TechCrunch Pump n Dump

TC has always been a big scam under the guise of journalism. And the mailbox example is not even a very good one. I still remember, when I used to frequent TC, they had glowing reviews for startups they were directly involved with. Most of the time they didn't even bother to mention the conflict of interest.<p>Not to mention Arrington and his monthly quota of manufactured drama.<p>Worst part, TC always did and still does (though not as much), quite frequently cover most of the frontpage of HN with regurgitated 1 paragraph "news" that has been already discussed to death on other frontpage submission.<p>How the hell and why the fuck, I have no idea...

I have two observations -<p>1)Our society is structured in pyramids across multiple dimensions. On top of the these pyramids are powerful cliques. The pyramids that are predominantly influenced by the business world have even stronger cliques at the top. People at the top try to optimize for their success, and its only human. So ya, this who pump and dump is not surprising, happens everywhere.<p>2) Mailbox is a super-sexy acquisition for Dropbox. Because of my work, I am in this unique position to look deeply at around 70 online backup and cloud vendors, their features, their social signal, their pricing etc, their usage scenarios, their usage feedback and I think, given the uber-competitiveness of the space, most of these vendors will either a) move upstream and try to increase the real estate of their clients (Box trying to get into document editing suite is a prime example) or b) have a differentiated offering like egnyte. With this context, I think, the mailbox acquisition is an absolute bomb. I am doing further research on this topic and will hopefully publish it soon.<p>So yes, the hype-cycle was at work, but its normal and dropbox founders and executive team were pretty much certain they needed to this.

Hold on. MG Siegler and Arrington were investors in Mailbox? This kind of conflict is really unacceptable. Bloggers need to get real about ethics if they want to be taken seriously as journalists.

When is this cycle going to end?<p>It seems like every time a high profile acquisition takes place there’s a vocal group of people blogging about how the company in question isn’t really “world-disrupting shit Silicon Valley does”.<p>Have you seen Silicon Valley recently? This is exactly what it does. There’s still a group of companies out there who are taking big chances and trying amazing things, but by and large the ecosystem is full of stuff like Mailbox. Well-made, highly polished software that caters to a specific problem that people with money complain about. There’s absolutely nothing wrong with that business model, but don’t kid yourself into thinking that this is some huge affront to the innovation engine that is Silicon Valley.

Yes, this is how it works in terms of startups trying to gain traction. I imagine it's not just techcrunch that works this way. The startup I worked for got immediate coverage and 60% of the article wasn't even true. Inflating traffic numbers to the nearest million seems like a common practice.<p>If you know someone, then there is a 100% chance of getting coverage. For everyone else its a crapshoot and certainly not in your favor.<p>Here is my example:<p>I tried to get coverage for a fantasy sports startup that solves real problems surrounding player news and getting lineup advice. It even tells you who to pick up on the waiver wire. Got no coverage. Had no exciting investors. It was boring to them.<p>However, once I launched a side project that enhances the readability of reddit iama's, then I got immediate coverage without even asking for it.

The people who propose these inane conspiracy theories always forget one critical component: why the acquirer was such a willing patsy.

I don't know the Dropbox guys but I doubt they take investment advice from Techcrunch. It also doesn't seem likely that Dropbox with its 100 million users bought Mailbox for their 750,000 users.<p>Why is it so hard for some people to stomach that maybe Dropbox bought Mailbox for the tech or the talent?

Sigh. Doesn't matter what the facts are, this point of view that there is a "conspiracy" always emerges. There is a strange counter phenomena on the other side too sometimes. Sometimes a person at a company and get acquired or go public who suddenly has a high net worth, can't internalize the fact that they are suddenly rich and the people perhaps sitting next to them aren't. A bit flips and they decide its because they are just that smart/good/talented. (which is, for them, easier than just being lucky). It is a weird thing to watch, I saw dozens of cases of it at Sun when Sun went public and recognized it in folks at Google as well.<p>The brain tries to "explain." Sometimes really implausible scenarios seem to be the best answer [1]. For this particular scenario (TechCrunch somehow "selling" Mailbox to Dropbox) some pretty savvy and experienced people would have to have been "tricked." While the probability is non-zero that that is the case, it is highly unlikely. And the much more boring answer that the Mailbox folks had created something of value to the Dropbox folks remains.<p>I am more curious why Brian is so invested in the lack of standards at TechCrunch. Why does he care? It's not hard to see they rate somewhere been the Enquirer and the Daily Post in terms of what they will publish to get page views.<p>[1] Alien abduction is one of those areas where people would rather believe they were abducted by aliens than what ever really happened.

