
Powa: The startup that fell to earth - dan1234
http://www.bbc.co.uk/news/technology-35860814
======
Twirrim
That article reveals a story that's one _facepalm_ after another. An example
of the worst "rockstar founder" attitude backed by apparently clueless
investors.

> Powa occupied two floors of the prestigious Heron Tower at the heart of the
> city of London, and had equally lavish accommodation in Hong Kong, New York
> and across Europe.

Before having established proper cash flow?! When all their "sales" were just
"letters of intent". How were investors even remotely convinced it was a good
deal?

> One of the more printable comments is this: "You don't employ intelligent,
> highly experienced people to treat them like something unpleasant under your
> shoe by telling them to forget everything they know, as your way isn't
> working"

I wonder what the staff turnover was like? The only time I worked for a CEO
who treated his employees with that little respect, they had a 90%/2 years
turnover. No one was prepared to stick around and support someone who would
send motivational emails saying "Ask not what your company can do for you, ask
what you can do for the company" as the CEO was screwing up sales deals. I
always wondered if he'd ever figure it out. Even burned my bridge there trying
to help him understand what was going on during the exit interview.

> According to several former employees, at one Christmas bash in Mayfair,
> strippers were hired to perform, to the discomfort of many present.

Grew up idolising the worst aspects of Yuppie culture?

> "While the company was going under, he's fooling around in a photography
> studio pretending to be Ziggy Stardust. The guy is a narcissistic idiot."

Certainly sounds like it...

~~~
rm_-rf_slash
Just curious, how did things end up at the company you worked at?

I had a similar experience with a startup out of college. On reflection, I
should have noticed that among all the photos on the "mentioned in the news"
billboard, the only familiar faces were the founders...

~~~
Twirrim
Still trundling along in a dead end race-to-the-bottom market. New CEO now,
not sure what happened to the old one given he was also the founder,
presumably he's in more of a board role or something. Unsurprisingly given the
high turnover rate, I soon had no contacts left in the company and stopped
paying attention. Without exception, everyone I knew has moved on to better
things.

~~~
rm_-rf_slash
Sounds eeriely similar to my own situation, without the CEO turnover.
Godspeed.

------
ttctciyf
There are some gems at the glassdoor site referred to in the article.

 _It is true, CTO did make whole team of people redundant on New Years Eve via
voicemail - maybe 'how to' book on leadership taught him redundancy
procedure._

 _Led by a truly odious individual, this attitude is prevalent throughout the
company. Senior management are relics of the 80 's living off their success in
the last dotcom boom (and bust), who believe the film 'Wall Street' is a
training manual for management, business practices and team leadership._

These were via [https://www.glassdoor.com/Reviews/Employee-Review-Powa-
Techn...](https://www.glassdoor.com/Reviews/Employee-Review-Powa-Technologies-
RVW3877050.htm) \- looks like a signup would be necessary to get the full
reviews.

I noticed, though, that clicking through to the full reviews page, the most
recent are glowing ones from Powa's head of development and head of sales ;)

------
jaymzcampbell
I had a meeting with their sales people back in 2013 or so, a few year anyway,
and I remember thinking after the hour long pitch that the claims where
entirely delusional and pumped up. It was "just" a QR code with an app behind
it and ultimately nothing at all fancy but they spoke about it like it was a
total paradigm shift in buying. I never got how they lasted so long, reading
the glassdoor reviews over the past year it was clearly a sinking ship years
ago.

I honestly can't understand how they got nearly $100m in funding.

~~~
edent
Yup - same here. The whole product was just... meh. If it had been backed by a
market leader or (shudder) a consortium, it might have had a chance of
success.

But a new entrant trying to sign up merchants individually?

~~~
madaxe_again
They weren't interested in working with platforms either - they were actually
actively offensive when we contacted them. Probably something to do with
Wagner's background at Venda, a platform provider he founded.

Their users group call themselves "the prisoners of Venda"!

~~~
astrange
Might as well go for the pun.

[https://en.wikipedia.org/wiki/The_Prisoner_of_Zenda](https://en.wikipedia.org/wiki/The_Prisoner_of_Zenda)

------
hitekker
One reminder I say to myself when reading stories like this:

It can happen to you.

Dramatic failure, maybe not: but there are plenty of startups out there in
that gray zone of "we don't really know what we're doing but we have several
redeeming qualities!"

