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Mutiny at HQ Trivia Fails to Oust CEO (techcrunch.com)
113 points by daniel_iversen 7 days ago | hide | past | web | favorite | 60 comments





Ok, so this is Startups for Employees 101. The warning signs to get out were here 1.5 years ago [1]. And they are:

1. Nut-bar egomaniac CEO bordering on the delusional; and

2. A business that probably should never take VC money. Producing content (which is what HQ Trivia does at the end of the day) is a notoriously hard business to scale. I can remember years ago when Rovio (remember when Angry Birds was a thing?) took VC money. Huge mistake. HUGE. It is seriously detrimental to your long term viability as a business that generates an income.

So yeah, stay at your own peril.

[1] https://www.thedailybeast.com/ceo-of-hq-the-hottest-app-goin...


Minor nitpick, but Rovio seems to be doing ok. https://www.bloomberg.com/quote/ROVIO:FH. Their price went down pretty hard after the IPO, but lately they've been trending up. They currently have a market cap of $500M. Would they ever have gotten that far without VC? Their only big raise was $42M, if Wikipedia is to be believed.

The Angry Birds movie made what, like $350 million? It's a phenomenal franchise.

Making money off the stock isn't like, the only way to make money. HQ would kill to be anything close to as significant as Rovio.


I think I get what you're saying, but that was released five years post-VC. So I don't fully understand how VC could be considered to have ruined Rovio if, five years after accepting it, they're dropping movies that return 3x their cost to produce.

I'm an outsider to VC/Startup funding-- what's wrong with a company like this taking VC funding?

I'm not a fan of today's VC model and have never taken it myself, but the best-case scenario for taking VC is when you're having trouble keeping up with demand.

In some cases, this is because you've tapped into a big market and sales are moving faster than you can scale your operations. You need to do the same thing you've been doing, but you need to do more of it quickly.

In other cases, you might have found a way to drastically increase sales, perhaps from building a new line of business that complements your old one.

HQ Trivia needs something that you can't get with more money, and that's a creative way to avoid being a fad. They needed a way to keep people on their app, and they didn't find one.

As you've seen from Instagram's wild success at this (before Facebook's acquisition) and Snapchat's decline, money isn't really a factor. It's mostly luck, honestly.


To play devil's advocate, why not take the money?

Of course it won't work out in the long run, but in the short term it might be fun and it'll employ some people for a few years. When the money runs out everybody can jump ship to other, equally nonviable, startups and do it over again.


There's a bit of a phenomenon in Sydney (possibly elsewhere, I wouldn't know) of companies doing this.

I call them VC-bait or grant-bait. There's a handful of grants you can get for startups here, so they'll get all of those, get some free hosting from Microsoft, put up a landing page etc. If they're lucky they'll get a few tens of thousands from private investors, then fall over a few months later.

I'm not sure if it's intentional or if people are just clueless, but in any case they make a bit of money, pad out the CV a bit and move on. I wouldn't got so far as to say they're defrauding investors


It depends what your goals are. If your goals are to create a source of income (profit) for the foreseeable future then VC money is antithetical to your long term viability. Taking VC money means you're locked into continually delivering on growth.

To be fair, Rus becoming the CEO was tragically unplanned.

Did you read the WSJ article? https://www.wsj.com/articles/the-tech-whiz-behind-vine-and-h...

The reporter basically insinuates that Rus had been aggressively trying to undermine and get employees to turn on Colin for a year and leaves an open question on whether stress resulting from their toxic relationship contributed to him increasing his drug usage.

Basically, it was maybe not a complete accident unrelated to his work.


Media companies can most certainly be massive multi bil companies. There is a reason why telcos are buying up media companies (e.g. ATT buying Time Warner/HBO and Comcast buying NBC) and some of the richest billionaires are media tycoons.

I think HQ is on the right track but I don’t see the current team being the right team to turn it into the next big media play. The future of live TV should be heavily interactive.


The point wasn't that they can't be massive companies; the point was that they are hard to scale. What works to get to one audience, or to build up to one size, doesn't mean you can throw money at it and "just" grow bigger. In fact, you're saying that when you say it's the wrong team to turn HQ into the next big media play.

European here: I haven't even heard of HQ before in my life, or at least I have no recollection of HQ and their game. And I want to believe I am 'close to the Tech sphere' and read the news daily. If HQ wants to be the next massive media company (in my mid these are Warner Bros, YouTube, Netflix, et al), good luck to them. From this article I foresee a slow and painful demise of HQ. You can have the best product of the planet. If the CEO/big boss/leader is a prick, then doom is inevitable. Everybody will hate their jobs/lives and they will hate (ofc) you, the CEO. And everyone with a half-good idea will run off somewhere else.

