$300 CrunchPad is no more, legal mess all that remains

$300 CrunchPad is no more, legal mess all that remains

Summary: After nearly a year and a half of planning, preparation and work, TechCrunch's CrunchPad is no more. In fact, all that remains of the project is a big legal mess.


After nearly a year and a half of planning, preparation and work, TechCrunch's CrunchPad is no more. In fact, all that remains of the project is a big legal mess.

Michael Arrington explains all:

Our plan was to debut the CrunchPad on stage at the Real-Time Crunchup event on November 20, a little over a week ago. We even hoped to have devices hacked together with Google Chrome OS and Windows 7 to show people that you could hack this thing to run just about anything you want. We’d put 1,000 of the devices on pre-sale and take orders immediately. Larger scale production would begin early in 2010.

So, what was behind the death of the CrunchPad? It seems it fell foul of the three horsemen on tech projects:

And then the entire project self destructed over nothing more than greed, jealousy and miscommunication.

On November 17, our deadline date for greenlighting the debut three days later, the CEO of our partner on the project, Chandra Rathakrishnan, sent me an email with the subject “no good news.” Yuck, I thought. Another delay, probably with the screen that had been giving us so much trouble – capacitive touch at 12 inches isn’t trivial. And sure enough, the email started off with “no good news to update. updated hardware is still on its way , so that’s a timing issue. friday will be a challenge now.”

But the email went on. Bizarrely, we were being notified that we were no longer involved with the project. Our project. Chandra said that based on pressure from his shareholders he had decided to move forward and sell the device directly through Fusion Garage, without our involvement.

Err, what? This is the equivalent of Foxconn, who build the iPhone, notifiying Apple a couple of days before launch that they’d be moving ahead and selling the iPhone directly without any involvement from Apple.

Chandra also forwarded an internal email from one of his shareholders. My favorite part of the email: “We still acknowledge that Arrington and TechCrunch bring some value to your business endeavor…If he agrees to our terms, we would have Arrington assume the role of visionary/evangelist/marketing head and Fusion Garage would acquire the rights to use the Crunchpad brand and name. Personally, I don’t think the name is all that important but you seem to be somewhat attached to the name.”

The reason for the meltdown seems obvious ... the project was a joint venture rather, and history is littered with the corpses of dead joint ventures. I'm not surprised the CrunchPad never saw light of day. It was an ambitious project. In fact, I'm surprised the project got as far as it did. Shame it had to collapse at the final hurdle.

All that's left is the legal mess:

Ultimately there are two sides to every story, and they’ll certainly have their side. We will almost certainly be filing multiple lawsuits against Fusion Garage, and possibly Chandra and his shareholders as individuals, shortly. The legal system will work it all out over time.

Guess the market is now wide open for Apple's digital unicorn tablet.

Topics: Banking, Collaboration

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  • Cold blooded Fusion Garage - boycott time

    I have followed the CrunchPad development from very early on, long before Fusion Garage got involved. I can't imagine that there is ANY way they can justify coming onto a project long after it started and then stealing it to produce on their own. Those cold-blooded a-holes deserve to die a thousand horrible deaths and I will NEVER buy anything from them.
    • not the first time

      i feel for Arrington but unfortunately he should have lawyered up a little more. he obviously got caught with his pants down and there are ALWAYS people waiting to take advantage of that. i hate that it's that way but it's business
  • RE: $300 CrunchPad is no more, legal mess all that remains

    No ability to interview the other side(s)?

    This is the 4th or 5th story that parrots the same information; yet they are all purported to be from different "news" sources.

    Does no one dial thier phone anymore? How about email or ~gasp~ letters?

    Does anyone have industry contacts?

    What happend to reporting to get the new, rahter than blogging for a paycheck?

    • Get a clue and buy a vowel...

      Reporters investigate and create stories and bloggers blog... If you want to whine about reporting, then go read a news site and not a blog...
      • He is right everyone copying techcrunch blog

        Instead of reporting new facts every site just copy and paste parts from Techcrunch blog.
  • RE: $300 CrunchPad is no more, legal mess all that remains

    Seems to be no more than egos. Sad. At $300 I was looking forward to trying one.

    Mark Levison
    <a href="http://theagileconsortium.com/" target="_blank">The Agile Consortium</a>
  • This bit doesn't make sense ...

    Arrington wrote:
    [i]"So this isn?t really about money. It was about the thrill of building something with a team that had the same vision."[/i]

    Why would investors give their money to Fusion Garage if there was no plan to get it back with profit? That's what an investor does. How could Arrington hope to build a business selling a product he didn't care about making money on? I would be interested to hear the other side of this story.

