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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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  • Unfortunate (Score:2, Interesting)

    by milas (988484)
    But here's to hoping it relaunches with an ARM processor running Chrome OS! This seems like the perfect application for it, really.
    • Re:Unfortunate (Score:5, Interesting)

      by TheModelEskimo (968202) on Monday November 30, 2009 @03:24PM (#30273040)
      What's up with all the Chrome on ARM astroturfing around here...? It's quite obvious, guys.
      • Re: (Score:3, Insightful)

        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.

      • Re: (Score:3, Insightful)

        by Traa (158207)

        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 jhol13 (1087781)

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

      • 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!

  • 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) * <eldavojohn@gmFREEBSDail.com minus bsd> 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.

      • by h4rm0ny (722443) on Monday November 30, 2009 @04:40PM (#30274288) Journal

        Arrington is a Stanford educated lawyer with former clients such as Pixar and Apple. If he's making claims like this in his blog, they're not going to be spurious. He'll know what he's doing.
        • Re: (Score:3, Insightful)

          by jbezorg (1263978)

          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.

          • by h4rm0ny (722443)

            Granted. But I'm basically saying that if you don't have a solid case, posting the sort of things on his blog that he has done would be a very stupid mistake. And his career inclines me to think that he's not likely to make such a mistake. Ergo, he means it and will be tearing them a new one. I did look for information from Fusion Garage on this but they have nothing on there yet (fair enough, it's very soon to have responded and they may not publicly anyway). But in the absence of counter-evidence, it doe
    • by WaywardGeek (1480513) on Monday November 30, 2009 @02:47PM (#30272626) Journal

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

      I'm guessing you've never started a company. When you do, you'll find out that a fair number of your friends turn into psychopaths when money is involved. This is why the best number of partners in any new venture is 1. I got screwed by AMIS in a somewhat similar situation. We co-developed the Express Array using our technology from cell design to routing. The first chip came out and worked 8 months after we started this very aggressive project. The day the chip worked, AMIS basically said "we don't need you anymore. Fuck off and die now." For AMIS, the entire project was delayed a year. It was incredible, unexplainable stupidity. And yet, it's an entirely common story.

      • by bckspc (172870) on Monday November 30, 2009 @03:50PM (#30273414) Homepage

        I was just going to post something to the same effect. A good friend of mine was pushed out of his company by his partner, board, and angel investors when his invention was close to launch. Another friend turned evil on me when our own start-up company was approached about acquisition. Even though we were 50-50 partners, I still feel like I got shafted. And every slashdot reader knows that Windows is dominant not because of its technical merits, but because of legal -- and illegal -- bullying. Screw or be screwed seems to be the name of the game. Sometimes it seems the only way to win is not to play.

        • by lennier (44736)

          "Sometimes it seems the only way to win is not to play."

          Or to nuke Las Vegas.

      • by asackett (161377) on Monday November 30, 2009 @04:13PM (#30273862) Homepage

        If I had mod points I'd award a quadrillion of them for:

        I'm guessing you've never started a company. When you do, you'll find out that a fair number of your friends turn into psychopaths when money is involved. This is why the best number of partners in any new venture is 1.

        I've seen this too many times. For anyone who hans't: If you want to know what a partnership is like, here's what you do: Come up with a great idea, then work yourself nearly to death over 18 months to two years while ignoring your family, friends, and health. When the idea has been made tangible and needs just a few minor tweaks, hand over all of your work to someone you'll never want to see again.

        • Re: (Score:3, Insightful)

          by PopeRatzo (965947) *

          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 bvankuik (203077) <slashdot_bvankui ... uik.nl minus bsd> on Monday November 30, 2009 @05:00PM (#30274616)

        Problem is that without partners, you do not have any leverage whatsoever. I am sorry for playing bullshit bingo, but leverage means here that with two partners, you can do more together than each partner separately could have done. Doing everything yourself is a good way to limit yourself or put a weakness in your product (because for instance you know jack shit about electronics which plays a nontrivial role in your product).

        I am a business owner and have run a couple of projects for clients. I do not have any partners but I have the same supplier for over two years. We have a client-supplier relation but even there, you need the combination of rules and understanding. But lately I notice that we will never grow beyond calculating costs for the next project. You need partners for that.

