Uncrunched

In November I wrote about a New York Times article trashing Zynga that appeared to have been spoon fed to them by rival Electronic Arts.

I particularly remember the quotes by EA’s head of human resources Gabrielle Toledano, including this one: “I expect a lot of game and tech companies will begin recruiting Zynga’s talent after their equity becomes liquid.” And that ridiculous quote by venture capitalist Roger McNamee saying that Zynga would end up a cautionary tale, without any mention that McNamee is friends and a former business partner with the EA CEO.

Well, Zynga’s public now, and their equity is pretty liquid. But so far I haven’t seen too many departures. Or any. But I did notice Zynga picked up yet another EA executive today. Barry Cottle, formerly EVP of EA Interactive and now EVP Business and Corporate Development at Zynga.

Perusing the Zynga executive team page, the company now appears to have six former EA execs on board. In addition to Cottle, there’s Colleen McCreary, Jeff Karp, John Schappert, Mike Verdu and Steve Chiang. Counting Cottle, six of the eleven members of the Zynga executive team were former EA execs.

This isn’t to pile on EA – they’re still a strong company and a little competition is always good for the soul. But the New York Times shouldn’t be so quick, next time, to believe everything that’s thrown at them. Particularly when it’s a competitor doing the throwing.

Has anyone on the EA executive team not sent their resume to Zynga at this point? That’s a question I’d love to know the answer to.

Image Credit: NY Times artist rendering of Mark Pincus in what sources from EA tell them is his true form. It definitely wasn’t something I just drew.

My CrunchFund partner and long time colleague MG Siegler is having what appears to be a multi-day seizure over Google’s unsurprising move to integrate Google+ social results into Google search. Says Siegler: “Google is almost asking for an inquiry into potentially anti-competitive practices (and it’s coming). Which is insane.”

No, not insane.

Anyone with a passing interest in U.S. antitrust law knows that the government is theoretically good at punishing companies that engage in anti-competitive behavior, such as leveraging market control in one product to help another product compete. But the government is terrible at preventing these actions from happening, unless you think the threat of eventual punishment is enough to deter it. It isn’t.

In the 90’s Microsoft went from dismissing the Internet entirely to putting Netscape out of business. By the time settlements were reached in 2001 and later, Netscape was just a nice memory for most of us. Everyone, and that means everyone, was using Internet Explorer. See my long video interview with the antitrust attorney, Gary Reback, the man who spearheaded the push to break up Microsoft in the nineties, here.

Microsoft survived. Netscape didn’t. And the government couldn’t do anything at all to stop that.

Today, Google search is Microsoft Windows and Office. And Facebook is as much of a threat to Google as Netscape was to Microsoft.

Of course Google is going to do anything it can to survive. Facebook data is already integrated into Bing, and Twitter’s using the “don’t give the milk for free when you can make them buy the cow” strategy by withholding its own data from Google (look for my upcoming post on why Google will eventually realize that they must acquire Twitter at any cost). That’s a dark place for Google to be.

On a much smaller scale Google has been up to this for ages (see my April Fools post last year about Google Places). Now they’re trying to put off the Age of Facebook. The only chance they have is to use their commanding lead in search to do that.

Will the government come along and knock some heads together in a few years? Maybe. But this is a much more nuanced situation that Microsoft’s execution of Netscape. That could take years and years, and the government may question Facebook’s willingness to throw data to their shareholder Microsoft while withholding it from Google (see John Battelle’s post for some color on that).

But what the government does or doesn’t do years down the road is of little concern for a company fighting to stay at the top. It’s so much less important as to not even be part of the decision making process. So get used to Google+ in your search stream, it’s here to stay.

Last month Fusion Garage, a Singapore startup that has defrauded just about everyone and everything it has come in contact with, had a huge flameout when they were publicly fired by both their law firm and PR firm.

Since then, not a word. Except for a “gosh, everything’s just fine” “interview” by Engadget, which failed to grasp the seriousness of the situation. (Engadget has a history of loving everything Fusion Garage – my favorite quotes are from this 2009 interview where they said “Seriously, we were quite impressed [with the device]”). For the record, documents obtained via our lawsuit with the company showed that a total of 93 of those impressive little devices were ever sold.

