
Clinkle Implodes as Employees Quit in Protest of CEO - ssclafani
http://techcrunch.com/2015/05/15/clunk/
======
NhanH
How did the founder manage to build a company of 70 employees without a
product and securing 30 million fundings after 2 years of not really showing
anything? And to top that of, it didn't look like the founder has any track
record before this company.

I'm not interested in mocking or bashing the company, I just wanted to know
the possible mechanism that would result in such ... unexpected scenario. Is
hustling really that effective and I have been underestimated that all along?

~~~
api
Can't speak with authority about Clinkle, but I strongly suspect that the
founders have an "extreme alpha" personality type.

I have seen people with that personality type be able to just basically tell
people what they want and get it. It's really a sight to behold.

"I need 50 million." "Okay boss.

I think there's two mechanisms at work. One is what you might call the
"reptile brain," which reads such signals and simply interprets them as "this
is my pack leader." The other mechanism is I think a cargo cultish belief in
the power of those personality types to just always succeed no matter what.
"Man, he seems like a winner." (This personality type seems to almost always
be male, at least in my experience. Definitely not trying to be sexist. Might
be being a bit reverse sexist though, since I do not find this trait
redeeming.)

You would think that VCs would be inoculated against this kind of thing. You
would think. But I personally know of two examples of people with off the
charts alpha personalities who were sort of serial killers of wealth. Raise,
burn, raise again. Their alpha personality trumped any notion of merit or
track record.

~~~
imron
_One is what you might call the "reptile brain," which reads such signals and
simply interprets them as "this is my pack leader."_

I'm curious to know, which reptiles live in packs?

~~~
ceejayoz
[http://en.wikipedia.org/wiki/Triune_brain](http://en.wikipedia.org/wiki/Triune_brain)

~~~
imron
From the first paragraph of the article:

 _However, this hypothesis is no longer espoused by the majority of
comparative neuroscientists in the post-2000 era._

~~~
ceejayoz
Yeah, it's probably BS. It seems to be a commonly espoused belief in MRA
circles.

------
shostack
I feel like this needs to be incorporated into an episode of Silicon Valley.

The bit about not actually having a real product in production reminded me of
a recent episode of the show where it was mentioned that sometimes it is
better to not have a real product and revenue because then valuations can be
blown way out of proportion in the frenzy without any real revenue benchmarks
to base them on.

~~~
hkmurakami
I believe that derives directly from what people like Fred Wilson or Mike
Arrington have been saying:

 _" As I was reading Josh Kopelman‘s excellent post on the seed boom and
Series A bust, I got thinking of some words of wisdom Mike Arrington once
shared with me. He said “numbers always ruin a good story.”

What Mike meant by this is you can raise a seed (or Series A) on a story. But
at some point, you will have numbers; users, user growth, revenues, and
revenue growth. You will also have a burn rate. And those numbers will become
the thing you are judged on and your nice story will be “ruined” by the
numbers."_

[http://avc.com/2015/03/numbers-can-ruin-a-good-
story/](http://avc.com/2015/03/numbers-can-ruin-a-good-story/)

~~~
jkestner
Yeah, as usual, when I watched that episode, I'm turning to my wife and
muttering "This is true." The writers may be story-driven, but it seems like
Bad Money was introduced just to have an outsider who was in-the-know to be
able to draw light on the VC machinery.

~~~
shostack
The number of times I've turned to my wife and muttered "This is true" while
watching is pretty startling.

In talking to people at work about it, there is a general sentiment of "haha,
this is really funn....errhmm...that's a little to close to reality..."

Mike Judge is an absolute creative genius.

------
aaronbrethorst

        After four years of work and ridicule, early employees at the company
        are said to have been actively encouraging a sale, even if it didn’t
        come with a massive acquisition price. Sources say that many employees
        didn’t have much to gain anyways. Duplan had offered only tiny shreds
        of equity, convincing hires that Clinkle could be a billion-dollar
        company and their share could turn into tons of money.
    