    It's a shame, because this looked like it was going to be a cool product ...
  • Shareholders?

    I think the real question is who are the so-called shareholders? Perhaps it is Apple or another competitor trying to eliminate this low-cost, low-profit device, so they can make their over-priced and high-profit version?
    • Me no think it's 'shareholders'...

      Look out there in the real world. A young entity comes up with
      a great idea and tries to make a go of it. The costs start to rise
      and they need help, so they put a call out for investors or a
      partnership to help cover the costs... and the 'partner' takes
      over the game, almost literally forcing the original entity out of
      the house. In this case, it means that when the original entity
      got kicked out, they took their toy with them.

      Maybe they'll get another chance and they'll keep tighter
      control over the process. I really hope so. A solid competitor
      for Apple's supposed tablet would be very helpful in keeping
      Apple honest.
    • I think you stumbled on the answer...

      ...without realizing it.

      [i]Perhaps it is Apple or another competitor trying to eliminate this low-cost, [b]low-profit[/b] device, so they can make their over-priced and [b]high-profit[/b] version?[/i]

      When have share-holders ever wanted to make a [i]low[/i]-profit version of [i]anything[/i]? That's not the way responsible businesspeople behave.

      I'm not saying that there's no place for altruism in this world. Far from it. But if you want to run a non-profit, that's what you do. Expecting share-holders not to be in it for the profit is a little...kooky.
  • I don't think it failed because it was a joint venture.

    I think it failed because there wasn't a common vision. If the investors really cared about the project as it was, they wouldn't have tried to take it away from the people who birthed it.

    On the other hand, the Crunchpad never really seemed like a particularly good idea to begin with. A tablet that does nothing but access the Web doesn't sound particularly useful. Cell phones can do that well enough already.
  • RE: $300 CrunchPad is no more, legal mess all that remains

    Let me just say....

    Couldn't have happened to someone who deserved it more
    than Michael Arrington.
    Loverock Davidson
  • i expected this

    When i gave arrington the idea of an open sourced touchpad (multi-touch) that was cheap and just intended to read pdf's and html (no prop format please) i fully expected what has happened to happen. I guess i shoulda warned him, but hey there is a special place in hell for those that... anyway. The real question to ask is who are the 'shareholders' Let me guess? heh - MS has a huge stake in multitouch, Natal and the 'surface' (all ideas i gave *them* too - well not really gave, just mentioned unwisely and researched unwisely in the wrong newsgroups and forums - never ever research original stuff directly on the web - your IP will disappear faster than winter. Did i also mention that i gave them [yes gave this time] aerosnap and jump lists and semantic pivots... because i did, but it will be warm day in hell before i get any credit eh?)
    (oh, and i also sent a begging email into ASUS asking for small light power efficient 'netbooks' to read PDF's etc. I even suggested a name - yes 'eeepc' . And a lot of thanks i got for that too...

    And i could go on and on and on.)

    so suck shizzles arrington and co. You see the really nice thing about being the originator of the IP is that you get a peerless vision of not just the pro's, but the con's too.

    Ahhh, if only they had asked! And it will only get worse as they try to make money from things they don't really comprehend.

    So suck shizzles -no really, you *deserve* it

    • And I invented the Internet...

  • RE: $300 CrunchPad is no more, legal mess all that remains

    this is why enterprise formation gets done as an enterprise, not as a project, not as "it would be cool if" and not with anonymous "shareholders" who have voice but no names.
    brands get built as brands.
    that 3rd horseman, miscommunication.. isn't really there. he just gets the blame when greed and ego are on the loose.
    gabriel bear
    • You know, in a very real sense, this is what happened to Apple...

      ... back in 1982. The only difference is, Apple had real products
      already on the market when the "Investors" kicked Steve Jobs out
      and screwed the whole thing over.
  • Doesn't sound like a 'joint venture' - bad legal docs

    Well, there are usually performance standards in a JV agreement
    that allow one party to terminate, but not to keep the other
    partner's IP. Sounds like the standard "founders-get-the-broom"
    story, i.e., they didn't have good legal documents, they knowingly
    signed bad legal documents to get the money, they didn't
    negotiate, they didn't have the right lawyer, etc. 90% of tragic
    endings like this have to do with so-called "take it or leave it" legal
    terms that are really negotiable. Too bad.

    Carol Ruth Shepherd, Attorney
    Arborlaw PLC
    Ann Arbor, MI