Anyhow, Business Insider reports that the jig is up, and nothing Engadget or the Verge can do can save the company any longer from creditors. Did you buy a device and are still waiting for it to be shipped? Line up with $40 million in other creditors to get your refund.

CEO Chandresekar Rathakrishnan isn’t done yet, though. Here’s an interesting tweet from someone who worked for the company, noting that a new company is being formed: “I’m amazed about how badly a company can screw up, I can’t imagine that many people will be left once the new company is formed.”

In case it isn’t crystal clear, it looks like Fusion Garage is trying to get out of all that pesky debt, take as many employees as possible, and start a new company. This is what lawyers call fraud, which is exactly what I’ve been screaming for two years now.

It is the responsibility of the press to point out evil when they see it. Not just sweep it under the rug because one of their competitors (in this case, TechCrunch) were the ones being attacked. Some readers (thankfully very few) bought these devices based on these absurd reviews. There’s no excuse for that.

In the end, the press got played badly by Rathakrishnan. In litigation discovery it became clear that he, working with his PR firm, timed the fraud in anticipation of us screaming murder, hoping that other press would love the drama and immediately make him the hero. The only thing they got wrong was that they thought we wouldn’t sue. We did. And it’s over.

I got up early today to watch the debut of the new Charlie Rose CBS morning show. The first thing I do every morning is drink a cup of coffee, but I really needed it this morning when I crawled out of bed at 6:30.

When I’m in San Francisco I usually get coffee at Philz because it’s the closest thing to perfect coffee that I’ve ever had, and it’s near where I stay when I’m there. But when I’m at home in Seattle I do it myself.

I tend to get a bit manic about certain things (like blogging, and making coffee). The last few years I’ve experimented with a dozen or so different ways to brew a perfect cup. A standard Mr. Coffee (which makes a surprisingly good cup of coffee if you do it right). The French Press (near perfect but too easy to create a bitter brew). I’ve even tried the crazier stuff out there like the AeroPress, which does make great coffee but ends up being too complicated and time consuming for me.

The last six months or so I’ve settled on what I think is the perfect brewing process. It’s easy, has very little cleanup and it’s hard to screw up.

Step one: Coffee. I like Peet’s House Blend, but there are lots of great coffees out there. I often end up buying Starbucks Breakfast blend since it’s easier to find up here in Seattle. Some people like a darker roast, but I prefer the higher caffeine kick from a lighter roast coffee.

Step two: Grind that coffee. You need a proper burr grinder if you want to avoid a bitter cup of coffee. Trust me. The problem is you can spend an almost unlimited amount of money on a good burr grinder. I chose a relatively inexpensive Bodum grinder that I’ve been very happy with. For a single cup of coffee I grind it very coarse to avoid bitterness for about 8 seconds.

Step Three: Hot water. Seems simple but I don’t like spending time with a kettle or the microwave. Instead I bought a Zojirushi Hybrid Water Boiler (Jack Dorsey talked me into this a year ago). I have hot water on tap all the time at 195 degrees, although there are three temperature settings to choose from.

Step Four: Brew. Since you’re using a burr grinder it’s going to be hard to screw the coffee up at this point. A cheap drip coffee maker is going to be just fine. But I use a Chemex glass coffee carafe. No mechanical parts, it will last as long as you don’t drop it. Just put a filter in with the coffee and add water from the Zojirushi boiler. I fill the filter up twice, using a spoon to get the coffee back into the water the second time since it sticks to the side of the filter.

Step Five: This whole procedure has taken you about 1 minute, most of that is waiting for the coffee to drip. Pour, drink, be happy.

Hah. Although it’s Cliff, not Norm.

A year ago Steven Levy suggested that Facebook should give us each a single “friend-list do-over.”

A lot of commenters challenged him. “Grow some balls and just unfriend people,” said one of the more even tempered readers. Another – “These comments are too constructive. Someone should just call this guy an idiot.”

