

WakeMate (YC S09) runs out of cash, co-founder allegedly spams users - antr
http://thenextweb.com/insider/2012/06/28/wakemate-out-of-cash-co-founder-allegedly-spams-users-to-raise-money-for-similar-new-venture/

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droithomme
They built a legitimate product that some people wanted and managed to get it
manufactured and shipped. That's a lot farther that most go.

The product sales weren't able to get to enough volume to support the company
and the needed lowering of costs that comes with volume manufacturing. That's
not uncommon. Sometimes hardware devices do better with large corporate
backing because they can afford to take a loss longer while they build up a
market. For small operations, this is the perfect case for venture capital
where outside money is needed because of high costs of doing real
manufacturing.

I see no need to hate on them like the article does. It's sad the founders
turned on each other at the end, that can't have helped things. If these guys
pull out, have the right insights about what they have learned, and do another
round at something else, their chances of success will be much higher than
someone without their experience and ability to actually envision and execute
a product that people wanted. Just not enough people this time.

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rikf
Baffling with all the publicity they have surely this character would have
been better off with an open and honest kickstarter? Stating they realise they
made mistakes in the past how they are going to correct them and what is
different or better about the new product. I would have probably contributed
because I think its a really interesting product.

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bwooce
There is no allegedly about it, I was spammed with an offer for a new
Wakemate. I forget the wording. Plus the follow up apology.

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robinwauters
true but I like to stay on the safe side until Greg gets back to me.

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antr
Robin, it's time to update your employer on your HN profile ;)

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robinwauters
ha, good idea :)

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canttestthis
If the previous Eligible App HN submission is anything to go by, this will be
ninja downvoted by HN mods.

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FelixP
I'm reserving judgement until we hear both sides of the story.

Obviously, this could simply be blatant bad behavior, but as even Arun said in
his post, he doesn't really know what's going on. I could easily envision a
situation where the company has run out of capital and one of the founders
decides to take things into their own hands to keep the idea going simply
driven by passion.

Of course, if that was his motivation, his execution was remarkably poor.

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a5seo
It's pretty clear cut-- if Milife is a new corporation, with new owners, then
the only way they should have had the list is if they paid WakeMate for the
list. Any other use is theft from WakeMate shareholders. I think the odds are
very good there will be legal problems for Milife, possibly criminal.

Greg took Pincus's lie cheat and steal message too seriously.

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droithomme
The shareholders are the VC investors. If they want to rip apart one of the
few people around that managed to execute manufacturing a real hardware
product and getting it shipped rather than stay on good terms and get in on
his next idea, that's their decision. Foolish, but it's their life.

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archangel_one
It seems fair that they wouldn't want to encourage this sort of thing;
founders/employees of a company can't just start a new company and use
information from the existing one to start it up. Criminal charges seem pretty
heavy, but it seems like what was done here wasn't right.

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a5seo
I have seen former employers get the FBI to come after ex employees who used
lists, data, etc. expropriated from the company. All it takes is a phone call.
Really, its not the company's choice anyway... if the law has been broken, the
authorities pursue it at their own perogative.

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droithomme
Has a law been broken? I don't agree with all the people stating a law has
been broken without saying which one. Smells like smearing someone. Accusing
someone of committing crimes is very serious.

He was still the President and founder of WakeMate when he sent an email about
a new thing he was getting into. He didn't hack into an account he had no
access to - it was his account. The article claims he didn't "get permission".
Get permission from who? It was his account.

Claims this is "criminal" are absurd, ridiculous, and libelous.

On the other hand, the story discusses that the code that is owned by what is
left of the company is going to be open sourced, essentially given away to the
general public. This code is the real value of the company and likely cost
millions to develop. Was this move approved by the shareholders? It does not
say that it was. This move is something that the company owners could object
to. It's blatant theft of company property and transfer of it to others. Have
the VC owners of the company and thus the code signed off on it? Even if they
have, it might not be relevant. Since it appears they are out of money, is the
company in bankruptcy court? Do they owe suppliers? Are they going to go
through bankruptcy or not? Transfers of the core company assets at this point
should not be done without the approval of a judge, not even the VC "owners".
If they have debts and assets (the source code) and reallocate those assets to
others knowing that they are going to have to declare bankruptcy, that is
fraud. The code usually would be sold at public auction and the money then
used to pay off debt owned by the company, which may include unpaid bills, but
may also include salary owed to the principals to wind down the company in a
way so that assets can be sold for a reasonable amount. I see no indication
that anyone involved in preparing this code for open source release is going
to be paid for it. They are under no obligation to do so without pay even if
such a move was approved by VC owners and/or a judge.

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ktizo
I like the fact that they are open sourcing the tech though, perhaps someone
else can improve it so it doesn't go on fire.

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zvikara
The actual device is safe. Only the provided cheap Chinese usb charger can
catch fire.

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ktizo
The device was smouldering in the video. <http://www.twitvid.com/UBBWC>

The cheap charger may have sparked it, but it was the lack of current limiters
or heat cutoffs in the device that appears to be the actual problem.
Electrical inputs should be treated much like form inputs on a web page. Never
trust them to be what you designed for.