That zone, the upper 10% of "hyped" startups shall we say, are far more
deceptive, and therefore dangerous, than the "obvious" bad companies, the
bottom 90%. It's easy to laugh at all those investors who got hornswoggled by
an out-and-out narcissist. It's less easy when the team is super- smart, the
founders super-motivated and the only factors missing just happen to be what
separates the 10% from the 1% who are truly successful. It could be product-
market fit, work-life balance, or whatever the team needs at the moment. The
only way to know is to be super-paranoid[1]

Much like the stuff on /r/subredditdrama or /r/cringe, spectacles of human
foibles convey "I'm better than the worst, so I am good." which, for me,
translates into a false sense of confidence.

[1]
[http://www.goodreads.com/book/show/66863.Only_the_Paranoid_S...](http://www.goodreads.com/book/show/66863.Only_the_Paranoid_Survive)

~~~
julie1
Startup business backed by VC is kind of unsound.

The traditional way maybe longer : minimal investment and constant self
sustainability, but it seems also better at helping founder adapt to changes
in costing and technologies.

When you have 50 customers it is easier to recognize you made a mistake in
architecture and change it. While aggressive market spreading with freemium
lock you in faster and makes you less agile.

Also you get very soon aware of your real costs.

But, the problem is VC+startup tends to aggressively compete with sound
business in a way that has nothing to do with pure merit but often just the
capacity to access capital (which according to most studies relate to birth).

I am an hardcore historical liberal, I don't really think that birth is a
merit that is leading to a competitive market. Else, most of the leading
economical nations would have remained monarchies. I also accept people have
the right to live in dignity from their work and do not have to be all
entrepreneurs.

I kind of think people misunderstand what liberalism is.

It is the right for people to choose a dignified existence through work with a
clear contract of one hour worked has to be paid, and the right if people
wishes to be entrepreneurs that have the possibility to access to a truly
competitive market based on their merit without distortion.

And like any liberal I think it contributes to prosperity wealth and happiness
of the Nations in an efficient way.

~~~
noir_lord
> The traditional way maybe longer : minimal investment and constant self
> sustainability, but it seems also better at helping founder adapt to changes
> in costing and technologies.

True and that's the approach I'd take but there is a benefit to the other way
if you have a product that is a first or is the first to do something well,
first mover advantage to grow big fast required a lot of capital (the costs to
do that have dropped hugely but are still not trivial).

Some businesses grow best organically and some require a shot in the arm.

~~~
julie1
If they require a shot in the arm backed by massive investment, I don't think
privately owned interest favouring statistically birth over competence is the
right way.

It is basically both ploutocratie and major life changing decision who are
escaping the control of the people. Hence not driven neither by the interests
of Nations nor of the environment.

We are supposed to live in democracy where the people are free to decide to
not trigger a massive extinction of species or fuel wars based on biasing the
access to oil or cheap enslaved workforce.

I think we have the right to decide our own destiny. But, it is because I am
an idealist still believing in the rights of the people, freedom and fair
competition.

------
unfunco
I've worked with Venda (for two separate companies) and met Dan Wagner and
their platform is truly an awful piece of software, and the man himself isn't
much better, my job was basically to find methods of subverting the software
in order to do what our marketing team wanted. It's roughly £6k per month, and
account management is slow to respond and it's very difficult to do anything
meaningful with the technology. One of the companies is still with Venda with
the intention of moving away, and one moved to DemandWare after roughly a
year.

Powa is Venda's answer to Shopify, trying to capture the smaller market, the
software, and the management, was never good enough to compete.

~~~
dijit
I worked /for/ Venda in their platform operations team in London, and
everything in the original article is as true for Venda as it is for Powa.

We had herman miller aeron chairs and a prime piece of real estate in central
london (by the Noel Coward theatre) but had never turned a profit, the Venda
application was 2million lines of perl that could "sustain" 1 hit every 30
seconds, so most of my job was maintaining expansive arrays of caching
systems.

The upper executives and thick layer of middle management were smarmy and
entitled, and the operations staff took it as a challenge and a matter of
personal pride to make it work "Smooth seas do not make skilled sailors" was a
common motto.

I was once publicly berated for helping a customer on the phone because the
management wanted to bill time for what was literally a 30 second change (I
did it WHILE on the phone with them).

They do a good job of soaking up all the perl developers in London though.

also, FWIW: they sold the company to someone shortly after I left, it may be
better managed now, but I can't be sure.

~~~
unfunco
I visited the office a few times between maybe 2008 and 2012, if you were
working there then, we likely were in the same room at some point.

I can't remember the exact syntax, but I used to find it hilarious that each
Venda tag had to have a unique label, and since the code was notoriously
difficult to navigate, everyone just ended up using random numbers and hoping
that it wasn't used elsewhere.

    
    
        <venda_something label=5318008>
            ...
        </venda_something>

------
Nursie
I worked with them through 2014 and saw the NYE firing. Pretty brutal.

But at that point the 'agile' team hadn't delivered in over a year. Badly
mismanaged...

