Photo: Scott Beale (Laughing Squid)
[Editor’s note: TechCrunch founder Michael Arringtonjust stepped down from his post, a couple weeks after announcing that he will start his own venture capital fund. He had been investing in venture capital funds for a while before that, too.The author of this post, Tal Flanchraych, is not officially affiliated with Cabulous in any way, and that any views reflected in this letter are her own and not the company’s or any of its employees.]
It’s been hard to avoid all the articles about Michael Arrington these days, but one I saw posted several days ago about TC’s bias towards Arrington’s portfolio companies touched on an issue that really hits home for me: that of the disgruntled competitor. This is a story that needs to be told — not just for my startup, nor for the many others who have certainly suffered from TechCrunch ignoring our existence in favour of Arrington’s competing portfolio companies, but also for consumers and investors in the tech space whose perceptions have been shaped for years by TC’s coverage.
You see, in 2008 I helped co-found a startup called Cabulous (http://cabulous.com), which was the first app ever to allow users to see available taxis around them on a map and hail them instantly. In 2009, we closed our Series A with Band of Angels, Sand Hill Angels, and North Bay Angels, among others. We are currently raising a huge Series B and are going strong, with a very dominant presence in the SF Bay Area and several other cities. However, many people in the industry still don’t know about us because we’ve been totally ignored by TechCrunch for the past four years.
The number of times TechCrunch has written about us: 0.
The number of times TechCrunch has written about our competitor, Uber: 30.
(As an FYI, Uber launched in 2010 with almost identical functionality to ours, although they focus on helping people book town cars instead of taxis. They also accept in-app payments, which Cabulous does not do at this time.)
Now, it could be that we failed at our marketing PR efforts, even though we’ve appeared on the front page of the Examiner and on the official White House blog. It could be that Arrington thought our product sucked and wasn’t worth writing about, even though many of TC’s writers made factual errors by attributing “firsts” to Uber that were in fact features Cabulous had launched months before.
But where this gets really interesting is when you look at Uber’s investors. Uber’s funding has been led by Benchmark Capital — where Michael Arrington happens to be an LP. Because he did not directly invest in Uber as a company but funneled the money through Benchmark, he has clearly seen no need to disclose this relationship in articles he or his staffers have written about Uber. Now, I have no proof that the particular fund Arrington invested in is the one that funded Uber, but either way his exact relationship with Benchmark and whether he did or did not invest in Uber’s fund should have been explicitly disclosed, as it might have prevented readers from forming incorrect perceptions as to where Uber stood in regards to its competition.
Now, I have no hard feelings towards Uber or any of their founders and employees. Their strong brand presence and press have helped make the transportation space sexy again, which only benefits Cabulous, and I’m happy for them that they have really nailed their PR. However, in a world where a TechCrunch article is a milestone virtually every credible tech startup achieves, our company has had a difficult time establishing our credibility without that notch in our belt — and 30 notches in our biggest competitors’. For example, when we started raising our Series B, one of our potential investors asked us how we were going to distinguish ourselves from competitors who were further ahead of us, particularly Uber. What he didn’t realise was that we were in fact much bigger than Uber at that point in time; in fact, as of that month, we had ~4x the number of customers Uber had. However, the imbalance of TechCrunch press had led to the perception that Uber was dominating us, which may very well have hurt us in fundraising efforts, in addition to the obvious disadvantages relating to PR exposure, partnership opportunities, and acquisition of customers and employees.
In conclusion, I think that with most of the attention being focused on Arrington himself due to his larger-than-life personality and questionable ethics, no one is telling the story of the companies that have suffered from his conflicts of interest. I’m certain that Cabulous is only one such story of hundreds, if not thousands.
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