        If that is fine with you, then do it yourself. I know I will. I am just not a team player and way too bone headed and authoritative to play nice with a partner. However that means a big limitation (besides the obvious strengths).

      • Re: (Score:3, Informative)

        by Evets (629327) *

        The only way to ensure that you will move forward along with a company you started is to ensure that you are not a replaceable asset to the company. Once big money investors get involved, you can expect that any founders will be pushed out the door unless they have real long term value. Technical knowledge of an existing invention != value in a lot of cases. Technical knowledge of a future, more profitable invention might, but even then there must be faith in your ability to complete the task combined wi

  • by eldavojohn (898314) * <eldavojohn@gmFREEBSDail.com minus bsd> 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.

    • Re: (Score:3, Insightful)

      by postbigbang (761081)

      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....

      • by cabjf (710106) on Monday November 30, 2009 @02:29PM (#30272418)
        Unless they rework everything that touches the co-owned intellectual property, there is no way Fusion Garage can legally ship anything. Arrington said as much and stated that a lawsuit would be waiting for Fusion Garage should they attempt to ship anything without CrunchPad's approval.
        • Lending further suspicion to the whole matter....

        • by jythie (914043)

          Which makes me think Fusion Garage had a bit of group think between a bunch of non-lawyers that convinced themselves that they would get away with something like this.

        • by iluvcapra (782887)

          What I don't understand is why Fusion Garage owns any of the intellectual property whatsoever... From the TFA it's not even clear that Arrington properly retained sole ownership of the "CrunchPad" trademark, it's all intermingled and joint. He says in TFA it's like "Foxconn calling Apple and telling them they are stealing the iPhone," but it isn't like that at all. Foxconn is a bloody vendor, not a partner.

          You'd think the least he would have done is had non-compete language in the recision provisions of t

      • by COMON$ (806135)
        Ya, and in 2 years we will see yet another RIM style lawsuit, this seems to be the style of things now adays. Either way, this is the first time I have seen this device and I sure would have bought one. But I think the apple tablet might be along the lines of what I will end up getting.
        • Who knows? Tablet vaporstuff is in vogue... even Barnes and Noble can't ship one. Bezos is selling 'em like hot cakes.

          I think the patent on paper has expired.YMMV.

    • 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.

      • Re: (Score:3, Informative)

        by PitaBred (632671)
        Meh. I'm holding out for a Nook [barnesandnoble.com]. More open, more features, same price.
        • Re: (Score:3, Funny)

          by SydShamino (547793)

          Meh. I'm holding out for a Nook [barnesandnoble.com]. More open, more features, same price.

          My wife's is supposed to ship today. She placed her order within an hour of announcement and hopefully won't get hit by the 2010 bump.

          • Re: (Score:3, Funny)

            by Daniel_Staal (609844)

            I got notification from UPS a bit earlier today that they had a package for me. Since the only package I'm waiting on at the moment is a Nook, I think your wife will be getting hers. (I ordered a few days after the announcement.)

        • That thing looks great, too. But how many books are available for it? Until most publishers wise up and start offering DRM-free books, the size of the library your ebook has access to is an extremely important factor.

          • by vlm (69642)

            That thing looks great, too. But how many books are available for it? Until most publishers wise up and start offering DRM-free books, the size of the library your ebook has access to is an extremely important factor.

            Nobody would ever trade ebooks like they trade music. Nope.

          • Actually, that's one of the advantages of the Nook in my opinion: It uses an open, standard format (EPUB) as it's normal book format. The format supports DRM, but doesn't require it, and there are quite a few ebook stores out there already selling books in epub format. Nearly every other ebook reader on the market is also supporting the epub format. (The exception is the Kindle, which uses a proprietary format.)

            Current bestsellers are likely to be DRM'd if you can find them, but most of everything else i

            • In slashdot parlance, you are spreading FUD. The Kindle most certainly uses non-proprietary book formats. You can use mobi, txt, and pdf directly, for example. Any other format can be used by via conversion.

              Having a more limited selection of books for the Nook is not an advantage of the Nook; it's an advantage of the Kindle.