I have a hard time understanding why Dropbox would pay $100M. Compared to the Instagram acquisition, this seems like a blunder.<p>The talent - Maybe worth $10M at the high end, probably same for Instagram<p>Future profit - Difficult to see how this app would be profitable, but maybe it could make a few million a year if it swept the app store. Instagram had similar long term monetization potential to facebook.<p>Technology - Indexing gmail and keeping metadata on each message. A difficult task to scale, but not $10M difficult. Instagram was handling significantly more data, but Facebook certainly didn't need the technology.<p>Users and momentum - Don't see much value for Dropbox here with 700K users. Instagram was growing rapidly and had 20M+ users.<p>Time - Dropbox wants to be in the email and communications space... seems like the could have developed something in 6 months for a few million. Instagram would have been difficult for Facebook to catch up with, since head starts matter in social. Email apps don't have the network lock-in, so there is much less reason to worry about time.<p>Competition - There was no threat to dropbox. Instagram appeared to be dominating a demographic and use case for social, and could easily be seen as a threat to Facebook.<p>However, Dropbox did pay that much. We have to assume there was a reason other than a Techcrunch article.

I think the OP is giving Tech Crunch a wee bit more credit for king making than they deserve.<p>Mailbox is a great case of playing the hype game to perfection. Massive hype, perfect fit for a larger "startup" playing with house monopoly money - it all adds up to a huge win.<p>Just be happy for the guys. They haven't even gotten started yet- let them give it a go.

I am glad someone is actually writing about this. We live in an era where we've learned to accept the things around us - No matter how good or bad they are, but we've over the last few decades, started to accept the things that are going around us, and accept compromise, slowly.<p>News organizations like Techcrunch, Gizmodo, etc. are some of the most arrogant, unethical organizations you will ever find on this planet. I say unethical because of how they work. In the REAL WORLD, journalism works by having REAL journalists, who travel places, meet new people, explore new problems, explore un-identified areas of coverage and report them as news.<p>But, the internet revolutionized journalism so much that it's so screwed up right now. In the online world, all you need to call yourself a 'journalist' or a 'media organization' is just a hosted Wordrpess blog with a custom domain. And that's just it. The worst part is the content - Where journalism by itself is known for the kind of content it provides, this is totally eliminated. In many ways, an online journalist has not much work to do, when say compared to a real life journalist. The information he wants to report on is RIGHT THERE. Just go to news.google.com, news.ycombinator.com, reddit.com, find some controversial (most cases) topic to write about, add some opinions and publish it as a post. BINGO! Just watch the comments pour in and pageviews explode! And profit!!!<p>Do you know what is unethical about this setup?<p>These so called 'journalists' are basically thieves. They 'steal' from an open community like reddit or hackernews, add their own flavors and spin it off into a new article. I want you to browse through the whole list of articles on Gizmodo and Techcrunch and compare it with the sh*t these organizations write and tell me this is not true. You will easily notice that majority of the content is ripped off from the open communities.<p>These so called organizations and the idiots calling themselves journalists are a shame to the true essence of Journalism. Because what they are supposed to write about is the news and not what they think of it. I am sick of reading anti-Google posts and pro-Apple (or vice-versa) articles on these shitty so called 'news' sites. I want to read true, unbiased, uncolored content. I want to read the news and not what a random author thinks of the news. And I know someday someone will realize this and create a true 'Wikipedia' for news. And that will be the greatest 'FUCK YOU' sent to these unethical organizations in the history of man kind, ever.

