Imitation Is Flattery? Or Just Bad for Entrepreneurs?

There are a dozen other, perhaps more important and insightful, posts I’d rather be writing today. But, alas, my friends at TechCrunch put a wall in my path today and I just can’t ignore it, despite counsel from perhaps wiser advisers to do just that.

You see, TechCrunch and Jason Calacanis announced their plans for what is now being called TechCrunch50. Reading the TC50 site was a deja vu experience. The concept, the “rules,” the agenda . . . all out of the DEMO playbook.

You might remember that TechCrunch announced its first startup launch event, what was then called TC20, while sitting in the second row at DEMO 07. At the time I believed, as I still do now, that entrepreneurs need a variety of venues and opportunities to address the market. If TC20, which becameTC40 presumably when the blog’s desire to attract more entrepreneurs outstripped its promise of super-exclusivity, can provide a platform and give wings to entrepreneurs, then good on ‘em. That can only benefit the tech ecosystem.

But, as I told VentureBeat’s Chris Morrison this afternoon, I’m baffled by TechCrunch’s decision to put its event literally on top of DEMOfall 08. DEMOfall is Sept 7 – 9, TC50 (the number has grown from the original TC20 concept) is Sept 8 – 10.

I’m not naive. I’m not at all surprised by the competition. A year or so ago, TechCrunch set its sites on DEMO and has been lobbing missiles our way ever since. Why? Honestly, I don’t know. This is a great big market and there is ample opportunity to support the startups in it.

I also understand that it’s much easier to imitate a successful venture than to create a new value proposition. And if imitation is the sincerest form of flattery, then consider me well flattered today.

What baffles me, though, is why an organization that purports to encourage startups would create an environment that effectively asks them to scream in a hurricane.

The companies who accept our invitation to participate at DEMO receive a ton of media coverage. DEMO 08 did well over 200 million media impressions . . . and that’s without counting the audience who read about DEMO companies in blogs and other online media and those who continue to flock to DEMO.com to view the videos of their presentations.

The companies that participated at TC40 got lots of attention, too, and certainly I’ll not take anything away from the audience reach of TechCrunch.

By putting TC50 up against DEMO, TechCrunch has created a challenging dilemma for the best startups.

Sure, they’ll have to choose which venue will more appropriately serve their needs — and the should. Here, DEMO stands on its 18-year record. The entire DEMO organization, from me and Carla who screen companies to Jackie DiPerna who helps them prepare for their DEMO experience, to our A/V team that coaches and supports their on-stage demo, to Becky Sniffen and Erica Lee who provide media support, to the DEMO.com crew who continues to cover DEMO alumni companies for years after they’ve presented at DEMO. . . DEMO is all about putting entrepreneurs first to accelerate their go-to-market efforts.

Yes, demonstrators pay a fee, an $18,500 fee, once they have been accepted and invited to present at the conference. And that’s no small hurdle for the very smallest of startups. Consistently, we’ve been told by demonstrating companies that it’s the best marketing money they’ve ever spent, with value far surpassing the dollars paid. But that fee is also a signal to the investors and business development executives and customers who come to DEMO. It says, in effect, these companies are ready to be taken seriously. They understand the value of a market presence and they’ll spend — wisely — to support their product launch and reach their potential customers, the vast majority of whom live no where near Silicon Valley and San Francisco.

But even the price and platform is not the real dilemma for startups. It’s the noise. One of the objectives of DEMO is to help companies stand apart from market noise. Indeed, DEMO was started in an age where young companies got drowned out by the Big Boys at events like Comdex and PC Expo. By bringing selectivity, an even playing field, and a relaxed venue to the table, DEMO allowed companies of all sizes equal air time with media, investors, and customers. And because DEMO focuses on selectivity, companies that are chosen to be a part of the event are even more separated from the prattle that is every media noise.

