Now what?

Is Silicon Valley a meritocracy or rigged by insiders? Yes.

The other day something obvious (to some) and shocking (to others) happened. Mike Arrington “updated his investment philosophy“…which is to say that he decided his interests were no longer conflicted, and he was going to more openly invest in companies that he and his staff were covering on Techcrunch.

No surprise right? Arrington’s had a buddy-buddy relationship with lots of founders/companies that have received coverage on Techcrunch, so it makes sense that he’d invest in the people he knows best.

But other journalists are up in arms (or jealous?), calling it a “bombshell”. Traditional media people have known not to go near conflict of interest situations, for many good reasons, and they’re surprised/upset that Techcrunch seems to just walk right through the imaginary hurdles in place. 

Alas, Techcrunch (and specifically Arrington) have never (admittedly) played by the traditional rules - which should have been obvious the first time TC reported on “off the record” incidents.

Here’s the thing about the Valley, it’s both a meritocracy and a good ole boys network. Unknown engineers can burst onto the scene becoming billionaires and insiders can abuse their personal relationships to make similarly-sized piles of money via early access to investment opportunities (only it’s not called insider trading because so few of today’s dot coms go public anymore).

It’s inspiring and depressing to be an outsider looking in.

To know that with the right breaks you can enter a world where everyone’s friends with people who are funded by famous VCs, who then help to get you funding, which leads to press, and then attention, and then popularity, which leads to more growth and more funding.

Or with the wrong ones seemingly identical ideas surpass your own, leaving you scratching your head wondering why some startups take off like a rocket while yours struggles to stay above water.

Nobody said life is fair, and the same goes for Silicon Valley. All people in the startup game ask for is an unfair advantage.