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Arrington's CrunchPad Dies 175

Posted by ScuttleMonkey
from the hooray-for-greed dept.
adeelarshad82 writes "Michael Arrington announced the death of the CrunchPad on Monday morning in a blog post heavily spiced with angst and drama. According to Arrington, the Crunchpad, a 12-inch Web tablet expected to be priced at about $300, was just days away from launch. At the last minute, however, Arrington received an email from Chandra Rathakrishnan, the chief executive of manufacturing partner Fusion Garage, apparently trying to cut Arrington out of the product on the eve of the launch. Fusion Garage, according to Arrington, wanted to market the device itself under its own name; which obviously was the deal breaker. Arrington claims that the company had overcome obstacles at every stage in the business such as deals with Intel, retail launch, securing venture capital and angel investments. Interesting bit is that some were already speculating that the Crunchpad was not real."
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Arrington's CrunchPad Dies

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  • by sopssa (1498795) * <sopssa@email.com> on Monday November 30, 2009 @02:10PM (#30272164) Journal

    It wouldn't be a surprise if the whole thing was just a hoax. Like the other article says:

    Arrington, who is not a journalist (and has never professed to be one), regularly talks to financial guys, with close ties to virtually every major technology company. He's also plugged into these same companies at even higher levels. Oh, and he also invests in companies he writes about. At times, this can make his information incredibly prescient and also highly self-serving. The problem is, no one can tell the difference.

    And a few days before launch and dies for such a stupid reason? Please.

  • by eldavojohn (898314) * <.moc.liamg. .ta. .nhojovadle.> on Monday November 30, 2009 @02:10PM (#30272166) Journal
    Email from Chandra's shareholder:

    We still acknowledge that Arrington and TechCrunch bring some value to your business endeavorIf he agrees to our terms, we would have Arrington assume the role of visionary/evangelist/marketing head and Fusion Garage would acquire the rights to use the Crunchpad brand and name. Personally, I don’t think the name is all that important but you seem to be somewhat attached to the name.

    Translation:

    I'd like to cash in on Arrington's hard work. Does he have some sort of puppeteer's slot in his ass or lower back where we could shove our arm during launches? Or is he run by remote control? Does he come with instructions or ... how does this 'Arrington thing' work exactly? Please toss him the offer of looking like Steve Jobs in the eyes of the public but being my subservient bitch behind the curtains and being forever financially crippled. If he requests vasaline, we may be able to find some funding somewhere but we're not making any promises. There are sharks and there are sheep ...

    Honestly, I applaud Arrington's levelheaded response. I believe mine would have consisted of nothing more than "WTF?" and an image [27bslash6.com].

    Aside from all that, I'm sad because I really was excited to see what came out of this and would have been interested after the price dropped a bit. I mean, depending on battery life, you'd have to be nuts to get a Kindle over this.

  • by postbigbang (761081) on Monday November 30, 2009 @02:17PM (#30272264)

    On the other hand, let's see what Fusion Garage ships. Might be ok. Too bad Arrington gets cut out of the deal. You'd think a lawyer would have better smarts about these things.

    Oh, wait....

  • Days from Launch? (Score:1, Insightful)

    by Anonymous Coward on Monday November 30, 2009 @02:18PM (#30272290)

    When you write "days from launch", do you mean that there are thousands of boxes of these things sitting in distribution centers, waiting to go to stores?

    Or do you mean they were hoping the printer was going to deliver a new batch of "CrunchPad" decals in a few days, designed to fit over the "Dell" logo on the laptop they were going to use in upcoming demos?

  • by Lord Ender (156273) on Monday November 30, 2009 @02:22PM (#30272344) Homepage

    The Kindle is actually $260 now, and it has an non-backlit eInk screen with a three-week battery-life. It has always-on, free 3G internet access, and it has accesses to the gigantic Amazon digital book store.

    This thing might have been a cool (concept for a) gadget, but it is certainly not a replacement for the Kindle. The Kindle is aimed at (and is perfect for) people who like to read BOOKS.

  • by eldavojohn (898314) * <.moc.liamg. .ta. .nhojovadle.> on Monday November 30, 2009 @02:26PM (#30272396) Journal

    It wouldn't be a surprise if the whole thing was just a hoax. Like the other article says:

    Arrington, who is not a journalist (and has never professed to be one), regularly talks to financial guys, with close ties to virtually every major technology company. He's also plugged into these same companies at even higher levels. Oh, and he also invests in companies he writes about. At times, this can make his information incredibly prescient and also highly self-serving. The problem is, no one can tell the difference.

    And a few days before launch and dies for such a stupid reason? Please.