Now, 120+ companies will be vying for attention in what will be a very busy media week, what with TC50 on the tail of DEMOfall. That has at least one smart PR guy, Porter Novelli/Austin’s Josh Dilworth, to suggest that stealth startups just stay home. I’m not sure that’s good for anyone, frankly, but I can understand the counsel. Why expend any resources, regardless of the entry fee, if you can’t get heard above the noise? And with many of the people attending DEMO and/or TC50 blogging and reporting on the events, that’s a whole lot of noise. (And, frankly, it would be a shame if the media story is about either of the two conferences and not the companies presenting at both.)

At the end of the day, it is what it is. We’re not spoiling for a fight with TechCrunch. Frankly, that just distracts us from our real work: helping extraordinary products and young companies come to market in a relationship that starts at the screening process and lasts for years.

For us, it’s about the entrepreneur. He or she comes first. So, DEMO will do what it has always done: deliver tremendous value to the companies that choose to partner with its events.

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32 Comments »

  1. Jim Forbes said

    Good post and advice, Chris.
    Jim

  2. For us, it’s about the entrepreneur. He or she comes first.

    Er, no. The $18,500 comes first.

    Jason answered your “why” last year, and Josh Kopelman has clearly spelled out the business rationale (albeit in a different context). Details in my post.

    (I submitted a trackback but don’t see anything here. Perhaps they aren’t displayed?)

  3. Guidewire’s hiring of Techcrunch Mobile writer Oliver Starr seems to have set things off back in early 2007.

    I believe Guidewire would like to report on more breaking news stories, similar to technology blogs such as O’Reilly Radar or perhaps Techcrunch. Your worlds will continue to overlap, yet Guidewire will attempt to differentiate with more experienced analysts and paid subscriptions for in-depth reports. The rivalry extends beyond just conferences.

    You mention the coaching experience as a major differentiating factor for DEMO when compared to other conferences. Perhaps the coaching process could be better documented this year, following an imaginary company as they prepare for stage time.

  4. Sorry, Scott, but you’re absolutely wrong. No company has EVER paid a cent to DEMO to participate in the DEMO screening process. No company has EVER been asked about their ability to pay a demonstrator fee prior to our invitation. And very often, the DEMO organization and I actively work to support an invited company’s fund raising efforts, not just so they can pay the fee, but so that their good ideas can be viable as a business. And in many cases, over the years, we’ve found sponsorship support (money we could have kept in the DEMO coffers) to reduce or comp invited companies.

    In its nearly 19 years, DEMO has helped companies raise hundreds of millions in venture. We’ve connected companies with customers. We’ve help them reach millions through our media support programs.

    We have a business model. So does TechCrunch. One does not make the other wrong or “evil” as some have suggested. And most certainly, one doesn’t make the other a philanthropist.

    You and some others don’t like our business model. I get it. But over the years, DEMO has helped literally thousands of companies take their product to market. Most of them, presumably, found tremendous value in the venue and its support for their product launches. If not, our business model doesn’t work.

    I have always said that the TC event provides a different option and that it will be the right choice for some very early companies. They should and can coexist, just as Mercedes and Honda or Nordstroms and Ross Dress for Less co-exist.

    To think otherwise is silly.

  5. [...] not going to get into the fray on this one, but Chris Shipley has given a considered response to Michael Arrington’s shot across DEMO’s [...]

  6. [...] (Shipley’s response is here.) [...]

  7. [...] Chris Shipley hails that the by $18,500 invitation-only DEMO formula levels the entrepreneurial play…over Comdex and PC Expo, while Michael Arrington proclaims it is time to level the “pay for play“ DEMO playing field with a TechCrunch20, no 40, no 50, “free,” but by Arrington-Jason Calacanis (of Mahalao startup conflict-of-interest fame) hype machine invitation only.Both DEMO and TechCrunch50, nevertheless, share one, big, bad, our conference business model franchises come before the interests of presenting entrepreneurs flaw: Startups subject their company launch schedule to the business calendars of Shipley, Arrington, Calacanis… [...]

  8. Dan said

    Thanks Chris – this is a mature and professional response. TechCrunch are becoming more arrogant and obnoxious with what they write, and how they conduct their business.

