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.

  • http://www.litmanlive.co.uk Michael Litman

    Brilliant article. Typo here.. you can delete this when you’re done..

    “My (p)ain 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.”

    • http://uk.techcrunch.com Mike Butcher


  • http://danieltenner.com Daniel Tenner

    Good article, and spot on. Please do go on and do your job – even if sometimes it means stepping on some toes.

    If you don’t do it, it’s probable that nobody else will.

  • anonymous

    Quite a story there in the Domecq – Meyer political-economic-philosophy mashup. Elitist, Franco-Fascist family allied with egoist-laissez-faire-Ayn Rand capitalist. May help explain how CEO feels entitled to enormous salary and perks. Doesn’t bode well for the thousands of poor plebe servants doing the work.

    • johaness

      Julie Meyer is a walking scam.

      Domceq even more so.

      SpinVox is a total house of cards, all investors should be totally embarrassed.

      SpinVox makes all of UK VC look like idiots.

  • Me

    Brilliant – this is so zen. Like what happens when you fall from a great height? You hit the floor – the floor of truth. From only there, can you learn. Nice one Mike.

  • http://rodolfo.weblogger.com Rodolfo

    From Julie’s blog.

    “journalists have accused the firm of not paying suppliers […] Ariadne Capital, my firm, is a shareholder and advisor to SpinVox, and I know the allegations to be untrue”

    Now I am not a journalist but I saw some pretty crushing evidence to the contrary, with figures and names on one side and a company that was running out of cash on the other (and had to secure emergency funding to survive).

    So can we have some clarity? I’m not making any judgements if you decide to pay your suppliers late because you are in a tight spot with your cash flow – just hate being lied to about it.

    (speaking here as a former paying customer of spinvox)

  • http://www.twitter.com/lakey Chris Lake

    Superb article Mike. Good points all round.

    Techcrunch is a real cheerleader in this space, but it’s not a blind one and the media must always ask the right questions, regardless of a company’s PR agenda.

    As for SpinVox, I’m trying hard to keep my nose out of it, mainly because it is being well covered elsewhere. But to talk about it as a success story is crazy. Given the numbers involved I’ve started to wonder whether we’re looking at another Boo.com here.

  • JS

    On the whole, very well said Mike. Just wanted to get your thoughts on this though. You say:

    “We are not out to get anyone. We are here to report facts. […] That’s what we do. We’re not playwrights, we’re critics.”

    Meanwhile Milo this morning writes the following:
    “So I’ve decided to make a complaint to the ICO. I want the Office to accelerate their investigation into whether SpinVox is being honest enough with its customers about the proportion of messages that are read by humans – and also about how much of those messages are seen by call centre staff […] If you want to make a complaint too, you’ll need to visit the ICO’s website and complete the Privacy and Electronic Communications Regulations Complaint form. It takes about ten minutes.”

    That’s not prodding, or criticising, asking questions or even speculating within reason.

    That is one of your contributors actively trying to write the next ‘scene’ in this (tragic?) play, and encouraging others to do the same. Is it any wonder that some might think that TCE is ‘out to get’ Spinvox.


    • http://uk.techcrunch.com Mike Butcher

      It’s still prodding in my book. Testing the envelope. And the fact *no-one* has done this makes it a door worth pushing against.

  • http://www.justbook.it Andrew Lawson

    Is this Mike’s longest ever TC post? A great one either way.

    Spinvox needs to learn that if you live by the sword you die by the sword. They were happy to get the kudos when things were going well, and use that to build their company. But it certainly appears they misled people, and if I were a blogger / journalist that had praised them in the past I’d be feeling like I’d been sucked in and I’d be going down Milo’s route too.

    Personally if I had a need for their service and they said it was done manually by staff in Egypt it really wouldn’t bother me, I don’t get sensitive voice mails. But the fact that they tell you one thing and do another, and get plaudits for being so technically advanced is wrong, as well as embarrassing for the entire British tech community.

    I hope the full truth comes out soon and this issue is finished with. I hope for their staff and investors that the business can still succeed, but I am picking it will never be the darling of the media again.

  • pb

    That’s too kind, Mike.

    SpinVox is an embarrassment to the UK tech community. It’s not even a tech company.

    After SpinVox, Julie Meyer’s credibility is zero.

    • CE

      Julie Meyer has credibility??!! You must be joking.

      The only things that Julie is good at are self-promotion and re-writing history.

      Perhaps TechCrunch should do an expose on Julie. F@cked Company used to have some great stuff.

