Its about that time again in the cyclical world of technology . . . when founders divorce their first love and move on to prettier, younger, more interesting other founders. . . if only because grass always seem greener. There are so many backstories that I have yet see any other blog cover. . . perhaps its not the right time to piss on the parade or perhaps its just too close to heart. Skobee is headed down that path . . . but perhaps an even more text book and high profile example. . . it’s whats going on at Edgeio. I have no inside information, and everything is just gleamed from reading and observing. Even more so, this is not an indictment on business models, the company, or the people involved . . .it is a fact of life .. . and I’ve been through it myself on both sides. . .

So what the hell is going on with Edgeio and Crunchboard (or Mike Arrington & Keith Teare)? It is kinda of obvious that Mike no longer spend much of his effort at Edgeio . . . trying to turn CrunchXXX into a media empire. Has he given up? Does he not believe in it anymore? Or at the very least, he thinks CrunchX is more interesting and have higher upside . . . Even more telling to me is that


EDIT: Apparently Mike is not a founder of Edgeio, he is a board member. As a result, his involvement is not meant to be on a daily basis in the first place.

1) ChrunchBoard is not being aggregated by Edgeio (there are no CrunchBoard listings in Edgeio)

EDIT: This is not correct, I could not find crunchboard listings at crunchboard launch but that is no longer correct.

2) ChrunchBoard’s new aggregator vision is decidedly Edgeio-esq (As Alex Bosworth points out)

The same story played out during the whole social networking crazy between Six Degrees, Friendster, LinkeIn, and host of other G1 social networking companies. . . all the founders were friends, sat on eachother’s boards, invested in their companies, and eventually took spins from an original idea and launched their own potentially competitive ventures . . .

This post is not about Techcrunch etc . . . its about using it as a case study to see what entrepreneurs can do . . . So what to do? What to do when your co-founder has ADD and moves on to the next new new thing before finishing the current committment? How to you communicate to your investors when your co-founder move on (remember VC’s like to say they invest in teams, so if 50% of the team moves on, 50% of the investment thesis also disappears) . . . Even worse, how do you raise the next round? What kind of message does this send to VC’s who are comtemplating investing in the next round. Saying that your co-founder just like to “start companies” and not execute is just an excuse . . . its the same damn excuse VC’s feed the press when they force out a founder (remember the official spin Tribe gave for Pincus leaving) . . . besides what is starting companies . . .its executing really fast :) . . . VC’s can smell their own bullshit a mile away. This is what VC’s calls a “hairy” deal . . . they have twenty other companies to look at, they dont want to deal with a cap structure with baggage. . .

Ofcourse this shows that its extremely important to have vesting schedules for ALL co-founders so that no one can walk away and still own as much as the next guy. (I touched on this before) . But beyond that, what else can you do? Play nice, spin it as well as you can, and hope the business fundamentals/metrics will make it attractive enough to sustain the cashflow (through operations or financing). Ofcourse, pick your co-founders carefully, and know their value add (short term/long term) before jumping in bed . . . founding companies is by definition a risky venture . . .you have to truly believe . . . having one leg of the table being taken out can wreck havoc on the culture and morale of the company. . . (there is probably less than 10 employees) if your co-founder has a “put option” he or she might not be the best candidate . . . unless you are planning for it . . . still its hard to pitch to a VC and tell them that one of they guy they are talking to is leaving . . . LP’s dont like having partners leaving midstream either . . . they have clauses that let them take money one in case it happens. . . so VC’s understand . . . No founder leaves $100M in equity on the table just because he/she likes to “start companies” (if ~20% /= $100M VC’s aint interested in the first place).

I’ve been the ADD guy before, and I’m probably still am. . . but I’m extremely self-aware . . . I tell myself to focus, execute, build everyday much more than telling myselg to think bigger and have a new vision . . .

I dont like it (the people (sometime me), the thinking, and the culture that promotes this) . . . there is a HUGE difference between serial entrepreneurs and ADD entrepreneurs . . . starting companies is not a scarce resource/skill . . . BUILDING companies are . . .