    If TC50 suffers due to their unhelpful staging, then I hope it will remind them that they are not the be all and end all of the internet.

  9. [...] Shipley responds: No company has EVER paid a cent to DEMO to participate in the DEMO screening process. No company [...]

  10. [...] Demo verses Techcrunch – Strategy Flaw for Techcrunch April 3, 2008 Posted by John Furrier in social media. trackback I woke up this morning to the announcement of TC conference for startups.  I have been to Demo since 1997 and Demo has been a consistent and credible player for years.  Suddenly Techcrunch arrives on the scene and punches Demo in the mouth and competes directly with Demo’s franchise.  [...]

  11. [...] Chris and the execs at IDG are lining their pockets with filthy lucre. As Chris pointed out in her post, that money goes to extensive coaching on every level, and yep, some of it is profit. Shocking [...]

  12. Kai said

    I’ve been to both events, DEMO and TC, and they are not really different from an attendee perspective, both have quality companies. Obviously TC is trying to knock out DEMO with planning their event so close. The DEMO business model is certainly a challenge and for bootstrapped companies, the $18.5K is a lot, so why would they not prefer a free event. DEMO does do a better job in terms of PR and visibility, but as TC get a better feel of the conference business, they will get better with the PR. At the end of the day, both DEMO and TC make a lot of money, so no one should feel sorry or angry over this. I don’t think that the current enviornment will be able to sustain both of these conferences during the same time, so one will need to move in terms of scheduled dates.

  13. [...] others see it for what it is and Chris Shipley, executive producer of DEMO, refuses to be sucked into a death match: What baffles me, though, is why an organization that purports to [...]

  14. Don Jones said

    Mike makes money and gets press because of his in-your-face style. It is a calculated strategy, so I wouldn’t get annoyed at it.

    Chris, I haven’t been to a DEMO yet, but I hear that you run a quality conference that delivers great value to tech companies wanting a top-notch venue to showcase their new technology. As long as you differentiate yourself from TC’s low-ball conference, you will do fine.

  15. David Ward said

    Every entrepreneur should have an equal opportunity to present a killer startup idea, it should not be about the ability to pay the $18,500 for DEMO. If you truly have a great idea and can make it through the screening process then thats what matters. You can make more than enough money to cover the event by adding sponsors and advertisers. All you’re doing by charging is taking the startups much needed cash that would be better spent on launching the business, marketing, etc.

  16. Pete said

    Free is going to always beat out fee. Industry gate keepers, especially paid ones, will always, ultimately, fail. You ought to go work for Jason :).

  17. [...] Chris Shipley responds that Arrington obviously doesn’t have the startups best interests at heart, because this will mean over 100 companies launching within a 5 day period. It will be impossible to be heard above the noise. [...]

  18. I’ll start by saying that I’m completely willing to believe that *you* sincerely believe everything you’ve written. In fact, that was part of the motivation for my post. If you honestly didn’t know that many people find the $18,500 to be outrageous — now you do.

    No company has EVER been asked about their ability to pay a demonstrator fee prior to our invitation.

    That’s irrelevant. Do you have a published sliding scale based on how much money the company has raised? No.

    I also understand that it’s much easier to imitate a successful venture than to create a new value proposition.

    The value proposition is *exactly* what they are attempting to change: offering something that you say is “all out of the DEMO playbook” — but for $0.

    This is a great big market and there is ample opportunity to support the startups in it.

    That *so* sounds like the lament of a high-priced monopolist who is objecting to competition based on price.

    Or, a BMW dealership complaining about the Chevy dealership that opened across the street.

    If DEMO offers so much more value, why the loud protest?

  19. How is competition good or bad (in specific instances), or good and bad, is a better question (angle/focus) than asking whether competition is good or bad. Recognizing that competition is inevitable is a large part of that process. But what are the ground rules for competition? That is an important focus as well.