A lesson I've learned the hard way is to never let your sense of greed impair
your judgment, especially around the relative certainty of success of a
startup. A stupendously well-funded startup indicates only that the founders
are good at fundraising, not that they're good at building a product or a
company.

------
downandout
_" Yet suddenly, the startup was the talk of the town when it managed to raise
$25 million in seed funding in June 2013 from top investors including Peter
Thiel, Andreessen Horowitz, Marc Benioff, Jim Bryer, Accel Ventures and Index
Partners."_

These guys are all supposed to be amazing predictors of the future. Who really
cares whether payment data is transmitted via ultrasound, bluetooth, NFC, or
over the wifi/cellular data connection? How does adding ultrasound to the mix
shape the future, as all of these guys claim they want to do?

I blame the investors in this case more than Duplan. There are 70 people that
wouldn't have been hired and fired if those investors hadn't written this
apparently very immature 21 year old kid a $25M check for some hokey
technology. Duplan clearly had a knack for communicating a believable grand
vision, but little ability to deliver on it. Investors at this level -
allegedly some of the most sophisticated VC's on the planet - are supposed to
be able to identify people like this.

~~~
ghshephard
I'm genuinely curious. Let's say things had turned out slightly different,
he'd been able to negotiate the deals with the banks that he needed (let's say
he had a Board Member who helped open a few doors, or perhaps a Sr. Executive
who had deep experience with the banking industry/regulations, and could
expedite) - and let's say that clinkle had taken off, and was generated
sufficient revenue to be a $10B company. Would you still blame the investors,
or would you be impressed by their willingness to take risk?

From the New Yorker article on Marc:

 _Each year, three thousand startups approach a16z with a “warm intro” from
someone the firm knows. A16z invests in fifteen. Of those, at least ten will
fold, three or four will prosper, and one might soar to be worth more than a
billion dollars—a “unicorn,” in the local parlance. With great luck, once a
decade that unicorn will become a Google or a Facebook and return the V.C.’s
money a thousand times over: the storied 1,000x._

A16Z invests in 15 companies/year, knowing ahead of time that ten of them will
fold. Being able to predict the future is hard.

~~~
flylib
A16Z invests in a lot more then 15 companies/year, that article is way off in
that regard

here is a tweet from dec 2014 where Chris Dixon (General Partner) said they
did 30 seed deals last year adding up A, B, C, etc. they do closer to 50-100

[https://twitter.com/cdixon/status/544570097465954304](https://twitter.com/cdixon/status/544570097465954304)

crunchbase shows they have done 31 publicly known ones in 2015 so far

[https://www.crunchbase.com/organization/andreessen-
horowitz/...](https://www.crunchbase.com/organization/andreessen-
horowitz/investments)

------
MCRed
I worked for a company where this happened twice in three years.

I joined the company only to discover that the entire development team (sans
one guy) had quit. We built up a new team, put up with an amazing amount of
mismanagement, gas lighting, etc. For example: not only would they not make a
spec, they wouldn't give us details about the features they wanted. We'd ask
questions and they would be ignored. Then months later they'd chew us out for
not building things they had never even mentioned wanting. And they installed
an ex-navy seal who had 20 years in the military, a couple months n the
business world and no understanding of (nor respect for) technology. He
started finding people to hound out of the company and get fired-- because he
always needed a scapegoat.

We put up with this for a year, and then all of us, quit again. (well the one
guy who was there from the beginning is still there, and a couple people who
don't have easy mobility are still there, moistly because they had been on the
job only a month or two.)

And now they have a new team. Things have not improved at all... but so long
as they can continue to hire people they will.

Management has decided that the engineering teams that quit "sucked" and that
they're the reason there are "problems" today (like not implementing features
that were never requested, etc.)

So long as they can keep hiring people, they're doing so.,

This while the glass door reviews are really terrible.

Most people don't read glass door.

So that's a lesson: Read glass door. Don't expect that even you and a bunch of
others leaving will end the company.

~~~
sbov
_Read glass door._

Beyond that, read the whole history on glass door. If the ratio of reviews to
employees is high, something is fishy.

A friend of mine worked at a company. He pointed out they had terrible reviews
on glass door. So they started asking new hires to review the company. I think
the ratio is now something crazy like 1 review for every employee who
currently works there.

The company was comically evil. Among a sea of terrible stories, one of the
worst I can think of is at a company party the CEO told the whole staff they
didn't care about them and want to just get rich off their hard work.

