Episode 34: In which I rub my hands with glee – and my head with confusion – over the prospect of Sam Sethi's lawsuit against Techcrunch
Good news, London! Later this week, the "traveling geeks" arrive in the capital. Comprising some of Silicon Valley's most influential tech bloggers – Sarah 2.0, JD Lasica, Robert 'Bloody' Scoble and Sarah Austin to name a few – the geeks will be touring the capital (and Cambridge), meeting British entrepreneurs and sharing their inside knowledge about all things Silicon Valley.
For us lucky Brits this represents a unique opportunity – an opportunity to complain loudly that we don't need a bunch of soi-disant social media rock stars coming over here and telling us how to run our industry. And then, after that, an opportunity to skulk off to the pub and mutter quietly among ourselves about what London needs to do to become as cool and successful as Silicon Valley.
The rivalry between them and us has always, of course, been completely one sided. While we obsess about creating web start-ups in the American mould, and dream of selling them to AOL or Google or Yahoo, most US founders would struggle to name even two or three London-based start-ups. Last.fm, possibly (owned by CBS); Bebo, probably (AOL) and perhaps at a push Moo. And as for "Silicon Roundabout" – we freaking love that name don't we? We should be thoroughly ashamed of ourselves.
I've always thought that if we are ever going to win our quixotic fight against our Californian rivals – to really give those windmills what-for – then the gloves need to come off. Forget all this "building a solid business" crap, forget carving out our own niche. No, we need to get on our horses and charge their armoured HumVees with such force that they don't know what's hit them.
And so you can imagine my delight when – at a little after midnight, a squeak away from my deadline as usual – Michael Arrington went public with details of an impending lawsuit against Silicon Valley's Techcrunch from London's very own Sam Sethi. And, as lawsuits go, it was a doozy: a good old fashioned British libel action over claims by Techcrunch that Sethi had lied, stolen and possibly even possibly threatened to kill during his attempt a couple of years to build his own rival blog network.
In case you were lucky enough to avoid the fight first time round here are the raw facts, lashed together from memory and only the merest hint of Google ...
The story started, like most of these do, with a business relationship. In 2006 Sethi was editor of Techcrunch UK and as such he attended Loic Le Meur's Le Web, presumably for the superb food. Sethi wrote a scathing review of the event on Techcrunch, despite the fact that the blog is a Le Web media sponsor. To make matters worse he went on to boast that he was organising a rival conference. Loic responded in a delightful French way, calling Sam "un asshole" but Arrington, worried about the conflict of interest, told Sethi to "fix this or I can't work with you".
To trim the huge amount of fat from this dull pig of a story, Sam left Techcrunch, initially claiming to have been fired but subsequently saying he'd quit. He immediately began making plans for a rival blog network, first called Vecosys and then – once he came to his senses – Blognation. After a while he and Arrington made up – even shaking hands at FOWA – but then things began to go sour again when one of the original founders of Blognation – Lee Wilkins – left the business, which led to the "threatening to kill" claim. What Sam had done was, in the heat of an email argument, say that he would "fucking rip your head off". Arrington ran the claim anyway.
After that, things really started to hit the fan. By his own (subsequent) admission, Sethi had started lying to his team, saying that Blognation was on the verge of receiving funding which would allow key staffers to be paid and would ensure the survival of the company. Certainly discussions with investors were happening – and eventually Secora issued a draft term sheet, although it was never finalised or signed. It was this term sheet – which should have been the Sam's saviour – that turned out to be his undoing when an unknown person, apparently close to the deal, leaked it to Techcrunch. Hours later the deal with Secora was dead – with Sethi claiming that Arrington's publication of the terms had spooked the investors so much that they had pulled out. (In a conversation I had with Sethi this week – more on that in a moment – he revised that claim, saying that the publication had actually prompted Secora to change the terms of their offer. Sethi felt unwilling to negotiate further – "after the weekend I'd had" – and so walked away from the deal himself.)
Whatever the truth, to all intents and purposes Blognation was dead, and before long a number of former editors – most vocally Oliver Starr – were publicly attacking Sethi, claiming that he'd deceived them from the beginning. Arrington, of course, gleefully covered every word of the unfolding drama, especially after Sethi published an open letter on Blognation – entitled "Here's To You Mrs Arrington" – blaming him for scuppering the company's chances of securing funding and thus sentencing it to death. Sam later took down his letter, but Arrington's response – "The Fact And Fiction of Sam Sethi" is still available for all to read. In one sad, final twist, not long after Blognation's collapse, Marc Orchant, another of the site's editors, died suddenly from a heart attack.
Apart from the tragic death of Orchant, the story had all the makings of a good internet fight. Full of sound and fury, signifying nothing more than a few months of drama for 20 or so interested parties. And sure enough, for most of us, the story faded from memory. Arrrington moved on from hating Sam to hating Last.fm and Sam vanished completely from the London Internet scene, becoming little more than an occasional running gag at insider gatherings who liked to speculate when he'd pop up again.
For me, the answer to that speculation came a few weeks back when rumours started to fly – on both sides of the Atlantic – that Sam was not only back but that he had got himself a lawyer. I called Sam from San Francisco: were the rumours true? Yes, but could I keep it under my hat until papers were served, in exchange for the exclusive on his side of the story when the case was public? Sure, why not. Meanwhile what I'll disingenuously call "sources close to Techcrunch" told a similar story, albeit without offering the carrot of exclusivity. My willingness to sit on my hands for a while was less to do with getting an exlusive and much more to do with the fact that I couldn't imagine Sethi would ever issue proceedings. He had just launched a new startup, people were just starting to forget about Blognation, the hornets' nest was still and almost all of the hornets were asleep. Why on earth would he then throw a rock at it?