That hasn't stopped Oracle or Zynga from clinging to life like a highly malignant tumour.

I wish that were true.

> There is a reason why telcos are buying up media companies

The other way to read that is that there's a reason telecoms are buying media companies and not the other way around. Media companies are cheap, and they give ~cable companies competitive advantages (or another gun in a Mexican standoff) through vertical integration.


I remember a previous post saying that the Host Scott Rogowsky would have an extreme pull in the company and would present a big risk if he ever left the company. I guess this company could try to pivot onto someone else but I'm not sure they have the ability to do so. (they cite themselves in the article)

Calling it here.

Rugowsky will end up leaving the company and be given his own Jeopardy-style trivia show by Amazon.


The company already severed ties with Rogowsky. His last hosting appearance was three weeks ago.

Or maybe even Jeopardy! itself, given the recent news about Trebek. Unlikely, but possible.

I think he could handle Jeopardy sure, but I'm not sure the venue gives his talent the place to truly shine. If he inserted the comedic portion of his talent then Jeopardy would kind of become a different show, while not doing so would lose the quality that make him such a compelling host.

I was thinking he could just get a few devs to copy where he worked at. He probably has enough domain expertise to do so and he could use the other app as a refence.

I wouldn't be surprised. The host would appear to be the likable face of the company, and with the current CEO being a prick, he would be the preferred choice for the cover page. Lorne doesn't appear on every episode of SNL, Kenan Thompson and Kate MacKinnon are. (I do NOT imply that Lorne Michaels a prick)(but a business needs to use the faces that will market the product service better more effectively)

Lorne Michaels is pretty famously a prick, though.

Indeed, several movie villains were infamously modeled after his mannerisms -- including Dr. Evil from Austin Powers.

https://en.wikipedia.org/wiki/Lorne_Michaels#In_popular_cult...


The company has been diversifying hosts and games for awhile now. I never thought the success of the company was going to or should ride on him alone.

The other hosts are pretty meh, TBH. Scott is pretty charismatic and I think has a lot of power because of that.

Edit: I see now that Scott is no longer hosting. That’s a shame IMO, he was a big reason why I personally liked the game. Oh well.


I thought HQ was incredibly polished when it launched. Props to the tech team regardless of the management mess.

It had terrible lag issues though for quite a long time after release.

I didn't know their old CEO died of drug overdose...wow! That's crazy to think... bad luck? I wonder if VCs have C levels take any drug tests or carry pretty thorough background check on founders who they invest into?!

Drug use is rampant in silicon valley. You wouldn't be a very successful investor is drug use was a disqualifying factor.

Of course it depends what kind of drugs. Potheads don't make very good CEOs and Cocaine is usually associated with destructive behavior. A lot of people in tech do the occasional hallucinogens or ecstasy without much issues.


Has there ever been a large scale, well controlled study evaluating CEO performance under the influence of THC/coke/anything else vs. sober? Absolutely not, because as you say, these are only baseless behavioral associations to character flaws.

If you are concerned about character flaws, evaluate that directly. Failing a drug test ruins peoples lives worse than smoking that joint ever did, and there are plenty of terrible people who've been sober all their life.


They say Donald Trump doesn't drink — which is surprising when you think of his reputation as a womanizer.

I seem to remember an article (maybe TC?) citing low-dose LSD as a trendy drug in SV to spur on creativity etc.

Edit: couldn't find it on TC, but here's a link to the same think from HuffPo: https://www.huffpost.com/entry/microdosing-lsd-placebo-study...


> I wonder if VCs have C levels take any drug tests or carry pretty thorough background check on founders who they invest into?!

A basic due dilligence on the company, yeah

But that seems like a very nice way of a VC getting shut out of multiple potential deals


I think a mental health evaluation would be more prudent from the VC than a drug test. If they are struggling with addiction then that would come out in the mental health screen with the therapist, and instead of being denied opportunity during a fragile time of their life, they might actually get the help they need without ruining their life and finding themselves unemployed due to a failed drug test.

Huh? There's a political battle for CEO in a multi million dollar startup and then the very new CEO dies on a drug overdose and nobody talks about possible murder?

Why was this downvoted? At least in the TechCrunch articles that option wasn't even mentioned.

Because the police have already examined his death and concluded it was not suspicious. Ignoring that and posting speculation would be pretty reckless.