~~~
caseyf7
That's a good one. I've also seen HR departments that make their team members
write 5 star reviews every week.

------
pkaye
Reminds me of this...
[https://twitter.com/mrgan/status/384780273721696256](https://twitter.com/mrgan/status/384780273721696256)

------
heimatau
I'm glad seven employees decided to quit a rude/poor boss. Although I'm only
basing 'rude/poor' based on quotes from the article, not from personal
experience, I think it might have some merit. Props to them.

~~~
pinewurst
There have been lots of rather funny articles on Valleywag about how truly
awful a boss we're talking about.

------
minimaxir
For those who want a little more information about Clinkle's corporate
culture, check out their hackathon music video. (yes, you read that right)

[https://vimeo.com/99884205](https://vimeo.com/99884205)

------
pinewurst
"After approaching Google about a potential deal, a team of Clinkle’s top
engineers visited Google to go through rigorous testing to see if the startup
was worth acquiring. Sources say Google declined to issue an offer." I have a
mental issue of a line of engineers on tables undergoing colonoscopies.

------
netvarun
On a slightly (un)related note, clinkle.com doesn't even appear for me (based
in SF) in the first page for a Google search on 'clinkle'
[https://www.google.com/search?q=clinkle](https://www.google.com/search?q=clinkle)

------
mintplant
So what _is_ Clinkle? Digital wallet? "Treats"? Can someone pin it down for
me?

~~~
21echoes
A bank that you could sign up for and use on your phone. You got a debit card
with ATM access and rewards without a credit check. The app showed your
payment history and let you send money to and request money from other Clinkle
users.

~~~
foobarqux
Plus merchant terminals + payment system?

~~~
21echoes
yup, but that was dropped late 2012 in favor of debit cards for backwards
compatibility, with plans to re-introduce merchant terminals once there was
user adoption

------
bsg75
[http://www.businessinsider.com/inside-story-of-
clinkle-2014-...](http://www.businessinsider.com/inside-story-of-
clinkle-2014-4)

> “It’s not the kid’s fault,” McCarthy said, defending his flustered boss.
> McCarthy sometimes took over for Duplan during the weekly all-hands meetings
> on Fridays, correcting him and referring to him as “kid.”

Its a bad play to join any company whose founder and chief executive is at his
first leadership post (first real job?).

~~~
dylanjermiah
I'd be careful to generalise, Faceboook was Mark's first job.

~~~
bsg75
With what successes, either personal or for the company?

A couple years at FB does not a leader make.

~~~
dylanjermiah
Both. It's been a decade now. Mark, and others, have built one of the most
valuable technology companies of all time. In my option that's a great leader.

~~~
bsg75
> Mark, and others, have built one of the most valuable technology companies
> of all time.

Clinkle?

I am genuinely interested in the measure of value here. Multiple rounds of
layoffs (and apparent mutiny), experienced management hires departing in days
or hours, millions in investment resulting in what? An exit strategy?

~~~
dylanjermiah
No. I was referring to other Facebook employees.

------
7Figures2Commas
> While Clinkle’s brand had been tarnished by reports of its internal
> troubles, the companies were said to eye the variable reward system as a way
> to differentiate their mobile wallets and get users to demand merchants get
> on board.

Apple, Google, Amazon, Samsung and Visa can't develop their own variable
rewards systems?

~~~
manachar
I wonder if there's intellectual property at play that would prevent others
from doing so. If it's even possible to end up in court it may be cheaper to
acqui-purchase the intellectual property via the company.

------
adamnemecek
Hasn't the company 'imploded' like twice already?

------
Fr0styMatt8
Going to sound a bit cynical here, but really isn't $30 million just spare
change to a VC?

To us we see $30 million and think "that's a ton of money!! how could he get
that funding?" but to the VC it's like "Here's a bit of spare change, maybe
you'll make something out of this, maybe not".