(Disclosure: I independently comment a lot on TechCrunch articles.)<p>While I definitely agree that the acquisition of $100 million is absurd, I don't think it can be solely attributed to TechCrunch's coverage, given that other sites like GigaOm and The Verge also gave large amounts of coverage.<p>The relationship between the writers/CrunchFund is overstated: <a href="https://twitter.com/ryanlawler/status/313297205186408451" rel="nofollow">https://twitter.com/ryanlawler/status/313297205186408451</a> <i>EDIT: article updated with Tweet</i><p>Also, large amounts of TC press does not mean success: (see <a href="http://techcrunch.com/tag/airtime/" rel="nofollow">http://techcrunch.com/tag/airtime/</a> )

Guys, this is an under-informed and reactionary post, which grossly simplifies the situation in a way that is insulting to Dropbox, TechCrunch/AOL, CrunchFund, and the Mailbox/Orchestra team. It's also kind of upsetting that this post is at the top of HN and getting a kind of froth-at-the-mouth reaction that it is.<p>It's well-known and indeed massively controversial[1] that there's a CrunchFund/TechCrunch conflict. Arrington <i>left TechCrunch</i> because of his desire to return to investing about a year ago[2], after the short stint at doing both journalism and investing in parallel. According to CrunchBase, this was coincidentally the same month that CrunchFund invested in Orchestra[3]. Both he and MG returned in October 2012[4], but both have hardly written any TC pieces since then. Why? Probably because they're quite busy with their day jobs running CrunchFund.<p>Additionally, on many posts with CrunchFund conflicts, they have been called out at the end of each article (see <a href="http://techcrunch.com/2011/06/30/andreessen-horowitz-adds-jeff-jordan-as-partner-leads-5m-likealittle-series-a/" rel="nofollow">http://techcrunch.com/2011/06/30/andreessen-horowitz-adds-je...</a>). They probably have been a bit lax about that as of late since the CrunchFund guys aren't really involved in TC (compared with the often torrential output of most other staff writers).<p>TechCrunch coverage did probably get Mailbox some users, and CrunchFund as a VC probably did add some value to their company, but the effects and importance of TechCrunch itself are <i>wildly overstated</i>. Probably more important is that the Mailbox/Orchestra team is <i>top notch</i> at making incredible mobile products (Orchestra won one of Apple's Top App award in 2011 <a href="http://blog.orchestra.com/orchestra-is-productivity-app-of-2011-in-the" rel="nofollow">http://blog.orchestra.com/orchestra-is-productivity-app-of-2...</a>), had <i>hundreds of thousands</i> of active users within a very short amount of time (with only a tiny insignificant fraction of those coming from TC), and Dropbox can probably provide a better home for a lot of the Really Hard problems with email at that kind of scale.<p>Like I get why OP seems alarmed, but it's pretty naive to think that TechCrunch matters in any important way to the success or financial outcome of a company. Just read about the "TechCrunch pop"[5]; their users rarely not stay with or give lasting value to a product. If you want to belittle the <i>astounding</i> accomplishments of the Mailbox team, at least don't pick something like TechCrunch to do it over.<p>[1]: <a href="http://www.nytimes.com/2011/09/02/technology/michael-arrington-techcrunch-blogger-to-invest-in-start-ups.html?_r=0" rel="nofollow">http://www.nytimes.com/2011/09/02/technology/michael-arringt...</a><p>[2]: <a href="http://www.adweek.com/news/technology/michael-arrington-leaves-techcrunch-134791" rel="nofollow">http://www.adweek.com/news/technology/michael-arrington-leav...</a><p>[3]: <a href="http://www.crunchbase.com/company/orchestra" rel="nofollow">http://www.crunchbase.com/company/orchestra</a><p>[4]: <a href="http://techcrunch.com/2012/10/23/getting-the-band-back-together/" rel="nofollow">http://techcrunch.com/2012/10/23/getting-the-band-back-toget...</a><p>[5]: <a href="http://viniciusvacanti.com/2012/11/19/the-depressing-day-after-you-get-techcrunched/" rel="nofollow">http://viniciusvacanti.com/2012/11/19/the-depressing-day-aft...</a>

For $100 million, Dropbox just got a glimpse at every current and future Mailbox user's inbox.<p>That's actionable data that's otherwise difficult to get without starting your own webmail service. This comes at a time when Dropbox seeks to expand the services and integration-points to provide other services - this might pay-off in the long run as more than just a tool to complement email.

Well, that could've been written better. There's clearly a conflict of interest, but on the other hand Mailbox seems like a useful application. Even great products benefit from hype.

