The idea that Arrington apparently tried to glom onto the project with no engineering contributions perfectly fits the tropes discussed on HN: MBA-types make a buck off the back of those who actually built the thing.
The fact that you already have so many upvotes just perfectly illustrates how so many people still don't get that sales and marketing are just as important to product success as engineering. Maybe more. Characterizing Arrington's involvement as an attempt to "glom onto the project with no engineering contributions" is both unwarranted idle speculation and irrelevant, as there are many other contributions to be made beyond just engineering.
EDIT (for some reason reply doesn't seem to work): TC is a hugely popular site, of course, but my point is that sales and marketing is a lot more than what any website can do. They can have huge impact on a website's traffic (though the long term effect is arguable) but getting readers to follow a link isn't the same as getting them to pay a few hundred $ for a product.
Since when is TechCrunch just a blog? They have multiple blogs that get millions of readers. They have conferences and meetups throughout the world that are covered by major media outlets. They run the most successful startup contest around, where companies like Mint, Dropbox, and Yammer publicly launched.
It sounds like Fusion Garage and TechCrunch did a terrible job at setting clear expectations about the partnership from the beginning, but to call TechCrunch just another blog is not accurate.
The "53,651 readers in the Silicon Valley echo chamber" argument in 2006 had more force than "only 3,739,000 readers in 2009." TechCrunch now clearly has a larger reader base than early adopter in Silicon Valley.
Good point. But TechCrunch has become 1 or 2 orders of magnitude bigger since this post. Also, I think a large segment of the target market for this product is this exact market that is very familiar with TechCrunch.
It does look like they did more than just lend the project the blog; for instance, TC sent people physically to Asia to do some unspecified thing. But that fits with a narrative of the original agreement being fuzzy, and TC getting more serious towards the end when they saw the project was actually going to come to fruition.
People tend to forget, and especially so here, that there is another world outside of interwebs - with different approaches to marketing/sales, and those work on a few levels above web in terms of volume pushed.
You're right, but in a case where one side is contributing mostly intangible business value, you expect written contracts. The alleged lack of them is damning.
Marketing, of course, is not about the product name. It's feature/function, pricing, ship dates, channel development, and general promotion/branding.
But marketing does not give you an automatic right to the product. (Note I am only mentioning marketing, because Arrington did not sell any of the products, obviously). You may tell how great your iphone is to all your friends, but that will not give you a right to any share of the iphone's profits.
If Arrington signed a contract with fusion garage to do their marketing, than he is entitled to what the contract gives him. But to say that he has an ownership interest in the product just because he did some marketing for it is imo just not true. While he may have ownership interest in marketing materials he may have created (such as the crunchpad name) I don't see how he can get ownership of the actual device.
BTW -- this is just wild speculation based on incomplete facts, none of it is legal advice.
As an employee at an ad agency, I completely agree. (I mean JooJoo? Really?)
Perhaps I wrote that sentence a bit odd, but I don't mean to imply myself that this is what happened. The 'idea' central in this story simply fits similar tropes and themes I see on HN all the time. And you're right, the up-votes verify this.
JooJoo is pronounced "joujou" in French, which is the diminutive form of "jouet", a toy. This form is only used when referring to the toys of little kids up to 7 year old. $500 for a little kid toy? Not for me, sorry.
They are definitely missing the TechCrunch ad agency now to not make such a basic check.
The name sounds _exactly_ like 'little kid's toy' in French, so, indeed, it follows that it will carry those connotations to French speaking people (you're not one, I'm guessing). Shakespeare may have found a rose by another name smelling just as sweet, but in the centuries since his time we've learned that varieties called 'poo-poo' just don't sell at the garden center.
That's an urban legend, kind of like saying a dinette set called "Notable" would flop in English speaking countries because we would assume it has "no table".
That same french term became synonymous with supernatural fetishism in the US (via west african slaves) and was turned into "juju", which is almost always preceded by the word "bad" as another way of saying bad luck or a feeling of impending doom....
Same way with softimage back in the day. It is pronounced softimazh, but it took bazillion of dead trees and marketing to explain to users how it is pronounced. You're doing something wrong if you need to use dictionary explanation in your marketing material imo.
Which is just lazy, terrible marketing. If you don't own the most obvious domain, do not use it as the name of your product.
If I go to joojoo.com and don't find what I'm looking for, there's not a chance in hell I'm going to start iterating through other possibilities. I'm either going to hit up Google or give up.
You're missing the fact that most people use Google as their 'location bar' and not the actual location bar. People literally do a Google search on Yahoo.com to get to Yahoo's site.
That was a great recovery for dropbox - but note that at the end of the day they still needed dropbox.com. This isn't to say that you can't succeed despite a crappy domain name, but rather that when you haven't even locked down your brand yet, why commit to something that you can't secure the domain for?
I don't think anybody believes that sales and marketing are as important as engineering. I think instead that most people here believe that all the sales and marketing people treat engineering as if it doesn't matter at all. And we'll cheer for anyone who says it's not the case.
