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One day in January 2009, the technology blogger Michael Arrington was leaving a business conference in Munich when a stranger walked up and spat in his face. In a later blog post he professed shock and outrage, and described the spitter as “some unhappy European entrepreneur we didn’t write about,” but the incident couldn’t have been all that surprising to Arrington. It’s hard to think of anyone in the technology world who has been insulted more often in public settings.
The founder and most prominent voice on TechCrunch, a website chronicling Silicon Valley, Arrington created an affiliated, lucrative conference business before selling both to AOL in September 2010 for roughly $25 million. A year later he set off a firestorm over potential conflicts of interest when he announced that he was starting the CrunchFund, a $20 million-plus micro-venture capital fund specializing in seed and early-stage investments in Internet companies, with $8 million of AOL’s money. Even before the CrunchFund outcry, Arrington was a frequent target of abuse. On stage at a May 2010 conference, former Yahoo! Chief Executive Officer Carol Bartz told him to “f— off.” Technology critic Leo Laporte once said to him, during a live webcast, “Screw you, Mike, you are such a troll.” Rival blogger Kara Swisher of the Wall Street Journal’s AllThingsD said that “being lectured on journalism ethics by Michael Arrington is like getting parenting tips from Britney Spears.”
His wars are even more colorful online, where he wields his keyboard like a bludgeon, rewarding and punishing friends and enemies, inspiring fear and also respect for speaking his mind and deflating hype. In a recent Internet video, Taiwanese animators depicted Arrington feuding with his former corporate overseers at AOL, with Arianna Huffington, president of the AOL Huffington Post Media Group, shown pummeling Arrington’s face. TechCrunch was both the wellspring of Arrington’s growing wealth and influence and the source of his jaw-grinding lifestyle, his moody disposition, his erratic sleep schedule, his weight gain, death threats, and, apparently, saliva-fueled rage from strangers on the street.
Arrington’s path from writer to investor is not entirely new; several former journalists, including Michael Moritz and Stewart Alsop, have reinvented themselves as successful venture capitalists. Still, what Arrington is trying to pull off seems like more of a challenge, for reasons of both personality and timing. While blogging rewards speed, critical insight, self-promotion, and head-knocking (all Arrington strong points), funding startups requires a different set of skills. The ability to massage the frayed egos of company founders and patiently advise them as they try to build their companies into the next Facebook—the business version of nurturing—can be critical to success. In the coming months many young entrepreneurs will get to decide whether they think Arrington’s bag of hammers is likely to work as well at building long-term value for their fledgling companies as it was at securing page views on behalf of his own. (Arrington declined to be interviewed for this article.)
“Mike is a force of nature,” says Keith Teare, who co-founded a company called Edgeio with Arrington in 2005. “If you are not able to have an adult relationship that includes dissent and anger as well as joy and excitement—and deal with each as it happens—then you’re going to find it hard to deal with any strong personality, Mike included.”
The bubble that has consumed venture investing, with far too much money chasing too few startups, is another matter. “Right now there’s an incredible amount of capital,” Douglas Leone, a partner with the venture capital firm Sequoia Capital, told Arrington recently on a conference stage. “Why you want to join the capital side is beyond me.”
“The fantasy as an entrepreneur is to be the next Google,” says Chris Dixon, co-founder of Hunch and head of the Founder Collective, a $40 million VC fund. “The next best thing is to be the person who believed in the next Google.” He doesn’t need to add that being the first to blog about the next Google, while compelling, lacks the same cachet—and doesn’t pay nearly as well. “The reality is that, in terms of where the economics lie, it’s a lot more lucrative to invest in companies and build them than to write about them,” says Ron Palmeri, the founder of Prism Skylabs, one of the first startups to receive CrunchFund backing. “There’s a hierarchical structure in the Valley.”