Steven probably didn’t see that criticism coming, because he probably assumed people understand how difficult it is to unfriend people on Facebook at any sort of scale. You have to find the person, hover over the friend button, select unfriend and then click a confirmation.

That’s a few seconds, and when you are trying to remove hundreds, or thousands, or people you don’t know as friends, that takes Too Long. And so the friends stay, for the same reason that every clock in my house is off by an hour for half the year.

So, no, most of us aren’t going to spend the time removing friends on Facebook. Instead many of us are using new social networks, like Path (we’re an investor) and the upcoming Just.Me (we’re also investors, guess how much we like this space) to start fresh. Facebook is for thousands of people you don’t know. The start fresh new services can be finely crafted from the start to include only your actual friends. And they’re made for mobile. Update: Check out Ourspot as well.

Path and others are giving us what we want – A nice, sophisticated and diverse conversation with friends, like sitting together at a table just laughing and talking and drinking a latte. Facebook is more like the top picture above. Chaos.

I don’t like sweater vests, but I’ll take them over hordes of strangers yelling at me any day. I can politely ask that guy to take off that stupid vest anyway. Then everything would be perfect, really.

Sure, lots of people say this is our own fault for showing zero restraint on adding friends over the years. But what seemed like a fun “sure why not, this is adventurous!” in 2006 and 2007 when Facebook allowed open registrations now feels like a bad hangover.

Anyhow, Facebook today is so crowded and messy that no one ever goes there anymore. Or at least that’s what I imagine Yogi Berra would say.

So Facebook, I ask you. Give us the Steven Levy do-over. Or give it a Jack Welch twist and auto suggest we unfriend the 10% of our Facebook friends that we interact with the least once a year. Or both.

I promise, cross my heart and pinky swear, I’ll be more restrained and focused this time. I’ll realize the long term consequences of my more hasty why the hell not click yes decisions, and I won’t repeat my past sin of not saying “no” more often.

Ok, I may repeat past sins. But you can just let me start fresh again next year, right? That wouldn’t be so bad. I could live with that.

Because if you don’t, eventually Facebookers may not wanna come over to the site since it’s so crowded, and no one can stop ’em. You can observe a lot just by watching. Facebook is 90% mental, but the other half is making me insane.

You’ve come to a fork in the road, Facebook, and you should take it.

Thanks Yogi.

How much is the loss of key female talent costing your organization, Arianna? This much.

He’s about as good as most tech writers at reviewing a phone, so why not.

I’ve been following the developments around the Stop Online Piracy Act (SOPA) making its way through Congress with the same trepidation that I’ve followed previous governmental tech blunders, wondering if this time they’ll piss in the flowerbed enough to kill all the flowers.

I was very happy to see Joshua Kopstein’s Dear Congress, It’s No Longer OK To Not Know How The Internet Works post last week calling out congress as a whole, and individual elected officials, on their ridiculous tendency to use their tech ignorance as some sort of badge of honor. The facts don’t matter, they seem to almost be literally saying. The unspoken words are, all that matters is the money, which flows from Hollywood. Protect the IP, no matter what the cost.

Today though Clay Johnson writes a rebuttal to Kopstein’s post, saying the opposite – Dear Internet: It’s No Longer OK to Not Know How Congress Works.

His argument is that Silicon Valley has to start playing by the rules if they expect to get what they want from our government. It’s a balanced argument, not simply pro-government. But I think it sparks a dangerous idea – that we need to play ball or else.

It’s the libertarian in me (or the fact that I’ve been mesmerized by Starz show Boss these last few months), but all I see in Washington DC are a bunch of elected thugs with various overlapping crime rings beneath them. Their job is to get reelected and gain power, not help the country or do what’s right. Unless you have a lot of money and are willing to spend it lobbying, you’re going to lose your fight no matter how righteous your position.

In Johnson’s world, congress gives a damn: “The truth is that Congress would much rather listen to its constituents than listen to lobbyists,” he says. Maybe he’s right, but I’ve yet to meet an elected official or bureaucrat who actually gave a damn. The profession just seems to attract a certain type of person, and that person wants to talk to the money, not to the people.

