2007 8
Techcrunch and the morals of selling a company
Published by MartinVarsavsky.net in General with No Comments
I was reading an article on Techcrunch in which Michael Arrington criticizes Jay Adelson and Kevin Rose for having conversations with different parties for two years about selling Digg. Personally I think that Techcrunch is off on this one. There´s nothing wrong when you have come up with an amazing company, and Digg is one of those, to frequently talk to people about the possibility of selling it. Even Larry and Sergey were doing this in the early years of Google. What I dislike about the article on Techcrunch is a moralistic undertone, as if talking to potential investors or buyers is a bad thing for a start up. Personally I think it is essential. When I built Ya.com for example we started talking to potential investors and buyers from day one until we sold it to Deustche Telekom for 550 million euros. And sometimes these talks are just that, talks. My first company, Urban Capital, which I started in 1985, I never sold. But that does not mean that we did not talk to people over the years. Talking to potential buyers about your company is the only way to know how much is worth. There´s nothing wrong with that as we all need to make informed decisions. I find it hard to believe that Techcrunch blames Jay and Kevin for doing what all of us entrepreneurs, normally do.
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John Stokes on November 8, 2007 ·
Martyn, I think the point being made in the article is not a moral one but a commercial one. As I read it, the Techcrunch article is highlighting the belief that a structured sales approach makes for a more efficient and ultimately more financially rewarding process for someone that genuinely wants to sell. (as opposed to someone else expressing an interest to buy your company and you talking with them).
This comes down to one’s perception of whether DIGG is proactively initiating a sale or reactively discussing an offer – I don’t know but perhaps your sensitivity comes from some inside knowledge ?
Javier Cabrera on November 9, 2007 ·
Hi Martin,
Love your blog since it changed it’s design! now is much more easier to read! one thing I would like tough, is reading about the process of selling a company. The Techcrunch post talked about “investment bankers” to put together a pitch; is this something you do to sell a company?
I mean, I would love to read more here about the process (in your experience) start-ups need to do to go from start-ups, to big million dollar companies.
You sold a good bunch of business in the past (amazing!!!!) and you must know the right and wrong decisions on having someone (group or one person) to invest in your business; how do you move once you have your business working? you give them a call, you email them, you wait for them at the exit of a restaurant, etc?
That’s what can help so many start-ups out there… to know past experiences of persons that went there, and did that.
It will be interesting! glad to read your posts every day!
Javier
keanu on November 9, 2007 ·
IMHO, Michael Arrington didn’t intend to criticize digg founder’s behavior. from lots of posts Michael wrote about digg, Michael likes Kevin Rose very much. perhaps Michael wants to suggest Kevin should think bigger and longer just like facebook’s Mark Zuckerberg who can turn down many times temptation. from this point, I appreciate Michael very much. Michael really hopes Kevin can be a very great entrepreneur.
Martin Varsavsky on November 9, 2007 ·
John,
Maybe it´s being an entrepreneur in Europe that makes me look at certain type of articles as coming from a moralistic angle. Many European journalists have criticized me in the past for selling many of my start ups and the more $ i got for them the worse of a person I was. Maybe I misread Michael Arrington´s criticism and he would actually be pleased if Jay and Kevin sold Digg for a good price.
Martin Varsavsky on November 9, 2007 ·
Keanu,
As I said it may be that as read from Europe I misunderstood his post as a post against an entrepreneur shopping a co around.
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Sam Sethi on November 8, 2007 ·
Wait till Arrington starts to tout the sale of Techcrunch then it will be ok.