~~~
chris_wot
What exactly happened on NYE?

~~~
Nursie
About 20/30 developers were fired via SMS on NYE 2013/14

~~~
busterarm
Support.com (NASDAQ and soon to be OTCBB[sauce]: SPRT) let go of over 20% of
their call center by email/robocall that same day. That was a 'fun' year.

[sauce]:
[https://biz.yahoo.com/e/160223/sprt8-k.html](https://biz.yahoo.com/e/160223/sprt8-k.html)

------
coldcode
Getting money from VCs is usually difficult, how do idiots like this guy scam
$200M from people? Makes the VCs look equally stupid.

~~~
d4nt
I think people generally assume that confidence is backed up by reality. I've
found that one of the most useful sales techniques is to be friendly and
polite but also very confident. People find it reassuring.

Sounds like this guy took it to the extreme though, and lost all perspective
on reality along the way.

~~~
cubano
Hmmm...yes maybe that picture of him in the Bowie getup was the giveaway for
that conclusion?

------
drcongo
The opening paragraph on the CEO's wikipedia page is a gem:
[https://en.wikipedia.org/wiki/Dan_Wagner](https://en.wikipedia.org/wiki/Dan_Wagner)

~~~
yitchelle
Another gem from wikipedia "His choice of attire (a Donald Duck waistcoat) to
a media photocall ahead of the MAID IPO was considered responsible for
reducing the value of shares by 10p."

~~~
MattyRad
Unfortunately a quick google image search for "Dan Wagner donald duck
waistcoat" yields no results, but that would be quite something so see.

------
diskcat
You need basically every merchant to sign up for your payment app to work.

Otherwise people would just use credit cards, who have been here since
forever.

~~~
maffydub
I'm not sure you need every merchant - I think you only need a significant
proportion of the merchants that a specific population use.

I probably make most of my purchases with a very small group of retailers -
for example, in terms of number (not value) of transactions, the sandwich shop
by my work and the corner shop by my house probably account for 80% of my
offline transactions. (I go to the supermarket about once a week, and although
I tend to buy more, that's all in a single transaction.)

If you could sign up those merchants, and give me a compelling reason
(convenience, discounts, rewards) to use your payment app, it might not matter
that I couldn't use your payment app on those rare occasions that I go
shopping somewhere else.

Just a thought. (I'm not in the payment industry.)

~~~
eterm
Local shops all accept contactless payment though, which is faster than
anything involving a smart phone could ever be. You literally just hover your
debit card near the terminal and you're done, no pin, no signing[* ], it's
quicker than unlocking a phone.

[* ] I've only once in my life ever had to sign for a transaction, it's not a
common method, I just mention it here because I know some countries still use
it.

~~~
zelos
Yes - I wonder about that every time I see an ad for Apple Pay or some other
payment app. Contactless is rapidly becoming the default, so how do you
compete with it?

~~~
simonh
Most people have their phone more easily to hand than a card, which needs to
be extracted from a wallet or purse. So in practice Apple Pay is often faster
and more convenient.

It's also more secure because you're authenticated by the fingerprint scanner,
and it's anonymous.

~~~
m-i-l
_Apple Pay is often faster and more convenient_

There have been several times I've got stuck behind someone using their Apple
phone to get through the gates on the London Underground and have noticed two
or three people get through the gates on either side in the same time as the
one with the Apple phone. And it isn't just me - according to
[http://www.theguardian.com/technology/2015/jul/16/tfl-
cautio...](http://www.theguardian.com/technology/2015/jul/16/tfl-cautions-
pitfalls-apple-pay) the iPhone "has led to irate commuters and queues at the
gates".

~~~
Reason077
People on the Tube using Apple Pay need to realise that you can do the Touch
ID authorisation _before_ reaching the ticket gates.

The transaction will stay authorised for a couple of minutes, at least, and
then the gates will open nearly instantly when you put your phone near the
sensor.

This isn't an issue for using Apple Pay via the Apple Watch, since that device
skips the Touch ID requirement (instead, it will de-authorise if you take it
off your wrist).

------
ianes
For those interested in seeing Dan Wagner in action, this is a video Christmas
message (4.44 mins) sent to all staff in December 2015. Powa went into
administration in February.

[http://youtu.be/sWhI5YK-_No](http://youtu.be/sWhI5YK-_No)

------
CM30
Wow, the letter of intent thing is kind of depressing. I mean, say what you
like about Dragon's Den/Shark Tank esque 'business' TV shows, but that point
comes up in almost every episode; a letter of intent is not a deal or
contract. But no, a '2 billion dollar' business was rewarding staff for
getting these.

