This morning TechCrunch posted an interesting article on the strange odyssey of Red Herring (the brand), and its current owner, Frenchman Alex Vieux (pictured above), since RH was sold to Vieux by Tony Perkins, back in 2003. Tony Perkins and Red Herring were Silicon Valley phenoms back in the 1990’s, so the blog post caught my eye.
This story has a local angle. A startup here that was recently “parked,” also apparently won a Red Herring award a few years back. I was intrigued at that time, because I was intimately familiar with Red Herring from its founder, Tony Perkins, and its heyday in Silicon Valley in the 1990’s. The magazine had a SV buzz about it, and everyone wanted to be on Tony Perkin’s radar. Without a doubt, the Red Herring brand was “Tony Perkins” personally. Perkins was the “go to” industry expert and spokesperson for the Valley, startups and venture capital. He appeared regularly on PBS Nightly Business Report and many other media outlets. He was pursued for “sound bytes” on the major computer and software industry players by the Wall Street Journal, and the New York Times. Tony could regularly be seen holding court over dinner at the trendy San Francisco Vietnamese restaurant, Le Colonial, and other well known Silicon Valley watering holes like Il Fornaio. All the Silicon Valley and San Francisco VC’s knew and adored Tony Perkins for the value and aura he brought to their business. Tony Perkins “was” Red Herring, and I think everyone who knew Tony would agree with that.
Around 2003, so the story goes, Perkin’s asked his teenage daughter her opinion on Red Herring and she replied that it was “SO 1990’s!” So Perkins sold the Red Herring brand to Alex Vieux. With Perkins out of the picture, RH almost immediately began having difficulties. With the dot com bubble bursting, the magazine ceased publication in 2003 but was re-launched in late 2004 under publisher (and now chairman) Alex Vieux and editor-in-chief Joel Dreyfuss, but it again ceased print publication in 2007. It had an online-only magazine until 2011 – today it has a skeleton editorial product with ‘news’ going up barely three times a week. However it continues to run the Red Herring 100 technology startup awards, which occur annually in Europe (Amsterdam), North America (Monterey) and Asia (in Vietnam). These days the global Red Herring operation is run from a trendy office suite in chic La Jolla, California, near San Diego. Vieux is a former Le Monde journalist and launched the now defunct ETRE technology investment conference with fellow US journalists in 1990.
The TechCrunch article goes on to say that it has received numerous complaints about the way Vieux and Red Herring operate the Red Herring 100 Awards. The base complaint was that it was a “pay for play” process. Apparently, many small companies did not initiate the contact with Red Herring. Companies were “cold-called” by RH and told that they were finalists in the RH competition and only then advised that there was a $3000 fee to participate further. It should be noted that in the article Mr. Vieux and his supporters vigorously deny allegations that they “take advantage of startups.” A similar business model has operated here in the Okanagan. A small company is contacted by a local business journal, and told they would like to do an article about the company. However, in the course of the conversation it turns out that the caller is a salesperson and not a journalist. The offer of an article, to be ghost written by an unnamed stringer, is contingent on either direct payment to the journal, or attracting a significant number of the companies vendors or customers to advertise in the journal, or both.
So TechCrunch asked Vieux a point blank question: If a startup that is selected for the Red Herring 100 does not pay the $3,000 to attend, can it still win the awards and appear in the Top 100 listing? They also asked him to provide examples from the past where this had happened.
At the time of publication of the article above, Mr. Vieux had not responded to TechCrunch’s question.
The lesson from all of this for entrepreneurial startups is that the “entrepreneurship market” has matured to the point that entrepreneurs regrettably need to be extremely cautious in dealings with anyone they do not know, or have not been referred to them by reputable, trusted mentors or colleagues.