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Arrington's CrunchPad Dies
adeelarshad82 writes "Michael Arrington announced the death of the CrunchPad on Monday morning in a blog post heavily spiced with angst and drama. According to Arrington, the Crunchpad, a 12-inch Web tablet expected to be priced at about $300, was just days away from launch. At the last minute, however, Arrington received an email from Chandra Rathakrishnan, the chief executive of manufacturing partner Fusion Garage, apparently trying to cut Arrington out of the product on the eve of the launch. Fusion Garage, according to Arrington, wanted to market the device itself under its own name; which obviously was the deal breaker. Arrington claims that the company had overcome obstacles at every stage in the business such as deals with Intel, retail launch, securing venture capital and angel investments. Interesting bit is that some were already speculating that the Crunchpad was not real."
Unless they rework everything that touches the co-owned intellectual property, there is no way Fusion Garage can legally ship anything. Arrington said as much and stated that a lawsuit would be waiting for Fusion Garage should they attempt to ship anything without CrunchPad's approval.
This is pretty run-of-the-mill back stabbing in OEM/ODM business.
1. The manufacturer sees an opportunity with a weak 'partner'
2. Screws the partner.
3. Profit!
The thing is 'Fusion Garage' would have screwed him even if they worked a geographic restrictions deal out. If there was any meaningful market acceptance, any number of bigger OEM's would have taken their lunch in ~24 months.
Sad it has to go like this, but this very common unless you are an HP/Apple/Dell. Typical chicken-egg capitalism problem.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
I'm guessing you've never started a company. When you do, you'll find out that a fair number of your friends turn into psychopaths when money is involved. This is why the best number of partners in any new venture is 1. I got screwed by AMIS in a somewhat similar situation. We co-developed the Express Array using our technology from cell design to routing. The first chip came out and worked 8 months after we started this very aggressive project. The day the chip worked, AMIS basically said "we don't need you anymore. Fuck off and die now." For AMIS, the entire project was delayed a year. It was incredible, unexplainable stupidity. And yet, it's an entirely common story.
Celebrate failure, and then learn from it - Nolan Bushnell
I was just going to post something to the same effect. A good friend of mine was pushed out of his company by his partner, board, and angel investors when his invention was close to launch. Another friend turned evil on me when our own start-up company was approached about acquisition. Even though we were 50-50 partners, I still feel like I got shafted. And every slashdot reader knows that Windows is dominant not because of its technical merits, but because of legal -- and illegal -- bullying. Screw or be screwed seems to be the name of the game. Sometimes it seems the only way to win is not to play.