      • http://rodolfo.weblogger.com Rodolfo
      • Reply if you rate Ariadne

        “Julie Meyer — lots of talk, but what has she actually ever done? “

        What is ironic about this episode is that Julie herself has continually failed in life; failed to make First Tuesday anything, failed to raise a fund for Ariadne, failed to make any friends in the industry, and failed to make any money from investing in start ups.

        She still gets incredible media coverage: clearly she has not failed at PR.

        AND YET, the ecosystem in which she survives somehow manages to keep her afloat. So Europe can’t be that bad at giving failed entrepreneurs chance after chance after chance…

        First Tuesday. She sat on a few panels. Intro’d a few VCs to entrepreneurs. Riased money in 1999 (my 12 year old daughter could have raised money in 1999, even when she was two.com). Fell out with all her co-founders. None of which give good references (try speaking to Nick Denton or John Browning). She started Ariadne. Consistently fell out with everyone there (if you have a spare 20 mins do read the fucked company cache http://bit.ly/NSs7S …), Employed people like this (really, read it, it’s hilarious http://bit.ly/1QFrY4 ). Claimed that Skype was a portfolio company but all she did was headhunt a junior wonk (try asking the Skype guys about her).

        Consistently failed to raise money from institutions for Ariadne, only from angels who swallowed her lines. Today she intros deals to VCs who all have her on auto-delete and seems to earn her salary makes money from constantly appearing in PR
        1.pdf )

        What is terrific of course about Julie is that she keeps on bouncing back. It is probably posts like this that strengthen her resolve, keep her fighting for another slot on radio 4 and sharpen her persuasion skills to convince another innocent entrepreneur to give up equity to become part of her “portfoio” and get access to her “network”.

        And that is the rub. I’ve got nothing against PR trolls who want to get coverage to increase their speaker fee and somehow fulfil their insecurity, but it fills me with fear that she might become a respectable part of the “ecosystem”.

        It’s easy to post anonymously on a blog, so I want to hear from all those successful entrepreneurs and management teams who have got value from Ariadne. Please; speak up!

      • CE

        I share the concern that the reluctance of people to discredit (or at least know and share the truth about) Julie Meyer may enable her to become a “respectable part of the ecosystem” …..


  • Asif Youssuff

    The press has a role to be responsible to the community that is interested in the developments in this arena, and TechCrunch continually manages to provide relevant and interesting feedback to everyone involved. You guys are doing your job by not being “nice”.

  • http://blog.directededge.com/ Scott Wheeler

    I think all it takes to reassure oneself of the necessity of critical press is to look into places where it does not exist. Notably in Germany, while there is some reasonable content about the processes of startups, the coverage of startups is so whitewashed as to make it not worth reading.

  • Connor Sweetman

    Now Please correct me if I am wrong, but this “Do it for the British” attitude of Julie Meyer is a bit weird, don’t you think? She was born in the States, No?

    And I read on a corporate filing for SpinVox that Domecq is claiming British Citizenship too? Yet, she was born in the United States or Spain, right?

    Seems like a flaky bunch of carpet baggers to me! Weird ideas on life, and even weirder ideas on business practices. How could Julie Meyer be defending SpinVox when it Julie’s investors who appear to be the ones who will get the ultimate shaft? This latest infusion of funds has been reported to have come with strings attached that they get their money back first in case of a failure, and Julie’s were the original investors. . .. so those with their money in SpinVox the longest will be the ones to lose. Is Julie so out of it, does she still believe that she and Domecq can just bulldoze their way through this mess?

    Why isn’t Julie Meyer FURIOUS that Domecq & Doulton LIED TO HER ABOUT THEIR *SUCCESS IN WHITE PLAINS, NY*?

    Is Julie Meyer going to guarantee the original investors that she will personally repay their original investment? And just how much of a cut did she get and does she get from SpinVox?

    Geesh! The smell of this from the dead fish all over the place is really rank and vile. . . ..just like Domecq & Doultan’s actions!

    SpinVox was created and funded based on lies, and here is one of the original investors still DEFENDING THEM! Something is very, very wrong here.

    Julie should be the one who is screaming for D&D heads the LOUDEST and her investors should be stringing her up because there is something very, very wrong here and I suspect collusion and graft.

    Do it for Good Old Englan so we can be proud of out Tech Industry. . . .whatever she is smoking, keep it away from my kids!

  • http://twitter.com/chrisco Chris Comella

    Well said.

  • http://tripleodeon.com James Pearce

    Great post, Mike. Eggs, omelettes, etc etc.

