better again. In some ways I'm sad I won't be attending. It's a top notch event that highlights some great startups, and offers a wealth of networking opportunities. The TechCrunch staff also work their backsides off in the lead up to the event, so it has the heart and soul Arrington feels the need to share in his post. Indeed, I still don't think I've ever seen a group of people work as hard as the TechCrunch team for last years conference, and that includes everyone for the extremely talented Heather Harde, through to the ever reliable interns.

But here's my issue, and this is what I told Stone when I was asked: if this is really all about startups, and doing the best for startups, they wouldn't be running it the same time as DEMO, and they wouldn't be trying to "kill" DEMO as Jason Calacanis so nicely puts it. If they were serious about putting startups first, they would be focused only on creating more opportunities for startups to be discovered, and they'd allow their event to stand on its own merits without the need to constantly trash talk the opposition. Are we not better off as a web community having both DEMO and TechCrunch50?

Then there's the profit. Stone says its $3.5 million. How charitable that in helping startups the profit could be as high as $3.5 million (I'd think it's closer to $2 million, but it's still 7 figures). I don't begrudge them a profit, and indeed good on them for being able to turn a million each for both Arrington and Calacanis in the split. But here's the thing: if it's not about Payola and all about the greater good, isn't it grossly disingenuous to be playing the charity/ anti-Payola line when all TechCrunch50 does is slightly shift the goalposts on the money coming in. Demo pit attendees pay...they pay half, but if they want two on the stand they pay the $3k. There's 100 of those. Then there's the sponsors. Arrington tells Stone that the sponsors get no special access to the startups, but does anyone seriously think the sponsors pay to get their logo on a screen? I haven't checked the speakers rostrum/ judges panel, but if there wasn't some cross over I'd be surprised. They must get something from paying up, VC's are in the business of making money, not handing it over for no return to line Jason's and Arrington's pockets. Maximizing access to startups? $2995 a ticket if you want to watch, and there's 1000+ attendees. Allow for some of them to be free press passes, but still, access remains the domain of the wealthy few, not necessarily the best people to pitch to.

Prize Money: a paltry $50,000. Embarrassingly low given the profit the event delivers.

If they were really doing this out of the goodness of their hearts, if they really believed that the DEMO model is fatally flawed, and if they really wanted to put on the BEST show for startups, they'd run the event at break even. They'd run the DEMO pit for free, they cut the cost of the tickets, or better still they'd hand pick the audience so as to maximize the best possible group for the presenting companies to pitch to, after all, isn't charging $2995 for a ticket audience payola?

Of course, they'll never do any of that, but as long as they run around playing the destroy DEMO/ best for startups marketing pitch, they do themselves a grave disservice. Every time DEMO is trash talked, it appears to most sane people to be more of an insecurity from those doing the trash talk, than any real reflection on the model. Put on a great event, but STFU with the DEMO hating and let your actions in the delivery of the event speak for itself.