Cambrian House vs TechCrunch: Is Crowdsourcing Dead?
Today TechCrunch reported that Cambrian House (a leader in crowdsourcing) has been sold to Spencer Trask and will form a new company called VenCorps.
Sources inside Cambrian House have denied that the company has been sold and point to a New York Times article, about the company that points out the opposites. With more information on VenCorps coming soon.
So who would you trust the New York Times or TechCrunch?
Update: Erick Schonfeld from TechCrunch admits to reporting unconfirmed info:
Erick Schonfeld
May 12th, 2008 at 6:07 pm
Cambrian House confirmed most of this post. It wouldn’t comment on the price of the asset sale.I know for a fact that they were trying to raise more funding, couldn’t, tried to sell the whole company, couldn’t, and finally settled for what they could with the asset sale. I also know the price Spencer Trask was willing to pay kept going down.
I can’t get into my sourcing. Suffice it to say, when I called Cambrian House, the details panned out.
NOT IMPRESSED!
Update 2:
Post by Cambrian Houses CEO Michael Sikorsky (MJ)
Michael Sikorsky (CEO - Cambrian House)
May 12th, 2008 at 9:18 pm
Erick:
Indeed, our model failed. We’ve spent many hours reflecting on it, and, I’d be happy to share our learning’s in detail with anyone keen on the crowdsourcing space.
But, in short: we became a destination people loved to bookmark more than they loved to actively visit (our traffic pattern was scarily VC-ish). The limiting reagent in the startup equation is not ideas, but amazing founding teams.
A key assumption for us, which proved out NOT true: given a great idea with great community support and great market test data, we would be able to find (crowdsource) a team willing to execute it OR we could execute it ourselves. We needed amazing founding teams for each of the ideas – this is where our model fell short.
What we learned: it would have been better to back great teams with horrible ideas because most of the heavy lifting kept falling back on us, or a few select community members. A vicious cycle was created leading all of us to get more and more diffuse.
Hence: the wisdom of crowds worked well in the model, but it was our participation of crowds aspect which broke down. Trying to find people willing or capable to take on the offspring (our outputs) of the CH model was hard and/or incredibly time consuming.
For clarity of your story, and perhaps, just pride for my team and my investors:
- You missed http://mob4hire.com in your original post. Paul and his team launched this completely using the CH platform.
- The team and community at CH are top-notch. I’d be proud to follow them anywhere.
- We were and are still able to attract investment (this you just have wrong). However, we believed the model was off (once you have this feeling in your stomach you don’t take on additional capital until you’ve figured it out).
- Fire-sale of our IP - two points: #1) We haven’t sold our IP – we still own it – and the IP of the portfolio companies. #2) Erick – you know as well as I we won’t comment on the deal specifics. However, I believe deeply this was the right move for the community.
- The ‘rebirth’ with VenCorps goes to fix the failures I identified above. With VenCorps, the ideas don’t matter anywhere as much as the teams do.
- I’m bullish crowdsourcing but how/what you can apply it to is still under-test.
- Deadpool – yes, our original model can clearly be put to rest. However, the same can’t be said for the company.
Michael Sikorsky, CEO of Cambrian House
Thanks for clearing things up.
updated info on VenCorp here
May 12th, 2008 at 9:21 pm
The NY Times article is from March 3rd. That’s hardly valid information now. TechCrunch is pretty reputable.
May 12th, 2008 at 11:32 pm
In this case I have to disagree.
May 13th, 2008 at 11:36 am
Well the information has now been confirmed, and Jasmine Antonick has been revealed as the source of the information, including that the site will “dissolve in three months”. You are obviously wrong and should fess up.
May 13th, 2008 at 11:47 am
Thank you for your response but since I have talked to Jasmine my self and she has said that it is untrue then I am going to believe my ears vs his.
May 13th, 2008 at 5:20 pm
Hmmm Sikorsky says that;
“You missed http://mob4hire.com in your original post. Paul and his team launched this completely using the CH platform.”
yet the CEO says that:
“Firstly, I would like to state that Mob4hire was launched entirely using members of the Cambrian House community but not with Cambrian House investment. Mob4Hire is not and has never been owned by Cambrian House in whole or in part. Mob4hire Inc. is a private corporation.”
so… is mob4hire a CH project? seems like there is a conection, but an altruistic one? CH helped build mob4hire for free. Doesn’t make sense like the rest of the CH model.
Sounds like another flip a dead company into a new one at a fraction theinvestment and pretend that it was a legitimate exit.
May 14th, 2008 at 12:39 pm
“Sounds like another flip a dead company into a new one at a fraction theinvestment and pretend that it was a legitimate exit.”
@john: That’s because that’s exactly what it is. And since Paul P. was on the payroll and in fact spending a lot of time at CH during Mob4Hire’s development, I would say it’s a fair statement that CH’s investors basically funded Mob4Hire’s creation.