Breaking: Blognation is Shutting Down – Sam Sethi Blames Arrington Sorta

Update:  Mike Arrington posted a long and detailed post on the truth about Sam Sethi.   Mike gives his personal account based upon months of working with Sam but also weaves in his view on the overall community obligation not to tolerate unethical behavior.  Starting and building a company takes guts and skills.  Blaming any one person or organization is wrong.  The lead entrepreneur is responsible and has to accept the ‘bill’ for the outcome – period.  I continue to believe that the Blognation mission was a good one and had good editors people but the entrepreneurial team and startup execution was flawed.  I hope that Blognation as a idea and venture doesn’t stay in the deadpool.     

—- original post —

In his last post as CEO of Blognation Sam Sethi tells his side of the story and hints of legal action against Mike Arrington.  I’ve been only following this story since the post about Sam’s unethical behavior as reported by Techcrucnch.  I never met Sam but Scoble spoke highly of him and blognation.  I’m really curious to what really happened. 

Sam tells us that blognation is going up for auction.  It would be a great buy for someone because they have good people blogging over there.  

Some of Sam’s tidbits in his final post.. “Ever since blognation was launched in July, Arrington has wanted to write the post – “blognation enters the deadpool”. Last week he nearly got his wish?” …”For the last 6 months Arrington has threatened to publish, private and confidential emails that were sent to him, knowing it would create fear uncertainty and doubt (FUD) around blognation within the angel/VC community, whether the content was factual or not! The merest whif of litigation whether true or not caused our the potential investors to run for the hills back in July….”

Here’s Sethi’s shot at Arrington..”Arrington had made it very clear that he would withhold this information from the public domain but like the Sword of Damocles he would use this information at the right time.”…”Finally last week we had got the funding termsheet on the table, some 3-4 months later than planned but we were ready to sign on 10th December yet Arrington chose to publish a stolen confidential term sheet which scuppered the deal for blognation and ALL of the remaining editors at the 23rd hour. …”Arrington knew very well what effect publishing the termsheet would have on any potential deal and thus the future of blognation. “….”Right now Arrington is the only person who knows who stole and gave him the confidential termsheet. Arrington is the only person who knows why he chose to publish it knowing that it would cause maximum embarrassment to the VC and potentially force them to withdraw the offer. “

Sam’s Threat:  Well the matter has now been reported to Scotland Yard’s Internet Crime Unit : Case Number

I hope that blognation’s editors can keep blogging and get paid.

Author: John

Entrepreneur living in Palo Alto California and the Founder of SiliconANGLE Media

27 thoughts on “Breaking: Blognation is Shutting Down – Sam Sethi Blames Arrington Sorta”

  1. It is sad Blognation is shutting down. It was a great concept. In fact, I was so bought into this idea that I pitched Sam for a separate open source section. I offered to write about open source topics. Unfortunately, the whole thing melted down real fast. It is a great concept and if a person like you can resurrect this concept, it will be amazing. Make an attempt John.

  2. Scott: I’d be curious to what they see as the value in terms of numbers. I see value in the franchise but the execution has to be adjusted immediately to get break even. Throw an event and your off to the races. Events provide the cash flow to get it going.

    Anne: Mike should put his M&A ace on this (heather) because the combination of blognation and say Scoble would be huge winfall for Mike and TechCrunch. I’d do that if I was Mike. Hell if I was the CEO of PodTech I’d buy them right away. One of the things PodTech missed was blogging.

    Anne: do you know who of the team there is left to run it?

  3. John,
    I just linked to you because I love you. Valleywag isn’t paying me anything so I’d love to work for blognation.

    Come by to Providence anytime. I live on the non-Italian side. I’d love to host you as my guest.

  4. John,
    I think that someone should take over the blognation plan. The problem is that you have liabilities that Sam created. They have some good bloggers writing. You would have to change things radically. I’m glad that somone can see the opportunity there. It’s been a problem without money.

    I don’t think the company is viable with all the liabilities. If you can get those solved then you have a great opportunity. I just attended Le Web and I think that it has merit if you can pull it off.

  5. Thanks Ivan. The value is in the domain name and core writers there now who have worked hard to get established.

    Drew: I agree with you that an automated and editorial site would be great. Dave Winer is an idea machine. He should start a VC firm.

  6. John the vision doesn’t work as a business unless you don’t pay the writers. Try selling ad revenue against an audiences segmented across 13 countries, with a small audience in each, and you will find that the inventory value is very low.

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