And yeah, all the expensive office space, fraternity esque atmosphere, manager
posing for photoshoots stuff... it's like the company was set up and run by
people who wanted the glamour of running a large company rather than those who
wanted to actually make a viable business out of it. The whole thing feels
like something you'd read about a dotcom business in the 90s, right before the
crash.

------
debarshri
Story sounds quite close to what happened to boo.com
[https://en.wikipedia.org/wiki/Boo.com](https://en.wikipedia.org/wiki/Boo.com)

~~~
willvarfar
The CEO's wikipedia page
[https://en.wikipedia.org/wiki/Dan_Wagner](https://en.wikipedia.org/wiki/Dan_Wagner)
says:

"Wagner remained on the board of MAID until 2001 and founded Venda Inc later
that year.[6] Venda Inc is provider of e-commerce software originally built
using technology from the defunct company Boo.com.[1][4] Wagner had acquired
Boo.com for £250,000 in 2000 following the dot-com crash.[12]

...

In 2007 he also founded Powa Technologies, an e-commerce business based on
Venda Inc's small business solution, but with additional services for in-store
and mobile point of sale and software for mobile payments called PowaTag and
PowaPOS, formerly known as mPowa. Wagner introduced PowaTag in 2014, after
receiving more than $100 million in funding.[15] Users of the service can make
purchases using QR codes, audio watermarks and iBeacons.[6][16]"

So Boo.com -> Venda Inc -> Powa Tech :)

~~~
dullroar
Later in the wiki article: "Wagner operates his various business interests
from a holding company called Bright Station. Bright Station has revenues of
$50 million and employs 450 staff." Am I the only one who thinks $111,111 in
annual revenue per staff member is really low for a supposed tech holding
company? The multiplier should be much higher than that (or they're paying
slave wages plus stock options to make those numbers work).

------
l33tbro
Good riddance. Dan Wagner was basically Gordon Gecko via David Brent.

~~~
VMG
I'll just leave this here: [https://www.youtube.com/watch?v=eHzKQdX-
_KA](https://www.youtube.com/watch?v=eHzKQdX-_KA)

~~~
Toenex
Link not working in the UK due to copyright. This one does though
[https://youtu.be/L3pXnzBPT98?t=27s](https://youtu.be/L3pXnzBPT98?t=27s)

It's from a comedy pilot called 'Golden Years' which is very clearly a
development step towards 'The Office'.

------
eterm
" The start-up said that adding its PowaTag button to sites would reduce the
risk of customers changing their mind before completing a purchase "

Instead they'll change their mind after it has been dispatched, costing the
vendor more.

In the UK at least distance selling rules mean that anything[1] bought on the
internet can be returned up to 14 days later without requiring a reason.

[1] There are of course some exceptions for certain product types.

------
ianes
interesting insight here into how Powa's management tried to manipulate the
reviews on the Glassdoor site, written by an ex-CFO of Powa.

[https://www.linkedin.com/pulse/powa-glassdoor-reviews-
were-m...](https://www.linkedin.com/pulse/powa-glassdoor-reviews-were-
manipulated-steven-prowse)

~~~
abawany
(bit off-topic): it seems human nature to manipulate reviews (Yelp, Glassdoor,
Google) especially when "anonymous". Seems like what is needed is a third
party to verify identity and certify to the review site that the reviewer is
real and from a real person. This hopefully will maintain anonymity unless a
sub-poena is involved.

------
danso
Sounds like some people were miffed that they missed out on Clinkle and
overcorrected a bit too much.

------
spacker
Dan Wagner talking about an employers' responsibilities to its employees
[https://youtu.be/Udc46TNfOtY?t=3m42s](https://youtu.be/Udc46TNfOtY?t=3m42s)

------
MattyRad
Sounds like the startup was run by Russ Hanneman. It's eerie that the
characters in Silicon Valley (the TV show) can be pointed to real life people
so easily.

------
jorgecurio
> the deal". Mr Wagner, who claims to have a stellar record as a serial
> entrepreneur, was still telling everyone who would listen that his was a
> company that would be bigger than Google or Facebook one day. As recently as
> last October, he told Evan Davis on Radio 4's Bottom Line that the business
> had been valued at $2.7bn by its backers Wellington. Evan suggested that was
> a meaningless figure because Powa hadn't made any money yet. "We're a growth
> tech business," Mr Wagner replied, maintaining it was other people who had
> set that value.

holy crap this reads just like the interview with Pets.com in a 1999 edition
of some PC magazine