              • Re: (Score:3, Informative)

                by Daniel_Staal (609844)

                mobi is a proprietary format (it is owned by a company, and they control the format), and Kindle's version isn't straight mobi, it's a slight modification. Txt and pdf aren't ebook formats. (They are text and e-paper formats, respectively. Yes, there is a difference.) And the Nook can use those as well.

                epub is a true open format: available to any without licensing fees and such. Software is available freely to convert books and other text into it, and out of it should you so choose. (Provided they hav

                • Re: (Score:3, Informative)

                  by Lord Ender (156273)

                  I'm not sure if your confusion stems from the fact that this is to complicated for you to understand, or that you don't want to understand.

                  First, the Kindle supports mobi. Regular, non-DRM mobi format. Your claim otherwise is factually, indisputably false.

                  Secondly, it's the number of books supported that matters. If a book is only available in a format the Nook can't read but the Kindle can, the fact that the Nook supports your favorite format doesn't count for shit.

                  So in conclusion: both the Kindle and the

                  • Ok, double-checking: The Kindle supports both it's own version of mobi, and the normal mobi format. Sorry, I was confused there.

                    Mobi is not an open format: It is based off of an open ebook format, but it is a proprietary format by the Mobipocket company, who licenses it and controls what and how devices can read it.

                    ePub is an open, documented format by an international standards body, that can be implemented freely.

                    Amazon lists that they have over 360,000 ebooks available.

                    B&N lists just under 105,000.

                    T

          • by Qzukk (229616)

            Looking at the specs [barnesandnoble.com], it reads PDF, eReader and EPUB in addition to B&N's own format, so a lot of ground is covered outside of just B&N's store (eg Project Gutenberg) but you're right, it will be up to publishers to say "we want nook users to be able to read this" either through B&N or some other means.

            If B&N moves forward with opening it to developers (even if we're only allowed to use wifi) I will buy at least one.

    • by corbettw (214229) <corbettwNO@SPAMyahoo.com> on Monday November 30, 2009 @02:38PM (#30272532) Journal

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

    • Re: (Score:3, Interesting)

      by jfruhlinger (470035)

      Translation: I'd like to cash in on Arrington's hard work.

      I have no reason to doubt that Arrington is being screwed here, and that he does in fact have intellectual property rights that are being trampled on, but how much hard work did he actually do on this thing? My understanding is that he mostly said, "I want this thing with these specs at this price, make it happen" and his manufacturing partner is the one that actually built it.

      Arrington is providing (a) his services as a sort of ideal end-user (i.e. if this one tech-savvy guy really, really wants a thing t

      • Re: (Score:3, Interesting)

        by interval1066 (668936)

        ...but how much hard work did he actually do on this thing?

        Doesn't matter. The post clearly shows (if accurate) that Arrington owns a piece of the intellectual property that make up the CrunchPad. Its as if a bunch of different people got together to make a pizza chain with one guy coming up with the name, logo, mascot, and business plan, and the other guys deciding to ace that first guy out yet retaining all of that first guy's input. Its a blatant rip-off of Arrington, no matter how much work he did. If you own a piece, you own a piece. That fact isn't up for de

        • 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*.

          • I'm not arguing in favor of patents. If you start a business and I steal it from you, not just take the idea but tell you to your face that you were a partner but are no longer, and my lawyer slaps you with filed papers to that effect, is that a patent issue? Or a simple civil case, name your poison- say theft, breach of contract, breaking of agreements, christ, I could go on...

      • by Culture20 (968837)

        I have no reason to doubt that Arrington is being screwed here, and that he does in fact have intellectual property rights that are being trampled on, but how much hard work did he actually do on this thing? My understanding is that he mostly said, "I want this thing with these specs at this price, make it happen" and his manufacturing partner is the one that actually built it.

        This needs to be propped up as a shining example of what will happen to all U.S.A. IP companies in the next century unless they get manufacturing back in the US again. It's just the start of the rest of the world realizing: "Hey, we're making this stuff; you're just the guys who gave us the ephemeral part." (well, not really, China's realized it for a long time now, but they just make off-branded copies)

      • by Myrv (305480) on Monday November 30, 2009 @03:37PM (#30273186)

        I have no reason to doubt that Arrington is being screwed here, and that he does in fact have intellectual property rights that are being trampled on, but how much hard work did he actually do on this thing? My understanding is that he mostly said, "I want this thing with these specs at this price, make it happen" and his manufacturing partner is the one that actually built it.

