Hey Julie, we won't get great startups by always being nice

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Both on TechCrunch.com, and by our own efforts on TechCrunch Europe, we try to do two things: 1) cover the tech market journalistically 2) engage with the market as player and commentator, trying to push things forward. We do the latter most often by highlighting new startups, companies and individuals we think the wider market should hear about. But the majority of the time we actually take a pretty upbeat view of things, especially at TechCrunch Europe. Why? Because the market for tech startups remains at a relatively early stage here. Yes we could argue long and hard about what stage it’s at, but generally speaking the majority of the stuff we come across is often still in development. That will probably be the case for a while, but it doesn’t mean we can’t cover it. When I first started writing about Favorit three years ago, Nick Halstead was just another crazy geek with this mad idea to build a new platform for blog comments. Guess what? It didn’t work, but we covered him and eventually that platform became the basis for Tweetmeme, a hugely successful Twitter aggregator and platform. When we started writing about Huddle in 2007, Andy McLoughlin and Alastair Mitchell had a seemingly insane idea to take on the mighty BaseCamp. In 2008 they are the only collaboration partner for LinkedIn and a Europas winner.

But there is another side to our support for the startup community. We get to ask questions. That’s our role. We’re part of the media, but, crucially, we’re also part of the community itself. We hang out with tech companies and tech people all the time. TechCrunch Europe is part of the eco-system. We’re like fertiliser – not only are we able to nurture, but just occasionally we are forced to pour a bucket of shit over something, just so that something new and better can grow up.

Which brings me to the entire story surrounding Spinvox right now and certain commentators who seem suggest that TCE and other parts of the media are ‘out to get them’.

So here’s the deal.

We are not out to get anyone. We are here to report facts. We can prod. We can speculate within reason. We can ask questions. That’s what we do. We’re not playwrights, we’re critics. Hopefully we’re not completely cynical ones (although having to wade through some of the dross we get every day, it’s sometimes a tempting course).

The startups are the ones writing and performing “the plays”. And because we know how hard it is for you guys to start up (no, we’re not entrepreneurs but like many human beings we are capable of empathy) more often than not we give new startups a fair fearing. Let’s see now: here’s some good news from MaxRoam,
here’s something from iDesktop.tv, here’s a nice write-up about a new incubator.

I could go on.

But when startups have been around for a little while we still get to cover them, warts and all.

Plus, guess, what? You guys get to hit back. You get to punch us with your blogs, Tweets, comments, you name it. We’re up for this, because it actually makes us a better media vehicle. And I’m not just talking about page impressions. I’m saying we get better when we interact with our readers – or should I say co-producers – in our market.

Which is why, when Julie Meyer, founder of Ariadne Capital and a backer and investor in Spinvox, started hitting back at the media about the criticisms of Spinvox, I was not surprised. In July she wrote: “Spinvox is a turbo-charged, over-the-top success story of which the UK should be enormously proud… We owe our entrepreneurs in the UK to be rooting for them when they go global, not pissing at them from outside the tent.”

Kerpow! Go Julie! Fair enough. You’re a huge backer of Spinvox, why shouldn’t you hit back?

Now, I have known Julie for a reasonable number of years. We quoted her when I was editing New Media Age magazine back in the late 1990s, when she was a founder of First Tuesday. We put her on the cover of The Industry Standard Europe magazine in 2001 (if I only had that cover image to hand!). I’ve sat on panels with Julie, I’ve talked to her on record and off record many times.

But I’m going to respectfully disagree with her position on Spinvox, and here’s why.

First, I’ll leave aside the fact she’s conflicted. Ariadne Capital is an investment and advisory firm and is a shareholder and advisor to SpinVox. It’s not a venture capital fund (when the BBC often quotes Julie, they call her a VC – for the record, she’s not a VC) but a closed Angel investor network “backed by 50 entrepreneurs – the founders of some of the most successful companies in the world” says their site. Here are Ariadne’s investor members for instance.

Ariadne is really Julie’s amazing network, built up over a number of years. All props to her for that. Props also to Julie for creating EntrepreneurCountry a sort of hybrid media vehicle which promotes entrepreneurship and startups, and Ariadne investments. I’m a fan of Julie’s championing of the entrepreneur.