1) We're not in a position to value the acquisition.<p>2) TechCrunch is more of a PR outlet than news source. It has an occasional news story, but the vast majority are PR pieces.<p>Surely Mailbox met the minimum bar for some glowing PR pieces in TC, so this controversy is misplaced.

This post basically says that the guys at Dropbox are idiots and can't disambiguate between PR-driven noise and a real business. News flash: the guys at Dropbox aren't idiots.<p>The notion that Techcrunch is fueling demand AND reaping rewards on the other side is false. Oh, they may try to prime the pump from time to time, but at most it simply gives visibility to a few startups. In the end, users will drive and dictate the value.<p>Give the Dropbox guys some credit. And, more to the point, <i>don't</i> give credit to some guys with nothing more than write access to a blog.

case in point: <a href="http://techcrunch.com/2013/02/14/with-20-of-reservations-filled-mailbox-goes-down-so-you-can-enjoy-your-valentines-day/" rel="nofollow">http://techcrunch.com/2013/02/14/with-20-of-reservations-fil...</a><p>I'm not sure if I've ever read such fawning about a service going down.

I believe that this blog post is absurd, disrespectful and insults the entire Dropbox and Orchestra/Mailbox teams as well as, those at Aol/Techcrunch and Crunchfund. Dropbox did not buy Mailbox based on a couple of Techcrunch posts, and they obviously will have done their due diligence before purchasing the company.<p>Dropbox bought Mailbox because, it wants to be more than a storage company and they are looking at diversifying their income streams with the rise of rivals encroaching their territory as well as, ensuring that people stay with Dropbox rather than go to other rivals. Acquisitions of Audiogalaxy, Cove, Snapjoy etc highlight that this is Dropbox’s plans going forward.<p>More often than not, Techcrunch states a disclosure of a Crunchfund investment within the posts that they are writing and although, they may have not followed through with this properly with Mailbox – you can clearly see on the Company Bio linking to Crunchbase that Crunchfund are/were an investor too[1].<p>Let’s not forget Mailbox is from Orchestra[2], a company which already had hundreds of thousands of users and is a company which won Apple’s Productivity App of 2011[3].<p>[1] <a href="http://www.crunchbase.com/company/orchestra" rel="nofollow">http://www.crunchbase.com/company/orchestra</a><p>[2] <a href="http://www.orchestra.com" rel="nofollow">http://www.orchestra.com</a><p>[3] <a href="http://blog.orchestra.com/orchestra-is-productivity-app-of-2011-in-the" rel="nofollow">http://blog.orchestra.com/orchestra-is-productivity-app-of-2...</a>

Hi everyone! I'm the writer of all those effusive Mailbox articles which supposedly drove up the valuation of Mailbox and helped it to be acquired for the benefit of the folks at CrunchFund. So maybe we should clear a few things up. The Storify version is here: <a href="http://storify.com/ryanlawler/techcrunch-pump-n-dump" rel="nofollow">http://storify.com/ryanlawler/techcrunch-pump-n-dump</a><p>But let's make a few things clear: I don't have any special relationship with Michael Arrington, MG Siegler, or anyone else who works at CrunchFund. I may see them around socially, in the same way that I see any other investors or entrepreneurs at events where those types of people hang out. But they don't pitch me startups they've invested in, and there's certainly no expectation that I, or anyone else at TechCrunch, be friendly to companies that they've put money into.<p>I joined Techcrunch more than six months after Arrington was booted, and well after the exodus of employees who worked for him started 'pursuing other interests.' I never worked with him, and besides exchanging pleasantries backstage at TC Disrupt, I frankly don't think he knows who I am. He certainly doesn't whisper secrets in my ear, and I couldn't care less about whether or not his little VC fund is successful.<p>I first reached out to Mailbox CEO Gentry Underwood in August of last year, because I heard he was working on a cool solution to email overload. (I think I first heard about Mailbox from one of his tweets.) It wasn't until December that I'd gotten a chance to test it out. I think I had it for about a week before I wrote that first article, and I loved it, and still love it. In fact, I have been using it as my default email client ever since I got it.<p>At the time I worried that the story would be seen as hyperbolic, but I believed in the product and thought more people should know about it. I thought it was an actual useful piece of software that could make people's lives better, so yes, I wrote glowing reviews of it. But at no point did I do so because of any influence from Mike, or CrunchFund, or anyone who had an actual vested interest in seeing Mailbox succeed or profiting from it.<p>The thing that annoys me about pieces like this are that they vastly overstate the influence that CrunchFund or any other VC have in our coverage. Yes, they frequently clue us in to cool applications they're playing with, but there's no real exchanging of favors that happens. I write about products I like, usually pass on those that don't interest me, but if there's the case where I test something out and it doesn't pass muster, I usually say so.<p>One final note: The most recent article I wrote was about Uber, which is also a CrunchFund company. That one was not nearly as positive as the stuff I wrote about Mailbox. <a href="http://techcrunch.com/2013/03/15/see-uber-this-is-what-happens-when-you-cannibalize-yourself/" rel="nofollow">http://techcrunch.com/2013/03/15/see-uber-this-is-what-happe...</a>