    Then what were we seeing in the videos [youtube.com] on Youtube [youtube.com]? Really expensive tablet PCs? They couldn't get that down to $200? I'm just confused as to what his motivation would be ... I think inflating your stock with a fake product and then dumping all the stock you have before it crashes would look hilariously like insider trading. So what's going on? What do they mean by "plugged into these same companies at even higher levels"?

    In his 'rant' he's also calling these people out on infringing on his (and other people's) IP if they launch ... which are pretty heavy claims. I kind of get the feeling this isn't a hoax and there will be serious fallout one way or the other if they don't iron things out between each other. IP suit if it launches and fruitless R&D and production money if it doesn't.

  • This whole thread has been modded Troll. I'm guessing the CEO of Fusion Garage somehow got mod points.

  • Who Is Doing What? (Score:5, Insightful)

    by Kozar_The_Malignant (738483) on Monday November 30, 2009 @02:46PM (#30272604)

    I'm not sure what Arrington is bringing to the party here. He's not an engineer that I know of, but more of a money guy. It seems like Fusion Garage was doing all of the heavy lifting on the project. It's not clear how much skin Arrington had in the game. If he was providing serious development capital, he has a point. If all he was providing was "vision" and bloviation and hype via his blog, with maybe a seriously minority share of the capital, then he should STFU. There must be some sort of written contract for a venture like this. Let's see what it says.

    Personally, I don't feel that the branding of something with "Arrington", "Tech Crunch", or "Crunchpad" brings a lot to the table.

  • Hire a lawyer (Score:5, Insightful)

    by harmonise (1484057) on Monday November 30, 2009 @02:46PM (#30272606)

    Airing your dirty laundry on your blog is a sure-fire way to alienate the very people with which you want to reach an agreement. You've no doubt made it harder to resolve your differences amicably, even if Fusion Garage were the ones being dicks.

  • by fuzzyfuzzyfungus (1223518) on Monday November 30, 2009 @02:51PM (#30272658) Journal
    To be fair, it sounds like the technological side of the job was fairly simple. Knock together some commodity parts, put on a coat of polish, all set.

    The "dealing with everybody's least favorite social primate" part, on the other hand...
  • Re:Hire a lawyer (Score:4, Insightful)

    by fuzzyfuzzyfungus (1223518) on Monday November 30, 2009 @02:55PM (#30272686) Journal
    It isn't clear(particularly given that Arrington specifically classifies the crunchpad as being "in the deadpool") that he has any real interest in reaching an agreement.

    If, for whatever reason, he considers it highly unlikely that they'll be able to come to any agreement useful to him, it wouldn't be totally unexpected for him to attempt to pay the other guy back, and then some, in his own coin. Refuse to budge on any trademark/IP/whatever issues, indefinitely scuttling a release anywhere in the WIPO world, and use his considerable blog-fu to sink whatever is left.
  • by IpSo_ (21711) on Monday November 30, 2009 @03:11PM (#30272874) Homepage Journal

    ALWAYS, ALWAYS, ALWAYS have a shot-gun clause [wikipedia.org] with a hard time limit in any significant partnership agreement. This "co-owned" 50/50 split stuff is BS and is way too likely to go sour.

    If they had a shot-gun clause in their agreement, this would be a simple matter of one party or the other buying full rights and continuing on with the project, no legal system and multi-year drawn out court battles designed to put all the money in lawyers pockets. The issue would be resolved in a matter of days and both parties would essentially be happy.

  • by mrgreenfur (685860) on Monday November 30, 2009 @03:15PM (#30272924)
    He lampoons startups every day and finally tries something on his own and realizes it's harder said than done, what a surprise. This guy is a dick and always has been; it's kinda nice to hear he's having trouble!
  • Re:Shareholders... (Score:3, Insightful)

    by Volante3192 (953645) on Monday November 30, 2009 @03:16PM (#30272954)

    Meh, just seems like classic moneygrubbing stupidity.

    "We want more money from this otherwise you can't have it!" is a rallying cry too often seen in the world of music rights to TV show DVD releases. I mean, take WKRP. Instead of cutting a deal, the rates to relicence the music remained too high to include the original track. So the rightsholders end up losing money, the customers get a subpar product, and no one really wins.

    Take the money and run; keep trying to win against the banker will just get you the suitcase with $1 when you should've settled for the $17,000 offer.

  • by Anonymous Coward on Monday November 30, 2009 @03:19PM (#30272974)

    Yes, I read the article, and they had two hand-built versions of this thing, that sometimes ran for up to an hour before crashing.

    Also, they invented a time machine, because somehow these setbacks went backwards in time and prevented them from holding the pre-launch part scheduled for November 20th.

    I'm not sure where anyone gets "days from launch" from that, and I'm not sure why the Slashdot editors felt that including it in their "summary" would increase revenue.