From that viewpoint alone I could understand why a VC would fund this. I mean,
could you guarantee that it's NOT going to be some breakout hit? What if you
did pass on that $30 million investment and the company did actually turn out
to be valuable? It's easy to say post-hoc once the company has been stupid
that the VCs ought to have known about it, but it looks different if you think
back to what the VCs must have known when they were approached.

------
il
The canonical example of funding!=success.

------
jonsterling
GOD, so much schadenfreude here...

~~~
dropit_sphere
Alas, because we've been seduced by the promise of sweet sweet VC money +
IPO's.

I'm a weird case, but maybe not _that_ weird. I realized recently that I don't
really even _like_ programming. I mean, not as much as I like sitting on the
beach, or hiking, or talking to a friend at a party. I'm in it for the money.
I'd rather see the better technology/least sleazy company win, but if I had
ten trillion dollars I'd go sit on the beach, not keep programming. I'm here
for the money, I'm just determined to not be corrupted along the way.

So when I hear about the demise of Clinkle, I must admit I rejoice somewhat.
Because their product was dumb, or at least unimaginative, and I know that
funding is limited.

But I think technology used to have people more like Steve Wozniak, who really
cared about the technology for its own sake. And someone like that would have
no particular feelings about Clinkle, because they already got their wish of
being able to hack around on tech all day.

So, yeah, an apology for schadenfreude.

~~~
jonsterling
Sorry, my comment was poorly worded—I mean that I am experiencing
schadenfreude, not criticizing people who are also experiencing it.

Cheers!

------
technologia
Ok, I might be an ass for saying this but I find the fact that on their
careers page literally everything is open now is funny is a righteous sort of
way.

~~~
dragonwriter
Not everything, just a lot in the Engineering area and some in Design and
Operations (Growth, Business, and Product don't have anything.)

~~~
ulfw
I guess they aren't really planning on growth, having a business nor a
product...

~~~
dragonwriter
From the TC article it seems to be largely the tech team that left so it's not
too odd that that would be where the openings are.

------
kolev
I knew this was going to be a grand failure by simple indications. Their "app"
was a total waste of bytes on my phone, even for something as simple, it was
buggy and wasteful. Also, their verification system was broken. Never got an
SMS and I exceeded their limit of 3 (cheap bastards). I've sent numerous
emails, never got a response. A real startup never does this!

------
akoumjian
Amazing that you can raise that kind of seed money without a working
prototype. They must have been claiming some serious IP assets.

Also, $25 million seems like a lot for convertible notes. Each one probably
didn't exceed a few hundred thousand a piece. This is an excellent example of
how once you convince a couple key investors to join, there are dozens waiting
behind to follow.

~~~
21echoes
[https://news.ycombinator.com/item?id=9554656](https://news.ycombinator.com/item?id=9554656)

------
curiously
what's obvious to me is that

capital is available and flowing towards people who shouldn't really have it.

but overall it is working for the smart investors.

but really, people are throwing money around for crazy returns.

~~~
djloche
unintended consequences of artificially low rates.

------
MichaelCrawford
24 year old CEO?

I don't care if he went to Stanford. I went to Caltech. I didn't have the
first clue when I was 24.

~~~
bexmax
Oh, original. "Kids these days". Look around you, the "millenials" you are
ridiculing are taking the tech world by storm, graduating at record rates with
more advanced degrees than ever.

Who do you think you are debating with on HN? I would guess the average user
here is under 30 and making twice your inflation-adjusted salary at 35.

~~~
toomuchtodo
Doubtful. Most millennials are graduating with unserviceable levels of debt,
working jobs that pay wages that barely keep up with inflation.

For the small minority in the tech industry, the situation is much brighter,
as long as the VC money keeps flowing. Those older have seen what happens when
the music stops and not everyone has a seat.

I hope you have a sufficient emergency fund and something besides
$tech_flavor_of_the_week under your belt. Enterprises that provide safe havens
during tech bust periods hire a bit differently than tech startups.

------
SQL2219
Maybe those VCs had their beer goggles on.