But I can no longer sit around and read the pronouncements by Julie on her blog and on EntrepreneurCountry to the effect that we should all stop asking Spinvox some very pertinent questions and start being “proud” of them. This is, respectfully, unrealistic. This is not how the world works.

(A brief aside: Spinvox is still not answering lots of unanswered questions (like, why, with £200m in funding does it not have a CFO, or what percentage of voicemails pass through call centres, or why does it now insert “(?)” into text when no-one ever spells that out?). The tragedy of Spinvox seems to be two-fold: First saying it could scale with its voice to text algorithm, not by adding call centres; Second by managing expectations – perhaps it should never have mentioned the D2 technology? But I digress.)

My main point is, we won’t get a world-beating startup eco-system in Europe EVER if all we ever do is be NICE to companies. Feeding the market good news all the time is the equivalent of gorging on pure fat. The muscles don’t develop, the brain turns to mush and no-one ever learns anything.

Julie is a big fan of Ayn Rand who championed a purist form of laissez-faire capitalism. Well, I’m sure even Ayn Rand would agree with this: A well-functioning market economy needs a free press.

And while I know we can’t, in Europe, reproduce the bizarre accident of history that is Silicon Valley (WWII + the military + Computers + geography), we can at least learn from the ballsy culture (an American culture which Julie hails from I might add) which knocks its companies and entrepreneurs into shape every day with a double shot espresso of excoriating critique combined with a little “wow, that’s awesome” now and then.

When criticised, entrepreneurs there don’t just get angry. They get better. And that’s what Spinvox should be doing right now. If it really wants to answer its critics, the best revenge will be to come out swinging – use it’s new £15m cash injection to good effect, get a frigging CFO and get cracking.

Perhaps they will? According to Julie Spinvox is already “profitable” and “conversion revenue is going through the roof – just like a J curve … damn impressive”.

Great, fine. I’ll be first in line to break that news if and when it comes. They have my mobile.

But Spinvox sending in battalions from Ariadne telling the world the bloggers are crazy doesn’t make sense. Bloggers love that stuff! Haven’t you heard?

In a wider sense, and to be frank, the whole “we’re great here in Europe schtick” is good, and a healthy redress to those that say Europe can’t produce the “Googles” of this world. But we can’t let it lull us into a false sense of security. I recently held an event in Stockholm where a guy on a panel lauded the idea of “mini-entrepreneurialism”. Fair enough, each to their own. But thinking small, local, regional, “lifestyle”, is not going to produce the global success stories of tomorrow. Julie knows that, so why is she asking us to suddenly think like “Little Englanders?” I don’t know, which is why this post is in part a sort of ‘letter to a friend’ to think again about what they are saying.

And there is another point to be made here.

It’s all very well people saying they would love to have the “forgiveness for failure” culture in Europe which apparently exists in Silicon Valley. I hear that thought expressed time and time again. And I agree. Europeans are way too hard on their colleagues when a venture goes wrong – especially when the entrepreneur explains what happened. But when someone does really screw up, innocently or maliciously, or if a company is in fact just not very good then its behoves the press to point this out to the market so it can decide and learn.

Julie blogs: “We have to create a “better story” – a common psychology that says – it’s simply a better place to be to be charting our success as a nation by how many global leaders we build as opposed to how many we prevent from happening by tearing them down.

Again, I disagree. That simply creates a world of people who just think what they do is great, independent of reality.

If you want the “acceptance of failure culture” that is legendary in Silicon Valley then you’ll have to have the kind of press that – as well as celebrates the good stuff – also meticulously details failures. This is tough love, but it’s got to happen. If you have ever been “TechCrunched” by Michael Arrrington you will know it. Arrington is best Product Journalist in the business, and a startup that doesn’t take his advice does so at their peril.

And let’s not forget how lauded Spinvox has been for the past few years. The questions have only reached a crescendo in the last few months. Look at this report from the BBC’s Newsnight programme in 2007. It’s practically a love letter.

So, the next time someone whines about their coverage, ask them if they want the freedom to fail, be accepted back and given another chance? Because taking a few knocks, having your say in return, then dusting yourself off and getting on with it is exactly how you get that culture.

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