That may be true but Fusion Garage has decided to go without Arrington's marketing. That may be a bad idea; I'm already not impressed with the name. But the point is that there's no evidence that Arrington has any claim to the product.
IANAL, but I highly doubt this is automatically the case. The lack of written contracts is troubling, but I suspect that a competent legal team could demonstrate significant enough contribution to warrant joint ownership, assuming such contributions exist.
IANAL either. Arrington says they contributed IP to the project -- that's pretty significant. I'm curious to find out exactly what it is they contributed. They do have the staff for it.
As for marketing, so far it's consisted of a few blog posts. They do blog posts for other products too. I don't see much in the way of any ownership coming from that.
The last time I heard this much pissing and moaning about a product's name, it was aimed at another Asian tech company who came up with the ridiculous name "Wii."
TechCrunch is a technology blog, they give lots of products visibility. You're not going to claim they own everything they report on? They own the name Crunchpad, but this product isn't the Crunchpad.
If they had a business relationship, they should have had a contract. One that locks this product into using the Crunchpad name. But they (apparently) did not.
If they never had any prior involvement with TechCrunch, they'd still be in the press. On Engadget just as they are now. Hell, they'd probably be on TechCrunch too.
The difference is, the press might be a little more positive that it is now with this big mess.
Thank you for your $0.02; this might be really obvious to you, but could you be kind and enlighten the oblivious engineering crowd on this forum and be more specific as to what kind of value-add does sales and marketing add to a early-stage hardware startup or any consumer-oriented tech startup in general?
I disagree with your assumption that this is an engineering crowd. I would say entrepreneurship is at least as important to the HN culture as engineering.
You ask a huge question, which is discussed every day all around the internet.
But to take a high level stab at it:
Marketing is crucial to an early-stage hardware startup to start to determine if anyone actually wants to buy what you're proposing to build. Good luck getting money from a VC, much less a customer, if you can't talk intelligently about your target market, and demonstrate an ability to connect with it.
Sales becomes paramount after Version 1.0 is released, when you have to demonstrate that your business is actually profitable. Many engineers are under the impression that, if the quality is high enough, the product will sell itself. While this is true for the (tiny) subset of your market that cares enough to really investigate your product, it seems that a great sales team with a mediocre product will outsell a mediocre sales team with a great product more often than not.
There's a lot of nuance to getting partnerships and getting distribution on your product. It's a different mindset that needs to be learned. In most cases, early-stage web startups should have at least one person who is capable of getting in the door (at minimum, an engineering person who can also do biz dev). It is rarely the case that you just make something and let the orders stream in. People don't know about the product yet and there's a lot of work involved in convincing them that you are capable of actually producing the device at scale or even at all. Just off the top of my head, if you see things like Twitter using bit.ly instead of tinyurl like what happened earlier this year, that wasn't a technical decision, that was done through business development and leverage.
It really depends on what it is you are producing, but in this particular case of the JooJoo/Crunchpad/whatever marketing and sales is probably part of the fundamental strategy. If a lot of time and money has been invested in something, it would be a major oversight to not have somebody who can specialize in distribution/marketing.
If you have no product, having the best marketers in the world will not make you a single penny (unless you do preorders, which you still need a product eventually).
If you have a product and no marketers, will you still be able to sell some units? Most certainly.
Because of this, the actual engineering of the product is more valuable than the marketing if you were forced to choose between all engineers, or all marketers.
If you have no product, you wont make a single penny, Sure. But, if you have no marketers, you will not be able to sell enough units to make up for the fixed costs involved, and you would end up with a loss, which is even worse.
I am absolutely speechless that I am being downvoted while you are being upvoted...
What exactly are these imaginary fixed costs that marketers don't have? You mean hiring advertisers is free? You mean buying commercials is free? You mean flying out to conventions is free?
I can tell you of quite a few startups led by MBA marketers who burnt all their cash trying to outsource their technical work. All the money went into hype which they don't even have a product for. Would you rather have imaginary hype or would you rather have a physical product?
I believe he is referring to an economies of scale type scenario. With a high-tech product (or most any for that matter) the manufacturer/developer has to pay huge sums of money before a single commercial unit is shipped. Fixed costs such as plant and manufacturing equipment are cash drains whether one or one million units are sold--hence the name fixed cost.
Yea, Fusion Garage has created a tangible product. To get it to the masses, however; they must convince the public they want it. Of course theres people who are already excited about it, but that certainly won't bring in enough revenues to keep the lights on at the end of the day.
I'm personally just getting tired of the same tired Business vs Tech banter. If we are to advance our industry and continue to create great innovative products, we must recognize eachother's strengths and weaknesses. Thats when the magic happens IMO.
With a high-tech product (or most any for that matter) the manufacturer/developer has to pay huge sums of money before a single commercial unit is shipped.
This really only holds true for a cutting edge product like a new CPU or the first iPod.
For everyone else like the JooJoo/Crunchpad, these electronics are assembled from commodity parts and manufactured in Asian factories on the cheap.