  • by Anonymous Coward on Monday November 30, 2009 @03:21PM (#30273002)

    FTA: It was about the thrill of building something with a team that had the same vision.

    Obviously, Arrington assumed too much about his partner who, along with the partner's shareholders, had a different vision.

  • by iamhassi (659463) on Monday November 30, 2009 @03:23PM (#30273022) Journal
    "If all he was providing was "vision" and bloviation and hype via his blog, with maybe a seriously minority share of the capital, then he should STFU."

    As much as I hate Arrington and the "CrunchPad" because better $300 Tablet PCs already exist [ebay.com], I would have to disagree with you on this. Manufacturing a device and getting it to market is one thing, but advertising it is the other side of the coin. Hell look at the pet rock, anyone could literally make a "pet" rock at home for free, yet the idea made the creator a millionaire within 6 months [wikipedia.org], all through advertising and hype.

    I think Arrington was doing his fair share just blogging and creating hype over the product, he even managed to get it on slashdot 5 times. [slashdot.org] Announcing that the product is vaporware likely killed his credibility with blogs and fans worldwide, he will never be trusted again when he announces a new product.
  • Re:Hire a lawyer (Score:4, Insightful)

    by analog_line (465182) on Monday November 30, 2009 @03:25PM (#30273054)

    I very much doubt that an amicable settlement is desired by either party.

    FusionGarage's shareholders think they can use Michael Arrington's personal investment in the project as leverage to get more ownership of the product. This situation has apparently been unfolding out of the public eye for at least a couple of weeks, according to Arrington's post. They're playing hardball, and they figure that they can shove the terms of this new deal down Arrington's throat because he doesn't want the public embarrassment of not getting it done, and not wanting his baby to be stillborn. I'm sure that those shareholders have done this successfully with a lot of other wide eyed tech entrepreneurs. The shareholders probably believe that what is likely a minor investment in the grand scheme of things can be risked. If they lose it all because Arrington decides to call their bluff, they very well may not care.

    Michael Arrington more likely than not went into this in a totally naive manner. I wouldn't doubt that there are a number of things he did wrong that enabled this situation. However, that doesn't change the fact that his partners are now attemtpting to blackmail him, probably legally. They have part ownership of the IP, that means they have a voice. However, Arrington has that same part ownership. He also, as the saying goes, buys ink by the gallon. He has decided that he's willing to shoot the hostage and eat the loss rather than see the people who betrayed his (naive) trust profit.

    As he said, there's going to be lawsuits back and forth on this, and the place this will be resolved is in the court system, probably many years down the line.

  • by vlm (69642) on Monday November 30, 2009 @03:38PM (#30273196)

    If they had a shot-gun clause in their agreement, this would be a simple matter of one party or the other buying full rights and continuing on with the project, no legal system and multi-year drawn out court battles designed to put all the money in lawyers pockets.

    Only if both sides have roughly the same financial resources. Otherwise the poor guy can't possibly buy out the rich guy, so the rich guy has a huge advantage... I get the feeling, in this situation, the other guys have a lot more resources.

  • by node 3 (115640) on Monday November 30, 2009 @04:07PM (#30273740)

    Doesn't matter. The post clearly shows (if accurate) that Arrington owns a piece of the intellectual property that make up the CrunchPad.

    So, patents are *good* today? It's tough to keep track...

    Seriously, Arrington clearly bit off *far* more than he could chew. Any jackass can "invent" a tablet. "10 inch screen, wireless, touch input, long battery life, less than $300!" How hard is that? The hard part is actually designing, manufacturing, and bringing the product to market. Those things are *very* difficult. That's why all those great ideas everyone comes up with never happen.

    Arrington's posts about the CrunchPad were *always* exaggerated and idealistic in tone. These are good signs that he was deluded and had a fantasy of grandeur. This was compounded by the slashdot-types who would *love* a CrunchPad.

    Arrington clearly had the desire, the drive and the imagination, and even that's a lot. After all, he got a lot further than any of us would have. But he clearly didn't have what it takes to make the product real. If the product *really* was just "days away" from production, and if he *really* has done all the work people are attributing to him, he could just take his project to someone else. But he can't, because he really *didn't* do as much as he thought, and he really *wasn't* just days away from production.

    Too bad, too. Because the CrunchPad sure did *sound* like a great *idea*.

  • Re:Unfortunate (Score:3, Insightful)

    by Hijacked Public (999535) on Monday November 30, 2009 @04:09PM (#30273782)

    I think it is just a new level of fanboyism, to proclaim perfection as being the combination of an OS you've never used or seen installed on hardware you've never used or seen.

    I'm hodling out for FooOS on a FooPad running FooChip. Think of anything you might like to do, either with a computer or without. FooCombo can facilitate that.

