TechCrunch20 Announcement Raises Eyebrows

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TechCrunch maven Michael Arrington and former Netscape head Jason Calacanis will team up to run the TechCrunch20 Conference, where tech startups will be highlighted based on merit instead of fees. Their choice of venue to announce the new show just happened to be the first day of DEMO, a conference that highlights startups and charges a hefty fee for them to attend.

Valleywag called the announcement of TechCrunch20 “an aggressive, show-stealing move.” PodTech’s Robert Scoble, an advisor on the TechCrunch20 board, described it as “a great idea.”

Until three hours had passed, that is, and a Scoble pal pointed out to him that this move wasn’t much different than what took place when Arrington fired TechCrunch UK’s Sam Sethi for his conduct at Le Web, a blogging conference in France, last December. As Arrington said on December 13th: “This is driven entirely from Sam’s ethical lapse in trashing a competitor while simultaneously promoting his own events.”

Arrington, Calacanis, and Scoble are not actively trashing DEMO, who now has to be viewed as a competitor. But the timing of the disclosure, as Scoble noted in a post three hours after his first one, “did seem fairly tactless.”

DEMO organizer Chris Shipley may not appreciate being ‘Microsofted’ with a new entrant to the startup field with name/brand recognition that undercuts DEMO’s pricing. Once upon a time, Netscape actually charged people for its browser, until Microsoft unleashed IE with a “free forever” price.

At least Microsoft didn’t call Netscape’s revenue stream ‘payola.’ That’s a dirty little word mostly associated with the pay for play schemes that have been around in radio for decades. Calacanis dropped the term into the conversation in his post about TechCrunch 20 titled “Taking the payola out of DEMO-ing”:

It’s wrong on so many levels (as a lot of folks have pointed out).

First, the best companies would never be able to afford that fee. This means the most prommissing companies who need the exposure the most–and who the audience would most want to see–never make it to the stage….I don’t think a YouTube, TechMeme, Blogger, StumbleUpon, or CastFire could afford the ticket when they were starting up.

Second, even the good companies that make it to the stage have to spend around $20,000 to pay for their six minutes! What a rip-off.

Some commentors on Arrington’s blog post about TechCrunch20 questioned whether it can stand above the “conflict of interest” he perceives at the conference level:

Michael, just like you say that there’s a conflict of interest because these are PAID demos, TechCrunch20 will experience the same. The startups that are likely to be picked will probably be those of the well-connected entrepreneurs who know you or Jason personally (oh, wait, you call it a “committee”). So don’t make it sound like you are catering to the little guy in the garage…

A major benefit that DEMO provides is it opens doors to companies outside the inbred world of Silicon Valley. My company presented at DEMO and it was worth every dime. We are located in the heartland, and we don’t have any familiar’ names on our Board….If you are going to succeed, you will have to prove to the rest of us that TechCrunch 20 will in fact be open, honest and fair. You can start by having your readership elect your board which should be diverse and not all related to TechCrunch in some way. This would help make sure that you aren’t the next conference criticized for a conflict of interest.

Shipley weighed in on the announcement as well, and took a higher road than other people may have taken in response:

While it is true that DEMO charges companies a fee to participate, DEMO does not take any company just because it can pay a fee. We don’t need to. More than 300 companies look to be a part of DEMO – we accept no more than 70. In fact, Guidewire Group meets with more than 1,000 companies a year – at no cost to those companies. It’s true that not all great companies can afford to be at DEMO, so Guidewire Group works with them to help them meet potential investors. NetworkWorld, the producer of DEMO, works with companies on payment terms.

And the media? Their “passing coverage” generated 250,000,000 media impressions, and that number doesn’t include unaudited blog coverage.

As a guest of a number of DEMO events over the past years, you must be finding some value here – you keep coming back. I hope you’re new event continues that tradition of delivering a valuable venue that supports entrepreneurs.

Give him credit for that stance, as it’s much more professional than the conditions that spurred his answer. And as one more commentor at TechCrunch observed, “when did this love-fest begin between Arrington and Calacanis?”

We’re going to guess the prospect of making money, like love, conquers all.


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David Utter is a staff writer for WebProNews covering technology and business.

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