If preorders are taken, there is absolutely no reason for Fusion Garage to maintain a huge stockpile and the corresponding risk. This is why made to order companies like Dell are so successful.
Have any of you bothered to see how much it costs now to produce a prototype in China now? And do you really think that Fusion Garage is funding these factories themselves?
Wake up to the 21st century please.
Non-cutting edge electronics are cheaply produced in Asia. The "JooJoo" is made up of commodity electronics which means that these "low-tech" plants are easily able to solder and assemble the components together.
Fusion Garage is not building the factories, mining and smelting the ore, nor fabricating their own silicon...
Could you elaborate on how much it actually does cost to produce a prototype in China? Further, how about a finished and consumer-ready product? I understand that what you are alluding to is a cornerstone of the modern economy, but I find it difficult to believe that the affects of manufacturing costs are essentially null on a small firm from Singapore.
Like I mentioned above, it depends on how cutting edge your product is. I can't give you any specifics but you can try contacting a Chinese supplier through Alibaba.com they will be able to give you a rough idea. I know from the downvotes I've received that I won't be wasting more time trying to convince people about their misconceptions.
As a rule of thumb, the more exotic and cutting edge your product is, the more savings you will get from mass production obviously. The JooJoo/Crunchpad is not unusual. From what I've read, it's a commodity touchscreen attached to an Intel Atom motherboard.
If your product is unsellable due to a small difference in the quantity you are able to sell, you have bigger things to worry about: namely the quality of your product. There's a reason why the cost of new products such as consoles or cpus are sky high in the beginning. Why should your company be any different?
I don't have the exact data for an item like the crunchpad/joojoo, but for nearly everything I bothered checking, the price differences are quite often less than 25%.
Regardless of exactly how much this margin is, it is not wise for anyone to be straddling the fine line between the maximum consumers are willing to pay and the minimum a factory is willing to charge.
I leave it as an exercise to the doubters here to investigate by themselves. I am done wasting my time finding specifics just to further an argument on the internet.
I am absolutely speechless that I am being downvoted
Let me propose an analogy of what you're saying: some say a roof is important on a house, but without the basement, a house would collapse. Without the roof, on the other hand, the house would be fine for quite some time, especially in a warm summer climate, like LA.
In reality, a roof and a basement on a house are like marketing and engineering: both are necessary and neither is sufficient for a good product. Engineering without marketing is blind, and marketing without engineering is lame.
You made a nice analogy there, but other than you saying so, why is it exactly like selling a product? I can make up an analogy too.
Let me make this clear. I am not saying that marketing is completely useless. What I am saying is that when you go up to a marketing guy, chances are that he has no idea how to make the actual product. When you ask an engineering guy how to sell the product, he at least has an idea of how to sell it.
What I am saying is that when you go up to a marketing guy, chances are that he has no idea how to make the actual product. When you ask an engineering guy how to sell the product, he at least has an idea of how to sell it.
Marketing != Sales. Deciding what to make (market research) is the first part of marketing. If you make the wrong thing (if you are blind to the market), you're not going to sell a lot of it.
The analogy to the house holds because both a roof and a basement are necessary for a good house. Similarly, both good marketing and good engineering are necessary for a good product. Both are necessary, neither is sufficient on their own.
The analogy to the house holds because both a roof and a basement are necessary for a good house. Similarly, both good marketing and good engineering are necessary for a good product.
Again you offer no proof to the validity of your analogy other than because you said so.
Just because you are a marketer doesn't mean you can't build some crap and sell it. Just because you're a prod dev guy doesn't mean you can build it and sell it.
Actually it does mean you can't build some crap and sell it when your product is high tech.
In this case Arrington only had pie-in-the-sky hand waving ideas about a $200 touchscreen computer that could do everything. He clearly wasn't interested in putting actual effort and resources into the project until someone else started working on it. The project would have died if Fusion Garage didn't start working on it.
And in this situation, a "prod dev guy" actually did build it. And I am willing to bet you that he can sell at least one.
And I am willing to bet you that he can sell at least one
Okay, even if he can sell one, so what? That "one" is pretty arbitrary.
I can bet you if Arrington put up a preorder page of a product called SUPER-CRAP, he could sell more than one. Again, so what?
The end goal is not to sell one. It's to build a successful business. And that requires significant(even if unequal) contribution from both prod dev and marketing.
I can bet you if Arrington put up a preorder page of a product called SUPER-CRAP, he could sell more than one. Again, so what?
People like to exaggerate that a good marketer can poop in a box and sell it, but at some point it becomes scamming. And I guarantee you that the likelihood of getting sued and losing even more money goes up astronomically.
The fact that you already have so many upvotes just perfectly illustrates how so many people still don't get that sales and marketing are just as important to product success as engineering. Maybe more. Characterizing Arrington's involvement as an attempt to "glom onto the project with no engineering contributions" is both unwarranted idle speculation and irrelevant, as there are many other contributions to be made beyond just engineering.