    What is opportunistic is more than just an individual company and event matter. What grows the total market, the total pie (not that there is a single answer to this, or that any answer is not nuanced, debatable and perhaps difficult to determine or discern)? Who wants to be the biggest player in a small(er) market? These truly are not judgments (or statements), and not jugments related to this case. These are questions that apply in competitive situations across the board.

  20. Sean said

    It’s interesting to see the same startup dynamics that get celebrated at these events play out in the events themselves. Taking an existing model and turning the economics upside down (by removing a fee to present) is a standard feature of successful startups. I guess it’s true that all industries are open for innovation.

  21. Mike and Jason learned early on that the best free publicity they could get was by setting themselves up against better known brands. Witness the TechCrunch obsession with CNET. Your turn.

  22. [...] the folks over at DEMO 08 while not surprised by the competition wonder why it is that an organization; like TechCrunch, would be creating an environment where startups are [...]

  23. I’ve launched at both DEMO (Kosmix ’06) and TC40 (Powerset ’07). Both were excellent venues for my companies and each got plenty of coverage. However, if I had to do it again, I’d certainly prefer DEMO. TC40 last year had a number of problems. Sure, we didn’t have to pay a conference fee, but we also didn’t have a booth to show off our stuff. We basically got 5 minutes on stage plus any media time that our PR firm could muster. The focus on demonstrations in the big conference room got tiring after awhile: I only made it through about 1/3 of the total demos. For companies that didn’t make the top 40, there was a Demo Pit (aptly named), but it was stationed away from foot traffic and had a ridiculous concept of giving chips to the best companies. Overall, I felt that DEMO was a more professionally run conference and TC40 was showing its growing pains. We in the Web world have an unfortunate focus on the *new* and forget the power and value of experience. DEMO does a fabulous job of bringing together themes, Chris is an awesome and insightful host, and the interaction I had with colleagues at DEMO has yielded lifelong friendships.

    Regardless of which conference is “better,” I think it’s unfortunate that TC50 this year decided to pit itself directly against DEMO: there’s just no reason for that kind of direct competition. I think both conferences will suffer, since press can’t be at both places at the same time and the flood of companies launching will be overwhelming.

  24. phil said

    As a technology columnist I attended TechCrunch last year and have been attending DEMO for many years. I found TC’s participants to be showing more snippets of ideas rather than real companies. Perhaps that will change. DEMO has always had a collection of excellent participants and is one of the best press events that I attend. Michael Arrington is clearly trying to destroy while trying to build his conference. Why? What legitimate purpose does that serve? I like covering companies and conferences that are managed by civil, fairminded, and not nasty people, run by likable, smart and considerate individuals. Someone like Chris and her staff. I’ll cast my vote by attending DEMO and giving it more coverage than ever! If Arrington’s scheduling is intended to get journalists to make a selection I suspect more will choose Demo for the reasons I did.

  25. John Lynn said

    Well written post. It is lame that it’s the same weekend. Last Techcrunch 40 was too many companies at one time that I just had to skip over it. Now with TC50 and Demo on the same weekend, I’m sure it will be way too much noise.

  26. [...] model. Shipley, though advised otherwise, replied in a polite – but with a couple of jabs – blog post of her [...]

  27. [...] as DEMOfall 08.  This pissed the DEMO folks off, specifically Chris Shiply who suggested ‘Imitation is flattery? Or just bad for entrepreneurs?‘  Mike and Jason did fire a shot across DEMO’s bow, but anyone who has the gaul to [...]

  28. [...] last April. The conversation hasn’t improved much since then. Demo honcho Chris Shipley was a bit more polite in her response: I’m not at all surprised by the competition. A year or so ago, TechCrunch set its sites on [...]

  29. Juha said

    Can I be a vile pendant and point out the sites/sights tyop?

  30. Sure. But please make it “site’s typo.” ;-)

  31. [...] the time, DEMO’s Chris Shipley tried to take the high road but since then, the drama between the two conferences has only [...]

  32. [...] the folks over at DEMO 08 while not surprised by the competition wonder why it is that an organization; like TechCrunch, would be creating an environment where startups are [...]

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