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.
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.
Marketing, of course, is not about the product name. It's feature/function, pricing, ship dates, channel development, and general promotion/branding.
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.
I'd like to see this contract. Fusion Garage says there were no agreements.
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.
They are definitely missing the TechCrunch ad agency now to not make such a basic check.
Did you buy an Acer Ferrari laptop because you thought it was really a Ferrari sports car?
What a daft reason for not buying one.
Here's the snopes: http://www.snopes.com/business/misxlate/nova.asp
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.
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.
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.
I made no such claim. What I meant was that TechCrunch's job is pretty much done from Fusion Garage's perspective. They're in the press.
The difference is, the press might be a little more positive that it is now with this big mess.
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.
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.
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?
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.
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.
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...
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?
Then your reply serves no purpose. If you do not have the data how can you make the claim?
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.
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.
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.
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.
Again you offer no proof to the validity of your analogy other than because you said so.
In this case Arrington only had pie-in-the-sky hand waving ideas about a $200 touchscreen computer that could do everything. He clearly wasn't interested in putting actual effort and resources into the project until someone else started working on it. The project would have died if Fusion Garage didn't start working on it.
And in this situation, a "prod dev guy" actually did build it. And I am willing to bet you that he can sell at least one.
And I am willing to bet you that he can sell at least one
I can bet you if Arrington put up a preorder page of a product called SUPER-CRAP, he could sell more than one. Again, so what?
The end goal is not to sell one. It's to build a successful business. And that requires significant(even if unequal) contribution from both prod dev and marketing.
People like to exaggerate that a good marketer can poop in a box and sell it, but at some point it becomes scamming. And I guarantee you that the likelihood of getting sued and losing even more money goes up astronomically.
Well, no doubt many people are happy to assume that the person holding the soldering iron is automatically the one who is right.
I will make no such assumption; "infinitely" is more than a little strong. ;) All I will say is: What a lose-lose situation.
Well... If it were a chainsaw, then there would be no question whatsoever.
As it is, it's the team who has the soldering iron, who wrote the code, who designed and built the prototype, who figured out production against the other guy who is known for having occasionally hidden ties to companies he talks about on his blog, who has thus doubtful journalistic standards and who posted a couple pictures, promoted the device and published stories about how it would change the world, painting himself as an internet visionary turned hardware mogul.
I stay with the guy with the soldering iron on this one.
Interestingly, I also can't see US$ 299 as such a ludicrous price. I doubt an e-paper display is much less expensive than a LCD twice its size and there are devices in this space that cost $299.
That doesn't get them out of the woods legally, but if all TC has is incriminating snippets of email, it does make them more credible than TC.
I can't believe how many are making that assumption. I had been reading TechCrunch for years before the day I saw Arrington post the original hypothesis for the CrunchPad. In fact, I can probably look up my comments on Google encouraging his going forward, and suggesting features. I'm blown away at how off track this has turned out. Unfortunately, if he didn't handle the legal stuff he has to take the turmoil I guess.
Me too, considering it's basically an attack on Mike Arrington based on an imaginary situation where Arrington/Techcrunch do things the author dislikes so he can paint him in a bad light.
It's no more worthy of upvotes than: "I imagine Mike Arrington met the CEO of Fusion Garage and kicked his children in the face. Isn't he a horrible person?"
The last time this lawsuit came up on HN, people were saying how Arrington was arrogant and they said that parts of the story probably weren't being mentioned.
This guy is a complete scammer and has a track record of doing exactly this. Watching HN people take his side after watching his video spin and not knowing anything else about him is just sick.
If you go to this article in the comments you can see one related to the folding of that company: http://blogs.todayonline.com/techtalk/2009/01/fusion-garage-...
The Radixs site is now a parked domain. I did not have time to do more searching for information about the company.
That being said, Fusion Garage really fell on their face. The only thing they needed to do is come up with a name better than crunch pad, which should not have been too hard. And they come up with joojoo??? Ouch.
It seems to me the FusionGarage people have gotten what they need from Arrington; attention. Now that he is no longer useful he's been sidelined. Kind of a Machiavellian move, since no lawsuit can undo the press they got.
Arrington was using them and they were using Arrington. Which, in the end, is the nature of all business relationships.
ChromeOS just went public, Apple may or may not do some tablet thing, Arrington is somehow involved and seems to be acting like an ass again, etc.
I think someone pushed the panic button and said something along the lines of 'we go live now or the whole thing is dead!'
All-in-all not a good way to start. My magic eight-ball tells me this project is doomed.
I do think the TechCrunch PR and marketing probably could have made it better, but perhaps there is a bit much credit and attention given to the louder mouths then is deserved.
In any case, interesting to watch, and a device like this for that price point would be awesome if anyone can pull it off.
The sooner you wake up to what marketing really is the better
Fusion Garage's story is infinitely more believable than Arrington's. After both sides have spoken, I imagine it went down like this:
They show him their OS in hopes of getting press and subsequent funding. Arrington loves the idea and wants in on the concept. Fusion Garage goes and actually builds the thing. Meetings take place with Fusion Garage probably passively hoping for funding through Arrington's connections and Arrington monopolizing the conversation with "product ideas" that are more pie-in-the-sky thinking than actual engineering.
In the meantime, tablet fever grips the nation and a Fusion Garage with a working prototype has no trouble scoring VC meetings. They probably had to fight off the cash being thrown at them. Suddenly they don't need Arrington and those that actually came through with funding demand they end the charade of him being a participant. All they have to do is come up with a new name (Joojoo? Come on...)
What remains to be seen is how TC's audience will react. 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. I wonder if this tale will actually hurt his rep?
Who here will approach TC and Arrington differently after today?