Nik - good stuff. Was there ever a monetization plan when you were building it or was it always just always viewed as a complementary asset to TC as you highlight above?
Comment from TC article left by IronToby which is a great point:
"Sounds like they wanted people to contribute content for free while they're the only ones allowed to profit from it."
We incubated a few projects (Crunchbase, Crunchpad, Crunchies, Techcrunch40) and even acquired some (Inviteshare) - they were all developed with less or no emphasis on revenue or commercialization but to offer products/services to the startup community (eg. Techcrunch40 didn't charge startups to appear, Crunchbase was CC licensed and open, the Crunchpad was going to be sold at cost).
There was some upside for us, but in those first years the entirety of revenue was poured back into developing other projects (Crunchbase and Crunchpad were both 7-figure investments). The projects did help the brand, but likely not in any real ROI sense. I don't know how Crunchbase was valued in the acquisition, it likely wasn't, since the acquisition price was close to a market multiple on Techcrunch ad revenue alone.
They were all a lot of fun to work on, we had a great team of people, some excellent interns, developers and partners and it made working at Techcrunch all that more interesting (at many points we had more developers and people working on these projects than we did working on the main site). It was a philosophy of doing well while doing good.
The idea of Crunchbase was for it to be a co-op with other blogs, and that the writers would keep it updated while they wrote posts on each company. That didn't work because the other blogs saw it as a threat (a lot of them ended up signing with a commercial alternative that had raised $5M and spent a lot of that money signing up blogs as part of 'revenue guarantees').
The active decision was then made to make Crunchbase open. This is alluded to in some of the other comments in this thread, and that is if you develop the site as a commercial service then users have an expectation that the data is up to date, correct and deep. The alternative is an open platform, where users and other blogs are part of it - the argument that when Wikipedia has poor information users don't blame Wikipedia, they roll their sleeves up and fix it themselves. That was at the core of Crunchbase - not commercial, owned by users, therefor we wouldn't have to make the tradeoff of 'owning' it completely and having to invest extensively to keep the quality at a level expected of a full commercial service (although we did have almost a dozen people working on Crunchbase).
I don't think AOL have thought that through in the same way. You can't on one hand take advantage of the openness of user contributions, not keep the quality up with investment but at the same time expect to protect it as a commercial service. The only commercial ideas we had for Crunchbase were as additions, eg. custom reporting, research, etc. By design the platform was open, free, forkable and insulated from commercial acquisition.
That philosophy just came about naturally because of the group of people involved. There was a little skepticism, but it didn't take long for everybody to start throwing out ideas on making and keeping things as open as possible. It shouldn't surprise us that with an entirely new group of people (bar one, IIRC) and a new corporate parent that parts of it might be altered, but in reading Matt's response I can see that 95% of what was in place is still there, they were just caught out and mishandled this one case. Very strange to see now that Techcrunch and the EFF are on opposite sides of an argument, I hope they clear it up. We used to monitor implementations[0] and send an email requesting a link back or a logo, never had a problem with it - it definitely never reached the point where a lawyer would be drafting a C&D. I don't think we ever reached the point of having a clone or API user that we didn't get a along with.
[0] We setup a number of Crunchbase records that served as canaries - fake company names (on domains we registered) that were only in Crunchbase. If we find those company names anywhere online, it would be a hint that somebody took the data. If they didn't cite the source, we would email them, and in almost all cases it was resolved amicably. We wanted nothing more than to enforce the 'attribute' part of CC+A. A big part of the reason why Crunchbase records rank so well in SERP pages (it is usually in the top 5-6 results when searching for a name of a startup) is because of the "free data, but link back" policy. It means crunchbase.com was always the canonical source for Crunchbase data.
This article is well-written and The Verge's production quality is tremendous. Can we get more like this?
On Everpix - pretty shocked at the candor/level of disclosure in this article including from the founders and Index Ventures. VCs tend to keep mum about their misses so a bit refreshing to see.
For the past year and a bit, The Verge have been lightly dipping their toes into startup journalism. See Alexis Ohanian's "Small Empires" on there for an example.
I personally hope they give it a bigger shot, as it fits their cross-section of tech and culture that they're aiming for, and I've loved the writers since some of them were back on Engadget!
I think the comments by Matt Kaufman (president of Crunchbase) about the damage that can be caused by "Crunchbase replicas" reflect the knowledge on AOL's part that Crunchbase is a potentially very interesting data asset. And so the reality is that they'll prob revisit rights to Crunchbase, and it'll go from very open to something less so (how far is the question). I would also guess that Crunchbase has a paid subscription offering in the works.
