Why the TechCrunch Economy Will Falter

Reading yesterday that AppLoop has apparently shut down impressed upon me a fundamental flaw in the startup economy promoted by a wide swath of pundits and proponents, that starting is more important than sustaining.

Now, we’re hearing rumors that the startup is in trouble, and they appear to hold some truth. For one, the company’s website has been down for the past two days. Worse, a quick glance on Twitter suggests that the service’s downtime is also causing iPhone apps using AppLoop libraries to crash.

[From Is AppLoop Fading Already?]

I don’t have an agenda in singling out TechCrunch and truth be told I greatly admire the brand that Mike has built from scratch but the fact remains that more than anyone else TechCrunch has become a the standard bearer for the high velocity coverage of the web 2.0 brand of startup. Their hit and run coverage, often caustic as it is complimentary, does not offer a methodical or comprehensive approach to assessing merits and weaknesses and this is all too common in the startup economy where layers upon layers of assumptions are taken at face value.

Having launched NewsGator’s iPhone app service I can tell you from experience how complicated this product area really is. The idea that a container app into which you pump any RSS feed would be something to build a business on is highly suspect on it’s surface, you don’t even need to do much digging to figure that out. There are the issues of content aggregation (multiple feeds), fair use of other content sources (often not provided in full text anyway), the AppStore insertion process, app hosting requirements that raise issues about data center operational requirements when content feeds are taken into account, and a thousand other issues.

TechCrunch covered the launch of this self-service product a mere 75 days ago, 6 months ago for the advertising service, and it is already shuttered. What does that say about the mountain of coverage they were able to garner when they became available in a closed beta form? If the point is to amplify events then we are no better than agents of the PR industry, but if the objective is to present coverage that blends facts and opinion based on critical analysis, then the AppLoop case presents a compelling example of why tech blogs have not yet risen above their role as cheerleader and promoter.

I am hesitant to post this because I know from my own experience that there is, on any given subject, deep and compelling research and analysis available in the blogosphere. My complaint is really that just like in all media segments the blogosphere has become brand centric and despite a lot of rhetoric about long tails the fact remains that coverage is disproportionately tilted to a handful of sites. How do we accomplish the greater good of aggregating the best and brightest coverage instead of just amplifying the loudest voices?

If all we care about is starting things then the tech economy will eventually falter because at some point you have to answer the critical question “why do you matter?”. This simple question should be at the top of the list whenever any company or product is written about, I know that it will be for me going forward.