PandoDaily, Sarah Lacy's "TechCrunch 2.0" tech blog, launched today with a cast of familiar writers (Mike Arrington, MG Siegler, Paul Carr and Slate' Farhad Manjoo) and an impressive cast of VC backers. PandoDaily wants to focus on startup news, so the fact that it has received $2.5 million in funding from what looks like a who-is-who of Silicon Valley's top individual investors and major VC funds, feels like a massive conflict of interest.
Conflicts of Interest
Taking a line right out of the Mike Arrington playbook, Lacy notes that PandoDaily will "disclose everything" (which, by default, is impossible). She herself won't be making any investments, though, and neither will any of the newly-hired staff writers (the members of the CrunchFund team aren't official staff writers).
Lacy also argues that she isn't building the site to sell, which makes me wonder how the investors expect to make their money back. This is a huge group of backers ("Marc Andreessen, Peter Thiel, Tony Hseih, Zach Nelson, Andrew Anker, Chris Dixon, Saul Klein, Josh Kopelman, Jeff Jordan and Matt Cohler, all investing as individuals. Also investing are a handful of seed funds including the CrunchFund, Greylock Discovery Fund, Accel’s Seed Fund, Menlo Ventures Talent Fund, Lerer Ventures, SV Angels and Ooga Labs), so the individual investments were probably quite small. Lacy argues that the reason for this is that PandoDaily is "a news site built for the startup community, so the more of them that are a part of it, the better." As far as I can see, the startup investor community is nicely represented here, but I don't see any actual startups in her list.
Ryan Tate at Gawker calls the site a "mouthpiece" for the tech industry, arguing that the investors are basically buying themselves (and the startups they invest in) positive coverage (or coverage in the first place, which isn't easy to get for a new company either). The New York Times' David Carr calls it "VC stenography." Dan Lyons calls it "PanderDaily."
Embargo Policy: Just Give Us that Exclusive and It'll be Alright
Some would argue that the least said about embargoes, the better, but PandoDaily's policy strikes me as rather arrogant and, as a consequence, anti-startup: "We’ll honor any embargo to put a piece of relevant news in the PandoTicker. But if you want your news in the main blog, you have to give us something exclusive." The PandoTicker is a TechMeme-like newsticker in the site's sidebar. Stories there will surely get clicks, but the policy here is pretty clear: either you give us an exclusive, or covering your company isn't really worth our time.
The way this works in practice for a startup that looks for coverage is pretty simple these days: if another site got the exclusive, it's unlikely to be covered broadly on other sites unless it's a huge story that just can't be ignored. I'm not sure that's in the best interest of the startup ecosystem.
The startup ecosystem does indeed need some good blogs that focus on it in the way TC did in the early days. The problem for blogs – including mine here – is that those stories don't drive enough traffic. I hope PandoDaily will do well, but it will have to navigate some difficult waters if it doesn't want to fall into a trap that it set itself by linking itself so closely to the Silicon Valley VC world.