And it's for that reason that at a ridiculously early hour of the morning, despite my hatred of proper journalism, I picked up the phone and called Sam. Really, I had only one question for him: "Are you out of your fucking mind?" And given that he agreed to speak to me on the record, I can safely say the answer to that question is yes.
What fascinates me about the suit is the question of what Sam can possibly get out of it. Sethi has admitted that he lied to his staff in misrepresenting the financial position of Blognation. Firstly, British courts not mad-keen on litigants who come to them without – as they say – "clean hands" . Secondly, Techcrunch is based in the US where recent changes in the law offer protection against libel tourism where "libel standards that are contrary to US libel standards would be repugnant to the public policies of … the United States." Even if Sethi won his case, he'd still face a second fight to actually collect any damages awarded. If there's a better example of a lose-lose situation, I can't think of it. If on the other hand the case is thrown out, Arrington is likely to redouble his attacks on any future Sethi business, leaving Sam unemployed and potentially unemployable. I put these suggestions to Sam as delicately as I could.
"Are you out of your fucking mind?"
"My lawyer obviously thinks I have a case – and the court was prepared to file papers. And anyway, I'm not doing this for me. Any damages will go to Marc Orchant's family, and to the editors who stayed loyal to Blognation and who are owed money."
That's all well and good, I said, but if you can't collect the damages, there'll be no money to give. Curiously, and perhaps tellingly, at this point Sethi changed tack. "It's not about the money, it's about the fact that Arrington said I stole, killed someone and threatened to kill someone else. I've never had recourse. Every time I walk into the room, people know about it. Every time I go to a meeting they've Googled me and the second result is Techcrunch."
"But if you lose it'll be the first result as well."
"I know, and Arrington will be the cat who got the double cream, but that's the risk I'm taking."
If I were a proper reporter, I'd have moved on with my questions, kept myself out of the story. But I'm not, so I didn't. You see, as anyone who has read my – ahem – book will know, I've been in Sam's position – sort of; a notch more mental, perhaps. I've been fired from two businesses I've started, I've lied to business partners to buy time while waiting for money, I've found myself getting more and more out of my depth, and I've kept on swimming towards the rocks. I understand as well as anyone the madness that can grip you.
"But the difference between you and me, Sam, is that when my house of cards collapsed a couple of years back, I wrote a 250 page literary mea culpa taking the blame for basically everything. Since then, I've tried to be honest about my failings – my column is called Not Safe For Work, for Christ's sake – and it's paid dividends in terms of rehabilitation. People will allow you to make the biggest mistakes you can imagine if you show you've learned from them."
"But I don't have that platform," Sam argued. "Nothing I can say can compete with Arrington's huge network."
"Then, in your position, I'd have written the mea culpa for Techcrunch," I said. "Hell, Arrington would have published it."
And then: "Look, it doesn't matter what I do, I'm the notorious Sam Sethi. This is my last chance. There's nothing left for me to lose."
Youch. Now, I don't care how much you dislike Sethi; how much you disbelieve his version of events. On a basic human level, those are hard words to hear a man say. And when he said them he didn't sound cocky – he sounded determined, but somehow broken.
The story only went public this week, so it's far too early for me or anyone to say who is right and who is wrong – not least because that's the job of the court, if it gets that far. All I know is that I genuinely can't wait to see how this plays out. I mean, my spiritual home is London but I live in San Francisco. I'm a journalist who writes about tech. I know both Arrington and Sethi personally. I've made business decisions so bad that Sethi would doff his cap to me. And most importantly of all, I love love love it when London-based entrepreneurs decided to take on the mighty Silicon Valley establishment, especially when, really, the Silicon Valley establishment couldn't give a damn. As such this is the story I was born to cover. And cover it I will – every last painful detail, every letter, every utterance; every fact and fiction.
The only slight catch is that, as I wrote those last words, a message arrived in my inbox from my editor, reminding me of the huge potential risk to the Guardian of one of their columnists wading in on a libel case. And he's right; a woman with osteoporosis might as well punch a swan. But at the same time, I've got emails and calls in with sources on all sides, I've got information and rumours on the case that will make you laugh and cry ... and as for the stuff on deep background – holy shit. I've got a ringside seat in what what may be the least important transatlantic spat of web 2.0, but might very well be the most ridiculous.
So, what the hell. If the Guardian won't let me run it, I'm taking it to the blogosphere. From now until the end of the case, for good or ill, paulcarr.com is your official source of Sethi vs Techcrunch news and my Twitter feed is the story's CNN ticker. The stage is set! The clouds are gathering! Grab the popcorn! And release the lawyers!
Paul Carr is author of Bringing Nothing To The Party: True Confessions Of A New Media Whore. He blogs at paulcarr.com and is @paulcarr on Twitter.
Good news, London! Later this week, the "traveling geeks" arrive in the capital. Comprising some of Silicon Valley's most influential tech bloggers Sarah 2.0, JD Lasica, Robert 'Bloody' Scoble and Sarah Austin to name a few the geeks will be touring the capital (and Cambridge), meeting British entrepreneurs and sharing their inside knowledge about all things Silicon Valley.
For us lucky Brits this represents a unique opportunity an opportunity to complain loudly that we don't need a bunch of soi-disant social media rock stars coming over here and telling us how to run our industry. And then, after that, an opportunity to skulk off to the pub and mutter quietly among ourselves about what London needs to do to become as cool and successful as Silicon Valley.Continue reading...