  • http://www.indiacallingcards.in/hey-julie-we-won%e2%80%99t-get-great-startups-by-always-being-nice-08-calling-cards/ Hey Julie, we won’t get great startups by always being nice « India Calling Cards

    […] reading here: Hey Julie, we won’t get great startups by always being nice Comments […]

  • http://metablogging.gr/archives/2486 Metablogging.gr » Blog Archive » Lifestream της August 18th

    […] Hey Julie, we won’t get great startups by always being nice Μοιράσου το με:  Κατέβασε το metamarks plugin […]

  • anon

    I think you are being generous.

    I am sure the investors now know that SpinVox did not make best use of their money and it is at least a moral fraud. The problem is that those investors will be too proud to come out and say they made a mistake.

    This leads to the future decisions that serious investors will make when looking at European technology investing. It is hard enough to get tier 1 venture firms into Europe, now SpinVox has made it even harder. None of these investors will approach technology in Europe with the same optimism that Julie is voicing. And, again you have it correct, Julie does not invest in companies in the same way the Sandhill set does and is not even close to having the amount of money that competes with the Valley.

    I think that media needs to keep companies honest and celebrate the successes. The media must now be hugely skeptical of claims any company makes. SpinVox has abused a trust. As professional as the media is, the reporters and writers must feel a bit betrayed.

    These effects will go unreported and will have no proof of existence, but will cause huge set backs.

    Frankly, I think that SpinVox and Julie owes an apology to all of the other European startups out there that will suffer as a result. For them to claim a leadership position as defenders of startups is the last thing this industry needs.

    I would encourage the media to not let these folks get off lightly.

  • http://www.gamecreds.com Tim

    Great article, excellent spirit Mike.

  • John Boy

    Great post Mike.

    You reference the Newsnight piece here. In the interview with Julie (at 8.45 on youtube video) she states clearly that she did “little or no/minimal due diligiance on the company”. I wonder what her co-investors thisnk of that.

    Hardly professional.

  • http://www.iantester.com Ian T

    Clearly it’s wrong to flatter Mike too much here ;-), but I think this is very much a story worth pursuing – keep digging…

  • http://afrika.fm JasonO

    500k salary for a startup CEO. Alongside all the hype and company ‘perks’ Smells like a pump and dump job to me.

    After so many years the service is still not available in the UK.

    Whats the saying? Go hard or go home.

  • CE


    You’ve got three great stories here:

    1) SpinVox — the emperor has no clothes
    2) Christina Domecq — £500k salary? car and chauffeur? what planet is she on?
    3) Julie Meyer — lots of talk, but what has she actually ever done? How much CASH has Ariadne (not the suckers who were sweet talked into investing in Ariadne) ever invested?

    Please keep digging……

  • http://www.smallbizpod.co.uk Alex Bellinger

    Definitely one of the best posts on TechCrunch UK. Mike is to be congratulated.

    One of the strangest things about this whole sorry saga, is that it’s been common knowledge for at least a couple of years that SpinVox used call centres abroad to transcribe messages and seemed to have a very manual ‘technology’.

    I’m amazed that nobody did some digging before now. I’m equally amazed that SpinVox weren’t prepared to be more straight-forward from the outset.

    The financials are something else though …

  • AmITheOnlyOne?

    as much as I agree with Mike’s points – free press, say it like it is, push the envelope etc., I COMPLETELY disagree with the tone of this post.

    Techcrunch’s “holier-than-thou” attitude is getting worse as time goes by, and makes it harder to find the actual facts – what good journalists are supposed to present to their readers – in the conceited, self serving attitude that covers the stories like a thick sickeningly-sweet syrup.

    Arrington WAS the best product journalist, until he fell in love with himself and forgot that that’s what he is – A JOURNALIST.

    Apprently, his colleagues also forgot that that’s what he is – “Arrington is best Product Journalist in the business, and a startup that doesn’t take his advice does so at their peril.” – WTF???
    If Arrington reads this post and is cool with this comment, well, I guess that just proves me right..

    Don’t get me wrong – I think the techcrunch guys are doing us all a great service, but I think we will all be better off if everyone (Butcher, Meyer, Domecq et al.) get off their high horse and start focusing about what we are all REALLY interested in – building exciting new companies that will grow and prosper and make a real difference in people’s lives.

    I hope I’m not the only one…

  • http://uk.techcrunch.com/2009/08/21/spinvox-why-its-extinction-wouldnt-matter/ Spinvox: Why its extinction wouldn’t matter

    […] each time I’ve asked them about Spinvox. I was interested in their answer, because the recent controversy surrounding the company appears to be gradually affecting the way the mainstream media views, as […]

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