I would also speculate that People+ may be the first "offender" Crunchbase will target. Datafox.co, Mattermark, Inkwire.io might all find themselves in the crosshairs.
This also underscores a common mistake developers make which is creating on someone else's platform where the rules can and will change significantly especially when monetization becomes important. And it seems monetization is on Crunchbase's mind.
Update:
This post on the Crunchbase blog articulates that monetization is coming and that the above "offenders" may be hearing from AOL counsel soon.
"CrunchBase must remain open to anyone who wants to contribute, and retrieving that data for non-commercial benefit must remain open as well. That said, to invest in CrunchBase’s constant improvement requires building a business around CrunchBase in a way that successfully takes into account our terms of service and our openness."
I had a similar thought. It seems that CrunchBase has bigger plans and will be expanding its offerings to become competitive with other startups that are relying on their platform.
This is going to increasingly become common esp as governments try to cover budget gaps. We just went through a sales tax audit for our SaaS company and so are expecting a good size bill for taxes not paid + penalties. Yes - fun stuff.
Honestly, the gov't folks are playing whack-a-mole here trying to keep up with fast-growing areas that don't fit the old "you sell this widget for $X" model they're used to. And so they're going to write overly broad rules as they don't understand technology and related industries. There is no intrinsic reason that SaaS should be free of tax and so the more worrying aspect of this legislation (NY has similar) is that it is so difficult to understand and open to interpretation and the mental tax it imposes on businesses who live in a cloud of of uncertainty about how they should treat their revenues.
That said, I think the idea that it will drive biz out of the state is naive. California is not a particularly biz friendly state in terms of taxes but the Valley and even LA seem to be doing just fine.
I stopped working with a client already over this. Simply put, cash-flow wise I can't currently risk taxes and penalties. It turned a customer into a liability because of the horrible wording and unclear guidance (seriously, they want us to pro-rate by the % of our software used in the state?).
I suspect many other small start-ups will make the same choice we did until this all gets sorted out.
Out of curiosity - what made you feel that burden was placed on your company? From what I saw if you didn't have a MA tax ID and didn't have a physical presence in the state that burden would be placed on the purchaser.
Personally I read that it's kind of like sales tax, and buying online. If the seller doesn't do business in the state you reside it's up to the purchaser to pay the tax.
My lawyer was unable to assure me of this -- the law is terribly written. Due to the nature of the data worked on, I have to travel to MA and do a major component of the work on site.
My understanding is "rewording and clarifications" are coming. I know my client (employes hundreds of people) has unleashed a bit of hell over this -- we will see what will happen.
California's unemployment rate is 8.6%, 1 full point higher than the national rate, in spite of the booming tech sector. A lot of people in California are doing terribly. For example, Imperial county's unemployment rate is 23%. Around half the counties are still over 10%.
SaaS was certainly not "free of tax" before this - businesses pay state income tax and developers who created the service pay state income tax. Now any Massachusetts based SaaS is at a 6.25% price disadvantage to an out of state business.
There are a ton of reasons the stay in or set up shop in California. Talent pool, established community, etc. I can't think of any for Mass. Massholes.
SiliconValleyVC - this account has to be the worst attempt at astro-turfing I've seen in a while from a company employee or founder. Does anyone talk like this about a vendor (much less a data company) -- "I respect PrivCo from my working with their remarkably accurate data." Right right.
You're a SiliconValleyVC whose submission history is 2 privco articles. And your comment history references PrivCo multiple times and your love of them.
So perhaps you're just a really really happy VC client of a data tool or more likely you are here at the behest of your employer/are with the company and trying to salvage what must be a very bad day at the office - data company whose data gets called garbage.
On to your points to Fred:
1. If you've seen the docs, share them.
2. There was no ad-hominem attack. Fred called your data b.s. He has the #s so is in a good position to make that claim.
I can understand you're trying to save face for Privco after respected VC's Fred Wilson, Bijan Sabet have called you out. Plus, today, editors of 3 major tech publications called you out -- Jay Yarrow of Biz Insider, Eric Eldon of TechCrunch and Mike Isaac at AllThingsD all said Privco data and claims are incorrect and hyperbolic.
Pls don't insult us here with this very sad attempt at covering for your employer/company.
We get lots of I'd be willing to pay X and we always send them a link for exactly that amount. And they never pay. We even follow-up just to give them the benefit of the doubt and they still never do.
Being the low cost provider for software (at least those targeted at corporates) is not the way to go. When people are spending OPM, it's more about the problem you solve for them then the cost. (note: of course, cost can't be insane but you get the idea. OPM = other people's money)
Comment from TC article left by IronToby which is a great point:
"Sounds like they wanted people to contribute content for free while they're the only ones allowed to profit from it."