  • by jbezorg (1263978) on Monday November 30, 2009 @05:05PM (#30274698)

    Playing the Devil's advocate: He also knows just how far he can push the legal envelope and that also takes well thought out claims and statements. In other words, just because he is a Stanford educated lawyer with former clients such as Pixar and Apple, doesn't mean he is incapable of these acts.

  • Re:Unfortunate (Score:3, Insightful)

    by Traa (158207) on Monday November 30, 2009 @06:26PM (#30275950) Homepage Journal

    Wasn't me, but could have been. I wouldn't be astroturfing, I'd be one of the many many engineers actually working on ARM processors. Are we not welcome here?

  • by watanabe (27967) on Monday November 30, 2009 @07:08PM (#30276652)

    I haven't read the contract, but I can tell you exactly what happened:

    Arrington has good idea, promises to market it, and work on it, plus provide a (modicum) of resources. Engineering Company gets involved. Capitalists get involved and put money in. Guaranteed: Arrington's dollars are all soft-dollars, time, energy, shared office space, PR, marketing, etc.

    In the end: it works. Woohoo!

    Now, Money guys look at the project, and they think: "OMG, this looks like it will ship and sell. We're all going to make some money, that's good. Let's review the Cap table to see what we'll be making. Hey, WTF? This Arrington guy negotiated like 35-45% of this project for himself, and all he's done is write a few articles about it, and pestered Fusion's engineers.. We could have paid like $20k to some PR firm to do that, how did he end up with 40% of this project?"

    They call the engineering guys and say: "Do we need Arrington?"

    Engineering guys say "Um, to build this project and ship it, we definitely do not need Arrington. Why?"

    Capitalists say: "Because he's worthless, and it would be WRONG to give him the stake he got in the project."

    Engineers say: "... um, ?"

    Capitalists say: "We're going to execute a clawback, drill Arrington down to 8-10%, and then you and we will get to split the remainder. This isn't being bad, this is being right and moral. He just got too much of the pie up front."

    Engineers say: ".. will you talk to him about it?"

    Capitalists say: "You're the CEO, you talk to him."

    Engineers " .. Okay. "

    Guess what, it happens ALL THE TIME. There are a number of possible solutions to a situation like this, but usually you need to plan upfront for it, and be ready. I don't think he was ready, which is too bad.

  • by Len (89493) on Monday November 30, 2009 @07:37PM (#30277066)

    The CrunchPad was supposed to have open hardware & software, right?
    It was almost finished and ready for release, right?
    So where's the hardware design & source code? Or was all that "open" talk just BS meant to get support from the slashcrunch crowd?

  • by PopeRatzo (965947) * on Monday November 30, 2009 @08:38PM (#30277706) Homepage Journal

    you'll find out that a fair number of your friends turn into psychopaths when money is involved.

    The same can be said for wives, siblings, politicians, nations, clergy, and probably the Buddha himself.

    Point being: the guy who suggested that money is the root of all evil was +5, Insightful.

    It's also why you'll never be happy if your main focus is on making (or having) money.

  • by eightball (88525) on Monday November 30, 2009 @11:33PM (#30278958) Journal

    A complementary story:
    Banker meets with Poor and learns that for an infusion of $20k, there is projected to be a return of $200k. This is based on a real product that can be at least partially demonstrated. Also there is evidence that the project is worth at least $20k due to the fact that Rich made that offer.

  • Re:Unfortunate (Score:4, Insightful)

    by lamapper (1343009) on Tuesday December 01, 2009 @01:31AM (#30279700) Homepage Journal

    Why? There are phones which run full Linux (N900, Android, ...), why an earth would someone want to have less powerful OS on a tablet?

    The Nxxx Nokia's are much more than mere phones, they are full blown Linux hand helds that will let you do just about anything a Linux PC, netbook or laptop will do. Why anyone would limit themselves with any other operating system is beyond me. With Linux, there are no tethering issues, no restrictions, nada, none. I call that "smart".

    If a phone will NOT allow you to run Linux, at least one of the many distros, well it just is NOT smart!

    For many years Nokia has been ahead of everyone offering these Linux hand held smart devices. Nokia N770 was the first, than came the N800 (FM chip on board); then the N880 and now the N900! If any tablet or hand-held is more limiting than any of the Nokia Nxxx hand held smart devices, why on earth would you waste your money buying it!

    Note: I am not saying that you must run Linux, only that you should be able too! Big difference when you have choices as any intelligent consumer would want to have, preferably at least three choices, as if you only have two choices, you have no choice!

    For me its not a matter of the hardware, but the books themselves, either I can read them (open data formats ONLY) on a Linux computer or I can not. If I can not, I simply will not purchase them. Keep it Simple!

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