        Well, to Arrignton's credit he (or the TechCrunch side of things) did build the first prototype [techcrunch.com]. He also provided office space for Fusion Garage and no doubt was integral in the testing. There's also a lot of talk about setting up distribution and funding although it's hard to say how much of that was Arringtons doing. Overall I would say Arrington has contributed at least an equal share into the project.

  • They're right.... (Score:2, Interesting)

    by cephalien (529516)

    It -isn't- real.

    Not until they're actually being produced.

    So yes, this is vaporware (at least for now)

  • Arrogant Power Play (Score:2, Interesting)

    by FireIron (838223)
    I would have been a customer for this device, but after this I will not now or ever buy anything under the Fusion Garage brand.
  • by VMaN (164134)

    I wonder if I'll still stick to my principles if the "wrong" company will produce this thing..

  • 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.

    • by pitchaxistheory (844824) on Monday November 30, 2009 @02:54PM (#30272676)
      I've been keenly following the development of this device in the hopes of getting one before Christmas. Anyway, here's a newspaper article dated Aug '09 about the company behind all the "heavy lifting". Seems that they got into a partnership with Arrington with the hopes of him being the marketing guy. http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_410527.html [straitstimes.com]
    • Re: (Score:3, Insightful)

      by iamhassi (659463)
      "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 [wikipedia.org]
    • 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.

      Uh, try doing this project *without* a money guy, and see how far you get. Then you will know what he is bringing to the party.

      I'm an engineer, too, but you have to recognize that to do something like this requires a lot more than engineering.

      Brett

    • by tbuskey (135499)

      Replace CrunchPad with Macintosh and Arrington with Jobs if it helps outline who does what.

      Ok, Jobs probably got into lots more detail, but he's not an engineer or programmer. Jobs certainly was a major factor in the Mac's design.

      I'd say Arrington is probably similar with the Crunchpad. He provided 2 prototypes, office space, access to Silicon Valley capital.

    • Vision and (as much as I hate to say it) marketing are indeed valuable parts of developing a product. Do you think Bill Gates wrote all of the code that made Microsoft what it is? Maybe in the DOS days, but I seriously doubt that he contributed a significant portion of the 29+ million lines of code in Windows 2000 [wikipedia.org]...or even a significant portion of the 4-5 million lines of code in WinNT3.1. No, Gates was the guy with the vision and the connections. How about Steve Jobs? From what I understood, Woz did
    • Re: (Score:3, Insightful)

      by watanabe (27967)

      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 so

  • 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.

    • 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.
      • I wish more people would do things that way.
        Keeping your trap shut for your own self-interest may be the smart thing to do.
        But letting everyone else know just how douchey the other guy is may end up doing everybody else a favor.

        It's like those non-disclosure terms for a lot of liability settlements. Its great for the one guy who would otherwise get dicked over, but then the guilty party is free to continue with their bad practices potentially harming lots of other people who would otherwise have been forew

    • 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 h4rm0ny (722443)

      Sometimes it's worth taking some pain yourself in order to punish the other party. It may not be a good short-term strategy, but it can sure as Hell be a good long-term strategy. Feels good, too.

      Love the sig. by the way. Come to think of it, nice nick, also. ;)
  • by mpapet (761907) on Monday November 30, 2009 @02:46PM (#30272624) Homepage

    This is pretty run-of-the-mill back stabbing in OEM/ODM business.

    1. The manufacturer sees an opportunity with a weak 'partner'
    2. Screws the partner.
    3. Profit!

    The thing is 'Fusion Garage' would have screwed him even if they worked a geographic restrictions deal out. If there was any meaningful market acceptance, any number of bigger OEM's would have taken their lunch in ~24 months.

    Sad it has to go like this, but this very common unless you are an HP/Apple/Dell. Typical chicken-egg capitalism problem.

