New Comm Biz

Arrington, I’m really sorry, this seriously sucks.

Mike Arrington can’t get a break. His Last startup, before TechCrunch became his full-time gig, Edgio, DeadPooled 2 years ago and now the CrunchPad joins it’s much older sibling in that same grave almost exactly 2 years later.

This is disconcerting to me for a few reasons:

• I know how hard it is to lose a startup. It sucks more than anything I’ve gone through.
• I really believed Arrington was on to something and was excited to see a content company join the hardware fray.

But what really, really concerns me is what this could be an indicator of.

Open Collaboration

Arrington’s approach with the CrunchPad mirrors very closely the model laid out in the book Collaborative Entrepreneurship. From Amazon:

Collaborative Entrepreneurship: How Communities of Networked Firms Use Continuous Innovation to Create Economic Wealth: Today, the ability of firms to innovate is restricted by barriers both inside the firm and within their existing markets—barriers that produce limited knowledge utilization and incremental innovations. “Collaborative Entrepreneurship” describes how these barriers can be overcome so that shared knowledge can drive continuous, sustained innovation across a network of firms and markets.

The book is very theoretical but prophetic at the same time. I know that the scenarios they lay out in the book won’t come to fruition exactly the way they predict but I do believe they’ll come about in some form.

I loved the blog, hardware crossover Arrington was taking. Hardware is tough. Really, really tough. I always stayed away from business plans that required hardware. Too many hard costs, too many headaches. Arrington’s trials are proof of that.

Cross company collaboration is probably even harder. Even the poster child for open collaboration, Wikipedia seems to be cracking under the pressure:

• Volunteers Log Off as Wikipedia Ages – WSJ.com – /Message
  
• Wikipedia: We’re not dying but we need YOU

Free vs IP

What about Cris Anderson and the promise we were given in his book, Free: The Future of a Radical Price? The real irony is that even Chris struggles to reinvent Wired and their business.

I’m also a big fan of Cory Doctorow and his new book Makers which may be more accurate than any non-fiction business book:

• The decline and fall of America and the boundless optimism of open source/hacker culture
• Brilliant geeks in a garage, are trash-hackers who find inspiration in the growing pile of technical junk
• Cheap and easy 3D printing, a cure for obesity and crowd-sourced theme parks

Both Chris and Cory support open/mixed/free (whatever you want to call it) business models. The CrunchPad is the counterpoint to their argument. Greed is the reason we have lawyers and IP laws. It’s a sad reality we have been trying to fight since Gen X started taking corporate jobs.

Content Ownership and Advertising

2010 could be the year that Murdoch pulls his content from Google and hundreds of publishers could follow suit if he’s at all successful. I firmly believe that a publisher should be allowed to do whatever they want with their content but it does move counter to this free and open trend we’ve been living off of.

Hulu’s been great but they are slowly adding more and more ads to their programming, negating half the reason so many of us have flocked to it.

Apple (which made the opposite move Arrington was shooting for, from hardware to content) has recently filed patents for unskippable ads on their devices: Apple Files Patent for Un-skip-able Ads on iPhones, iPods

Even Google, the original purveyors of this free and open movement have been slowly adding more adds to their content to the point that some worry about the lines they may be crossing. Google Experiments With Paid Inclusion & Does “Promoted” Meet FTC Guidelines?

Where’s the Money?

Finally what really worries me is the lack of sustainable revenue from the big social media companies we rely on. Twitter is finally taking the easy fix with advertising and away from their promised premium and value add revenue models.

LinkedIn, Digg, Technorati and Facebook have gotten so huge and taken in so much VC money that the only reasonable exit strategy is an IPO. But none of them have the revenue to support that strategy yet. As this recession plods on and some begin to talk about a possible second dip, despite this “jobless recovery,” You have to wonder what will the big social networks do? How desperate to monetize will they be? Will they be able to deliver on the promise we all bought off on?

Or have the last 5 years been a departure from reality and the fact of the matter is that advertising is the only option and you should never openly collaborate and any collaboration joint venture should only be done with legions of lawyers at your side?

I believe in the open nature of the Internet. I have always believed that open is better than closed. I truly believe that open collaboration is the greatest approach to creating value and economic wealth. But for the first time I have doubts that it’s an unstoppable force.

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