Michael Arrington of TechCrunch takes on, defeats Seattle at TechFlash event

TechFlash, a Seattle blog which covers tech startups, held an event which featured Mike Arrington

This lively panel discussion featured Bill Bryant from Draper Fisher, Hillel Cooperman from Jackson Fish Market, Serena Glover of Twango, Andy Sack of Founder’s Co-Op and the founding director of TechStars Seattle, and Michael Arrington of TechCrunch. The event was hosted and moderated by John Cook and Todd Bishop of TechFlash.

Michael arrived dressed in a yellow nautical wind-breaker, like you would wear on a sailboat on a rainy, windy day. Which is a pretty funny inside joke, since it has rained pretty much every day since I arrived here in January, except for maybe two or three days.

Arrington took some jibes right out of the gate for implying in some of his past posts, that Seattle’s entrepreneurs are basically lazy. He has said (somewhat in jest) that compared to California entrepreneurs – that the locals don’t work hard enough, take time off to ski in the afternoon, allow themselves to have “lives”, and (as if that didn’t cover it) don’t have a big enough “world view” or vision – compared to his fellow legendary Silicon Valley entrepreneurs, just 790 miles to the south. Basically, that he hates Seattle and all that it stands for.

It turns out, this sort of stuff really gets under Seattle’s skin. As any tech veteran knows, Mr. Arrington relishes pushing these sorts of “hot buttons”. And, this sort of stuff, along with a lot of hard work and diligence, has built him the largest technology blog in the world.

TechCrunch has become so successful, both in terms of traffic and finances, that Michael regularly taunts aspiring bloggers to “dare” to try and get links from him; and Techcrunch has a “no-link” policy.

TechCrunch is the typical cold, hard success story which is so worshiped in the trade press, but also represents the inhuman, quintessential Silicon Valley attitude.

Does the Seattle tech community have a self-esteem issue?

I was a bit taken aback by the collective outpouring of agreement that ensued. It turns out, that Michael Arrington seems to have some pretty good insights into the collective entrepreneurial psyche in Seattle.

Despite the fact that Seattle serves as the headquarter location, and home base for an impressive array of gigantic companies.

For example: Microsoft, Amazon, Boeing, Starbucks (and Tully’s), Nordstrom, REI, Eddie Bauer, Dendreon, Cray, Isilon, Drugstore.com, Classmates.com, Expedia, Real Networks, and Blue Nile. They were once mere startups.

Seattle has a robust, vibrant entrepreneurial ecosystem to boot – Redfin, Zillow, Jobster, Intelius, iLike, Wetpaint, Payscale, 43Things, BuddyTV, The Omni Group, and scores or even hundreds of other fascinating startup companies call Seattle home.

But the idea seems to have taken hold here that first, Seattle startups will sell out too early, before realizing their true potential. And second, that nothing really big and “new” is going to take hold locally in Seattle.

In other words, that Microsoft, Amazon, Starbucks, Boeing, or REI can’t happen again. Which are both, clearly unlikely thoughts even to the new person in town.

Back to the TechFlash Panel

Like Michael, I am also a recent transplant from Silicon Valley to Seattle, so it was interesting to see the famed blogger not just taking, but (mostly) giving the heat.

Or, is it Google envy?

It seemed that Michael had the crowd in his hand in his first appearance at this “town-hall” style event; but sort of in a mutually dysfunctional way. He opened with a reasonable observation that Angel investors are becoming the new venture capitalists.

OK, that’s plausible – Angel investment equals VC in the US, in dollar terms. Both invest about $26B annually, into startup ventures. The difference being, it’s not coming from funds which draw a management fee; and it’s spread around among 57,000 startup companies annually; vs the venture capital industry which spreads their $26B to only 3,000 startup companies.

As a patently absurd example of Angel investment, Arrington cited the Russian investment firm Digital Sky Technologies (of dubious origins – money laundering investigation, anyone?).

Michael – since you raised the point – let’s get to a basic question here. Since when has a corporation based in Moscow, made that kind of money, legitimately?

For example… Digital Sky pumped $200M into into Facebook in return for a 2% stake (valuation calculation, anyone?), with stunningly loose terms. This is what is normally referred to in the US, as a “Mezzanine financing” round; or a pre-IPO loan – that is, a gargantuan but low-risk bet.

The most startling thing about the Facebook Mezzanine round is that no one in the US mainstream press – the NYTimes.com, etc – has looked into where that money actually came from. Perhaps, reasonably, because they fear for their life. Interesting example of an “Angel” investment – NOT.

An Angel investment? But nobody called him on it. Digital Sky is a special case of an international, probably Government-backed (hello, Vladamir – nice to see you’re reading the blogs) private equity firm; far away in the financial realm from any Angel investor that every walked the planet.

There WERE other panelists

Andy Sack, who was the founding Managing Director of the new Seattle TechStars program also had some thoughtful remarks.

Andy played a key role in putting together Seattle’s new TechStars program, which looks poised to inject new vitality into the Seattle startup ecosystem.

Andy measures his words, but gave a rousing speech near the end of the event, imploring Seattle entrepreneurs to “GFA” (get f__ aggressive), put their nose to the grindstone and take on Silicon Valley.

The high points

Michael Arrington did a great job of taking the bait and running with it. After basically, demolishing his co-panelists, he then turned his sights on the audience. After they wilted, he announced he had to leave early. I think he mumbled something about his Dad.

Bravo! Michael, it was a great show.

Besides Arrington and Sack there were three other interesting panelists, which will be covered on other tech blogs.

My apologies that StartupTrek didn’t have time to document and shed light on everything said at this fun event. We will put names on the photos which are part of this blog post. Also, you can Google “name + TechFlash Live” and you’ll find their remarks.

The food served during the social hour before before this panel was outstanding! I have never seen a buffet like that in Silicon Valley. Take notes, you hard workers to the South:)

Thanks to John Cook and Todd Bishop of TechFlash for putting together a good event.

What do you think?

Is the Seattle area really full of a bunch of lazy, unmotivated slackers, that have no chance of competing with the legendary Silicon Valley work ethos? Is that really the issue – the work ethic? Being able to sit at a computer more hours per day, more focused, with nothing else going on? If so, does than define the so-called, “success”?

Or… is it the incredible, other-worldly concentration of investment capital and intelligence (as defined by our mainstream media, and by the way — not found anywhere else, of course) located on Sand Hill Road, in Menlo Park, California?

Is it Stanford University? Or perhaps, does Seattle actually have an equal (or even better?) educational system?

A few people at the event mentioned not wanting to “work for the man”. That being (locally), the MICROSOFT man – their former boss; leading them to form “lifestyle companies”. Is that the issue, if there is one? Doubtful, but weigh in if you think that’s worthy of debate.

Can Seattle, with about 40% of the population of Silicon Valley (but very likely, a higher % working in tech) take on “the Silicon Valley legend”?

And Michael Arrington – thanks. Please come back to every Seattle event. You are the real deal… right??

Let’s go, Seattle!

Steve Bell is a serial tech entrepreneur, a Series 7/63, Angel investor, and an LP in two venture capital funds. He runs a video blog on start-up venture formation at StartupTrek.net

Photo captions pending.

the entrepreneurship channel