I find it funny that Reed Hasting's letter about splitting up Netflix's DVD-by mail and streaming services could have worked perfectly for AOL's decision to split up blogging and investing.
Courtesy of "find and replace" here is the letter Arrington would have written...
I messed up. I owe everyone an explanation.
It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of blogging and investing. That was certainly not our intent, and I offer my sincere apology. I’ll try to explain how this happened.
For the past five years, my greatest fear at Techcrunch has been that I wouldn't make the leap from success in blogging to success in investing. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (investing for me) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.
When Techcrunch is evolving rapidly, however, I needed to be extra-communicative. This is the key thing I got wrong.
In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our blogging, without doing much CEO communication. But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our readers of why we are separating blogging and investing. It wouldn’t have changed the decision, but it would have been the right thing to do.
So here is what we are doing and why:
Many readers love our blog, as I do, because we aim to be the news source of record for tech startups. We want to advertise the breadth of our incredible startup offerings so that as many people as possible know what exists, and it is a great option for those who want the huge and comprehensive selection of news coverage. Blogs may not last forever, but we want it to last as long as possible.
I also love investing in startups because it is integrated into my bank account. The benefits of investing are really quite different from the benefits of blogging. I feel we need to focus on rapid investment as technology and the market evolve, without having to maintain the impartiality of our blog.
So we realized that investing and blogging are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently. It’s hard for me to write this after over 10 years of blogging with pride, but we think it is necessary and best: In a few weeks, we will rename our blog to “Crunchster”.
We chose the name Crunchster because it refers to quick delivery. We will keep the name “Crunchfund” for investing.
Crunchster will be the same website and blog that everyone is used to. It is just a new name, and readers will go to crunchster.com to access their news. One improvement we will make at launch is to add video games coverage. Readers have been asking for video games for many years, and now that the blog has its own team, we are finally getting it done. Other improvements will follow. Another advantage of separate websites is simplicity for our readers. Each website will be focused on just one thing (blogging or investments) and will be even easier to use. A negative of the renaming and separation is that the Crunchster.com and Crunchfund.com websites will not be integrated. So if we highly rate or review a startup on Crunchster, it doesn’t show up in the Crunchfund portfolio, and vice-versa.
Erick Schonfeld, who has been working on our blog for years will be the Editor in Chief of Crunchster. We will let you know in a few weeks when the Crunchster.com website is up and ready. It is merely a renamed version of the Techcrunch blog, but with the addition of video games.
For me the Techcrunch website has always been a source of joy. The new website is still that distinctive green, but now it will have a Crunchster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be the same for many of you. We’ll also return to marketing our blog, with its amazing coverage, now with the Crunchster brand.
Some members will likely feel that we shouldn’t split the businesses, and that we shouldn’t rename our blog. Our view is with this split of the businesses, we will be better at investing, and we will be better at blogging. It is possible we are moving too fast – it is hard to say. But going forward, Crunchster will continue to run the best tech blogging service ever, throughout the United States. Crunchfund will offer the best investment fund for tech startups, hopefully on a global basis. The additional investments we have coming in the next few months is substantial, and we are always working to improve our portfolio further.
I want to acknowledge and thank our many readers that stuck with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.
Both the Crunchster and Crunchfund teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.