  • Even a geek with full-blown asperger's syndrome could predict how Arrington and his crew would react to this approach to renegotiating the IP rights. If they had been at least moderately smart about it, they would have come forward with some sort of half-serious offer like buying out some of TechCrunch's equity in the IP or agreeing to assume TechCruch's liability for the business side of getting it out there, warranting it, etc. in exchange for a greater cut of the pie.

    This... just comes off as a blatant a

  • by slyborg (524607) on Monday November 30, 2009 @02:55PM (#30272680)

    The only reason anyone is talking about this is because of Arrington's relentless zeal for self-promotion. I never thought this thing was going to happen, and in regard to keeping Arrington's name in circulation, it was a smashing success. The only thing missing from this soap opera is that Google/Microsoft/Apple diabolically combined with SMERSH to stop the CrunchPud before it could lead to world peace.

  • Interesting bit is that some were already speculating that the Crunchpad was not real."

    Internet claims unreleased product is vaporware. Not interesting.

    Quoted link in TFS is referring to googlephone, not crunchpad FWIW.

    Whether these claims of backstabbing to death a product just before release and if it is par for the course as some posters have claimed is what flips my interesting bit.

  • It went hours without crashing.

    ...Good selling point.
  • 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.

    • Re: (Score:3, Insightful)

      by vlm (69642)

      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 IpSo_ (21711)

        So? The "rich" guy needs to make the "poor" guy a reasonable offer, because as per the shot-gun clause any offer that is made first can be countered by the other party at the exact same price. So if the "rich" guy tries to lowball the "poor" guy, it could easily come back to bite him.

        It basically comes down to this, if the "poor" guy can't get his hands on enough capital to meet the original shot-gun clause offer, likely the project isn't worth it to begin with, but at least he gets to walk away with some c

        • by dlgeek (1065796)
          That's not necessarily true. Lets say Rich and Poor both have equal equity in a business, they've been putting in significant cash (lets say it's been $20K each) but it's not there yet. There's another $20K until the product is ready to ship, at which point it will bring in $200K in revenue. (This means each partner would have put in $30K for a $100K result, giving $70K profit each). Rich has a lot of cash on hand, Poor doesn't (he only has the $10K to finish left). Rich offers to buy out Poor at $20K. Now
          • by IpSo_ (21711)

            Okay and not having a shot-gun clause results in this:

            Rich telling Poor to go screw himself, taking whatever he can and continuing to build the project and sell it... Poor doesn't have the 10s of thousands of dollars to take Rich to court where there is still a 50/50 chance at best that he may or may not walk away with anything other than a fat lawyer bill. At this point the court has to decide who is in the "wrong" when there may or may not be clear cut terms.

            I've personally been involved with the sale of

          • Re: (Score:3, Insightful)

            by eightball (88525)

            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.

    • I've actually seen one of these clauses invoked in a local business here. The hostile buyout offer was submitted and the guy responding gladly took the terms of the offer, as opportunity to buy out the originator.

      The problem was, the originator of the offer tried to change his mind on the deal, and tried to renegotiate the buy/sell price and sued, to raise the price.

      While the suit was in court, proceeded to try to destroy the business and all the various partnerships that were built up over the course. Abou

  • 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: (Score:3, Funny)

      by uvajed_ekil (914487)
      Oh come one now, this is the guy who brought us the _______________, which at only $________ is super amazing, because it can __________ and __________, and is far superior to its top competitor, the ____________.


      *The above sentence is to be completed at some point in the future, if and when it ever becomes applicable.*
    • Re: (Score:3, Funny)

      by CodeBuster (516420)

      This guy is a dick and always has been; it's kinda nice to hear he's having trouble!

      Nothing like a little Schadenfreude [wikipedia.org] to brighten one's day after all...

    • Are you forgetting Techcrunch (and several related sites) itself? I'd say he already did the startup thing on his own and appears to be doing quite well.

      Also he was co-founder of another startup a few years ago which deadpooled. So he's been there, done that too.

  • Leo LaPorte is laughing his ass off and noting that Karma is a bitch.

  • At least the company _let_him_know_ they were gonna cut him out.
    There is nothing stopping them from going ahead with production and marketing.
    As in the music business: if there's a profit, then there's a problem.
    If the lawyers can't feed it's moot.

