I think it depends on your goals as a startup, and where you are in your product development.
If you are very early and looking for capital or business partners, it's a GREAT audience. After being profiled on TechCrunch, we got a pile of job offers, calls from a mess of VCs, and a few acquisition calls. We got emails from several other companies in the job space who wanted to talk about how we could work together. We also got a pile of beta users who gave us some pretty good feedback.
But just because TechCrunch readers don't represent the mainstream doesn't mean that their attention isn't valuable. One thing to consider is the "trickle-down" effect of getting coverage on TechCrunch. As you say, the people who pay attention to TechCrunch are the early adopters. They are also (because of this) likely to blog, have a podcast, and have a mature network of contacts. Being featured on TechCrunch resulted in being featured in a mess of other blogs, newsletters, and magazines, which ultimately got us more attention from mainstream users.
One thing to also keep in mind is how to gather feedback. If you are a new service you will be lucky if those first 10, 50, 100 users even give feedback if you do not make it easy to do so and do not encourage it. They will just stop using your service, and even worse, spread the word that it sucks.
Its important to have a plan and method for gathering feedback and making it known to your beta test users.
I think that what you are describing is the difference between a public and a private beta testing period. Once a company opens its beta to the public than its goal should be to get as many press mentions as possible. Releasing a public beta to only a handful of users has all of the drawbacks and few of the upsides of publicity. One primary drawback is that the uber-alpha geeks who limited public betas target most likely includes competitors who are also seeking to capture the market, which gives them an opportunity to learn from your mistakes before you build defensibility through users and/or user generated content. Also, the limited public beta strategy may not be possible for bootsrapping companies that need capital.
I would also respectfully disagree with your statment that:
"[Entrepreneurs are] likely astute enough to figure out [feedback] even with a smaller sample size."
I only have subjective datapoints but my experiences tell me that many entrepreneurs are stubborn
and very reluctant to change without overwhelming evidence. I agree that successful entrepreneurs can read between the lines but the vast majority of startups fail.
Anyone intersted in the subject may be interested in my round up of the VCwriting on the subject.
Also, given your post and several others recently I may do a round up of non-VC voices on the TechCrunch's influence.
okay, my html skills suck here are the links:
Are Great Entrepreneurs Stubborn?
VC Buzz: Web 2.0 & TechCrunch Influence
I really agree with what this article says. When you launch a site, it is so tempting to try to get as much traffic as soon as possible. But the smarter and more disciplined approach is to get a few users and work out some kinks first.
I also agree with this article, especially depending on who you are targeting. All TechCrunch would do for us at the moment (given our target market -- NOT early adopters) would be to bring down our site for no good reason. We are doing exactly what Dharmesh outlined -- we're in public Beta, targeting only a few select resources for publicity, but specifically trying to stay under the radar until we're really ready to throw the doors open. And even then, it won't be to the TechCrunch crowd.
Wow, this has sure given me a lot to think about I am the lead developer of a new online web based p2p file sharing service called fileswire. Naturally I was going to anounce it at tech crunch but I think I may hold off a while now. You can find the service at <a href ="http://www.fileswire.com">www.fileswire.com<a/>