Itâ€™s tough being a journalist, especially if youâ€™re covering technology and living in Silicon Valley, because it seems as if everyone around you is getting fabulously rich while youâ€™re stuck in a job that will never, ever make you wealthy. Whatâ€™s worse is that all these people who are getting rich donâ€™t seem to be any brighter than you are and in fact many of them donâ€™t seem very bright at all. So of course you get jealous. And then you start thinking maybe you could find a way to cash in on this gold rush. But how do you make gobs of money when your only marketable skill involves writing blog posts?
This is the conundrum, but lately Iâ€™ve been thinking of a business plan that sounds like it could work. First you establish yourself as an â€œinfluencerâ€ by posting a lot of noisy stuff on a blog and building an audience. Then you need to â€œmonetizeâ€ your influence. You tell all the VCs in the Valley that you are starting an â€œangel fund,â€ and you ask each one to give you, say, $500,000. They go along because (a) $500,000 is pocket change to these guys â€” so small, in fact, that they donâ€™t care if they lose every penny of it; and (b) youâ€™re an influential hack and they donâ€™t want to piss you off; and (c) they figure you can maybe write nice things about their portfolio companies, which would be especially useful if/when one of their portfolio companies gets caught up in some scandal; and (d) if any independent journalists write something critical about one of the VCâ€™s portfolio companies, you can can use your influential personal blog to savagely attack those journalists and try to discredit them.
So you raise $10 million or $20 million, and now youâ€™re an â€œangel investor.â€ Step two is you go around to startups and tell them youâ€™d really like to invest in their companies. Not big investments â€” maybe $100,000. They donâ€™t need your money; they can raise money from anyone, and usually youâ€™re one of 10 or 20 small investors in a round. But the value you add is that youâ€™re an â€œinfluencerâ€ and can be helpful when it comes to getting good press or offsetting bad press. (See paragraph above.)
You might think of this as a new kind of PR, only youâ€™re way meaner and more effective than a PR flack, and instead of getting paid in billable hours, youâ€™re taking payment in angel-round equity, which in a few years should be worth 10-100x whatever those billable hours would have been worth.
In fact this is a new version of an old racket that used to be practiced in the tech space by guys who called themselves â€œindependent analysts.â€ Their deal, back in the day, was this: â€œPay seven figures a year to buy a corporate subscription to my newsletter and Iâ€™ll say nice things about your company, and when the press needs a quote, Iâ€™ll be there to puff you up. Or, donâ€™t buy a subscription and I will bash you relentlessly.â€ Most big companies paid up and considered it a cost of doing business.
Well, this is the model I was thinking about, but it turns out someone beat me to it â€” itâ€™s called CrunchFund, and in the past few days weâ€™ve seen the machine in action, and it is indeed a beautiful thing.
Walking home from the fourth annual f8 conference earlier this week I kept wondering why I hadnâ€™t gone over to the massive Sean Parker/Spotify after party. Over the past few years, Facebookâ€™s f8 after party was an opportunity to schmooze with people of all levels within the company. This year however, the â€œA-Listâ€ and â€œB-Listâ€ along with the press were shuttled over to listen to Snoop Dogg, Janeâ€™s Addiction, and others.
While I actually could have headed over thanks to my f8 press pass, I decided just to head home. There was something about this exclusivity that was genuinely frustrating me. Walking around the f8 after party, I had the opportunity to chat with Facebook employees, but none of the â€œimportantâ€ ones appeared to be there. Whatâ€™s just now starting to sink in is how tasteless the over the top party actually was. While Sean Parker spent tons of money earned from his Facebook shares on a Spotify party with top tier talent, the majority of Facebook employees got to listen to a second-rate artist screeching through the speakers in the main concourse center.
The ironic part is that the hard work of the individuals in the official f8 party are what helped make Facebook the company it is today. I can guarantee you that any of the people at the official event werenâ€™t feeling too positive about the experience. People who literally created some of the content that Mark Zuckerberg showcased on stage werenâ€™t invited. They also sounded pretty ticked off.
This sort of exclusive mentality is exactly the opposite of what has built Silicon Valley. I remember going to one of the early unofficial Facebook developer conferences and Mitch Kapor, the founder of Lotus, came to chat with developers who were building some of the first apps. Talk about being a humble billionaire. Having access to these people is exactly why I found Silicon Valley to be so incredible. Yet over the past couple years things have changed. At Techcrunch Disrupt Erick Schonfeld asked me naively, â€œYou would actually meet with other strangers?â€, referring to the Holler application. Correct me if Iâ€™m wrong but wasnâ€™t that the purpose of the very conference he was hosting?
As an employee who has felt both included and excluded from major organizational events, you have no idea how much more valued being included made me feel and how being excluded made me feel devalued.