I’m not naive enough to think that will change any time soon. But I do hope that Silicon Valley doesn’t just give up and start playing the game, like Johnson suggests.

To some extent we already do play the game, of course. Companies banded together in the 90’s to push the government to rip apart Microsoft. Microsoft and Facebook do the same thing today with Google, and Google’s no slouch in the political arena itself.

But the young startups, the ones trying revolutionary new things that are often messy and usually piss off some big profitable industry. Those are the ones that can’t play the game and expect to survive. Startups must be nimble. They can’t spend time mucking around as some sort of coalition and trying to lobby and pay off the government. Nor can they spend the time educating our congress about how the Internet actually works.

Instead, they just build. Disrupt. Fail. Succeed.

I still believe what I wrote in June 2010, and I’ll still believe it in another ten years.

Silicon Valley has fueled much of the growth in our economy over the last few decades and has created amazing (and highly profitable) companies that are making the world a much better and more interesting place to live. All that happened while the government ignored us.

We don’t want handouts. We don’t want “public-private partnerships,” and we sure as hell don’t want legislation. Just let us do our thing and maybe say thanks to those companies that create jobs by the hundreds of thousands and send in those humongous corporate tax payments on profits. Because all you can do is screw up something beautiful. Really.

This is a special place (the tech world). Leave it alone and let it thrive. If we continue to ignore the huge value destroying game played in Washington DC we may continue to get hit hard over and over again. But if we start playing the game – as Johnson suggests – then a lot of what’s special about Silicon Valley will just vaporize away.

The Internet has already adapted. It’s time for Congress to do the same.

News broke yesterday that Fusion Garage was fired by its PR firm, its website is offline and customers are pissed off that they haven’t received their orders. This is the company that we worked with for a year on the CrunchPad project, and eventually defrauded us.

Here’s more – the law firm representing Fusion Garage in the lawsuit with us (well, now it’s with Aol), Quinn Emanuel, has requested permission from the court to withdraw as counsel. From the filing on December 13:

2. Quinn Emanuel seeks leave to withdraw as counsel of record for Defendant Fusion Garage PTE. Ltd. (“Fusion Garage”) because Fusion Garage’s non-payment of attorneys’ fees and associated costs and a breakdown of the attorney-client relationship have made it unreasonably difficult, if not impossible, for Quinn Emanuel to continue to adequately and properly represent Fusion Garage in this matter.
3. Fusion Garage has not paid Quinn Emanuel for services rendered and the costs associated with those services for several months. During that time, Quinn Emanuel has acted on behalf of Fusion Garage by seeking discovery from Plaintiffs, responding to written discovery propounded by Plaintiffs, conducting third party discovery (including a deposition of Keith Teare), engaging in lengthy and protracted settlement negotiations, and preparing a motion to compel that is scheduled to be heard on January 3, 2012, among other tasks that cannot be disclosed on grounds of privilege and work product.
4. Fusion Garage and Quinn Emanuel have had a breakdown in communication that Quinn Emanuel can more fully explain to the Court in camera if requested by the Court. The circumstances have placed Quinn Emanuel in a position where it can no longer provide effective representation to Fusion Garage.
5. On numerous occasions (at least on November 25, 2011, December 1, 2011, December 2, 2011, December 8, 2011, and December 12, 2011), I informed Fusion Garage either orally or in writing that Quinn Emanuel would resign as counsel for Fusion Garage and would seek leave of court to withdraw from this case, and that Fusion Garage needed to retain new counsel.

Fusion Garage finally destroying itself certainly makes me happy. The fact that Quinn Emanuel and PR firm McGrath Power, who advised Fusion Garage on the right way to execute on the fraud, are left with unpaid bills also makes me happy. I’m sorry to the customers who tried to pre-order these things and may never see their money again. But, really, what were you thinking?

I’ll write more about this later, and how this failed relationship fundamentally changed my thinking on business partnerships. But for now, just die Fusion Garage. And slink away in shame, because it sure doesn’t look like you’re going to end this the honorable way.