Someone with more experience writing browser extensions than I shouldn't have too hard a time using the CrunchBase database to automatically include a "CONFLICT OF INTEREST" warning in TechCrunch posts:<p><a href="http://www.crunchbase.com/company/orchestra" rel="nofollow">http://www.crunchbase.com/company/orchestra</a>

If you're in the "startup" business, where the real product is the business itself, this sort of operation is standard practice. It starts with having a PR company - a truly productive one. Add on some great media contacts made over the years and you're playing an A game.<p>To an extent all business runs like this. It actually is much more difficult to enforce the now, but imagine a world in which only those who can afford advertising have any public voice at all. As an added bonus, those who buy advertising are at least at the front of the line to get positive articles written about them. Those 2% of your customers you inevitably piss off can't drag your name through the mud because they have no truly public forum for their opinion. That's pretty close to how things were before the web.

<a href="http://www.theverge.com/2013/2/7/3961544/mailbox-app-for-iphone-inbox-unchained" rel="nofollow">http://www.theverge.com/2013/2/7/3961544/mailbox-app-for-iph...</a><p><a href="http://www.macworld.com/article/2027388/review-mailbox-for-iphone-belongs-in-your-dock.html" rel="nofollow">http://www.macworld.com/article/2027388/review-mailbox-for-i...</a><p><a href="http://allthingsd.com/20130221/mailbox-takes-swipe-at-traditional-mobile-email-apps/" rel="nofollow">http://allthingsd.com/20130221/mailbox-takes-swipe-at-tradit...</a><p>It's just not techcruch, mailbox app got rave reviews from other sites too. This post is insulting to mailbox team giving an impression somehow they are scamming.

The number of companies that TC hypes that go nowhere far outnumber those few that succeed. Those that do succeed seem like they would have done so even if TC hated them.<p>I strongly doubt they play much of a role in the success of a company.

I'm not sure that this can be reduced solely to a conflict of interest regarding Crunch Fund. Arrington left, and the piece (really more of a rant) never accounts for that or for any of the other possible motivations: it just asserts some sort of dubious manipulation of the system.<p>Frankly, I think the impetus is much more benign: TC wants trafic, and Mailbox is popular at the moment (primarily due to their brilliant if infuriating waiting list gimmick). Blogs write what will make them money.

This blog post was so obviously pointless and toxic that I flagged it, but of course flagging doesn't work on stories like this, because they collect upvotes too fast.

"Pump and Dump" claim might have some semblance of credibility if mailbox was a publicly traded stock that Arrington/siegler talked up on techcrunch, without noting they were investors, and then sold to the unwitting public who purchased said stock on the basis of a techcrunch article. Given that the sale to Dropbox was a private transaction, this is all moot.

That was hard work just to read a paragraph of text. Note to website owners/designers 5-7 words per line doesn't make it easier to read on a smartphone.

Granted, this type of journalism is shady, but this certainly doesn't meet the definition of a "pump and dump" scheme.

I couldn't agree with the OP more.

And only yesterday there was a post about how you couldn't make any money as a writer!

Doesn't a company like Dropbox have the ability to judge for themselves whether or not a startup boosted by TC is actually worthy of buying? It's insane to think that they would drop $100M on a company based on TC promotion alone.

Who's being scammed here? I don't get his point.