  • Don't you see? The "shareholders" never had any intention of letting this go to market. This is not about an attempt to steal intellectual property. It's about eliminating competition for similar proprietary technology (Nook, Kindle, Apple's eventual tablet, etc.) The large media players are doing everything they can to reign in the Internet. The ruination of the CrunchPad is a victory for them.

  • I have a hard time believing that they were days away from launch, and there is not a stockpile of units somewhere with the "crunchpad" branding written all over them. I could see the deal falling through days before manufacturing begins, but once you actually make the devices it's kinda the point of no return.

    Unless they're just going to hit a bargain bin in some third world country. But it sounds like Arrington is already too heavily invested if it was indeed days away from launch.

  • 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 tlambert (566799) on Monday November 30, 2009 @09:11PM (#30278008)

    Arrington pulled a SourceForge.

            http://www.techcrunch.com/2008/07/21/we-want-a-dead-simple-web-tablet-help-us-build-it/ [techcrunch.com]

    He declared a project, didn't put much in beyond the idea for the project, and then expected people to flock to the project and build it for him. Very much the same way people declare projects on SourceForge, and then expect volunteer programmers to come out of the woodwork and build whatever their pet project happens to be.

    The only difference here is that it involved both hardware and software, and not just software.

    I went to the Internet WayBack Machine and read all of the blogs from Fusion Garage (the actual site is currently down, probably intentionally), and it looks like all of the software was done by them, including the OS, and it looks (from Arrington's blogs) like a lot of the hardware was done by Intel.

    I don't mean to discount the value of vision or publicity, but really, he intended to Open Source everything about the tablet when he declared the project, and I don't really see a lot of value being taken from him in that case, since he wouldn't be building hardware anyway. The only money would be in margin on the hardware if the software was all out there. A lot of people have posted similar specifications for what they'd like to see in a tablet computer, and the only difference between them and Arrington is Arrington has a lot of self-publicity and got a startup to bite on the bait to actually build the thing.

    Arrington might have some arguments with regard to industrial design, but the prototype hardware was not built by him, and the software that made that hardware live and breathe was definitely not his.

    I've worked at combo hardware/software startups, and I've worked at software-only startups (including my own), and universally, the hardware in the hardware/software startups was all about minimal COGS and industrial design (being at Apple now, that's pretty much all there is). The value-add over commodity hardware is that it isn't "cheapest vendor of the part of the day" (so the hardware is reliable and not crap because of constantly retooled assembly lines), and it's the software. When Apple builds a laptop, it doesn't build hardware, and it doesn't build software, it builds systems. The people who don't get that and churn out 1.5%-4% margin crap do so at their peril.

    My reading of things is that Arrington is no Jonathan Ive, and he's no Steve Jobs when it comes to design of hardware or software.

    Fusion Garage may have taken his idea and run with it.. and they want to cut him in on profits from something, the intrinsic value of which he intended to give away for no profit, but they don't seem to be ripping him off to do it, although they do seem to be leveraging as much as they can to get him to accept a minority role with regard to what he brings to the table (which, per the above, by my reckoning, isn't much; sorry, Arrington).

    As more than one V.C. has told me in the past, the point is not the idea; there are millions of good ideas that go unfunded all the time (I'll point at SourceForge again, where "funding" equates to "provision of manpower necessary to complete a project"); what a V.C. funds is the ability to execute on a vision, no matter whose vision it is, and the team behind that ability to execute on the vision and bring a product to market. 1 in 10 entrepreneurs get funded; 1 in 10 of those fail in the first year. That's only a 1 in 100 chance of being around after a year.

    Arrington's failure is no less spectacular than anyone else's in that 99 out of 100 failures, he's just made it more public by ranting about it.

    Ironically, the idea may still not be a failure, merely a failure on his part to control the thing which was built on his (and a lot of other peoples similar) idea, if Fusion Garage or someone else simply continues on and executes on it.

    Good luck in your future endeavors, but don't think that by declaring an idea publically that you've built or created anything.

    -- Terry

A sheet of paper is an ink-lined plane. -- Willard Espy, "An Almanac of Words at Play"

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