Also a funny side note: Why do people who seemingly care about public opinion so much always screw up their public opinion? I'd argue torturing people is more in their interest than actual public opinion. With the latter they just try to stay above zero as long as possible to continue with their actual addiction, getting hard-ons from watching people suffer.

That's also why such people can under no circumstances really succeed with businesses. It's not the same kind of personality as Steve Jobs for instance. Jobs also hurt people, but the goal was always to increase public opinion and make money.

The differences between a sociopath (Jobs) and a parasite (this dude here).

And knowing that he's a parasite and not a sociopath, why keep him on as a CEO? The secretary or toilet cleaning person would have a lower chance to screw everything up.


> Also a funny side note: Why do people who seemingly care about public opinion so much always screw up their public opinion?

Its more common than you imagine.

Its incredibly clear that the CEO dude is super insecure person who feels some kind of inadequacy and a constant need to control everything. If you read the daily beast article showing the actual interaction, it shows. If he stopped thinking all about himself for a little while he could have done a much better job. But he has so far not faced consequences for his toxic behavior (his co-founder sounds shady af too and that person actually died of a drug overdose... what a mess).


+1

And on top of that, he probably thinks that thing that what got him "here" will also get him "there".

Maybe being vocal made it to the first mile so if he continues his act (and get louder) he believed it would get him to the finish line (the one he has in his mind).

One f-bomb makes a comedy. A thousand make zero ratings and lawsuits. He didn't realize he crossed the line being a sociopath and making is increasingly difficult to receive the messaging.


Apparently the other founder had some harassment issues in the past too.

http://fortune.com/2017/12/20/hq-trivia-losing-investors-sex...


Lots of drama here, but the real problem was obvious from the start: no path to making money. They literally gave it away daily. Anyone with half a brain could see where this was headed.

The app typically shows 350k - 500k participants in their nightly shows. They're giving away usually $5000.

Jeopardy and Wheel of Fortune have around 10 million viewers each with over 30 years of history. Jeopardy gives away around $23k each day, I believe WoF rings in a little higher. They air 5 days a week and clock in around 200-230 episodes per season. Back of the napkin math puts that at $0.53 per viewer per year.

HQ is still at $4.29 per viewer per year. At their current rate they still need about 10x growth to match J! or WoF. But HQ is also only 2 years old on a somewhat new media format (live interactive entertainment).

Those numbers are just for the prize money. Pat Sajak and Alex Trebek each earn north of $10 million per year (and Vanna White somewhat less, but still in the millions), and the shows almost certainly have larger staffs. The actual value difference is probably closer to a 3-4x multiplier rather than 10x.

That said, since HQ is phone based there's a good chance the viewers are more valuable to advertisers since they can collect more information than on broadcast television.

I don't think HQ would/could have a path to profitability (setting aside internal business politics), but it's a matter of 1) convincing businesses that a new media format is worth their advertising dollars, 2) keeping players long-term, 3) finding effective ways to advertise in the more limited format that the game affords.


And as it relates to cost per viewer, HQ doesn't scale well. Doubling or tripling their viewership would result in winners getting paid significantly less, thus decreasing the appeal and losing viewers.

While scaling prizes with viewership will keep the same approximate cost per viewer. They'd need to scale advertising rates/sponsorships faster than both in order to beat this curve, but I don't think a doubling of the audience will result in more than a doubling of the ad prices.

The could do more ad spots per show, but again that risks alienating viewers.

They could make the trivia questions harder, thus keeping prizes larger and mitigating the problems with low prize amounts, but the difficulty increase also risks alienating viewers. It's much less fun to play when you get only 3 or 4 rights and feel you have no chance of actually winning.


> They're giving away usually $5000.

They are now closer to 1000$ per show.

> That said, since HQ is phone based there's a good chance the viewers are more valuable to advertisers since they can collect more information than on broadcast television.

The viewers are also the players. Cash cows are what makes mobile games so profitable and theses cash cows only care about being the best, not about how much they spent to be. You can buy 3 lives on HQ for 10$, so essentially, some cash cows can be worth 10$ a day easily (at least 3$ per game).

HQ also is made AROUND ads and not ads break. They do have ads before the shows, but I'm pretty sure their real money maker is the bigger ads made into the quiz themselves.

They can be easily profitable based on all that.


Gameshows have given away money with ad support for decades.

Made sense on syndicated television for a generation that grew up on that medium.

This article is gross. Very one-sided, no attempt to paint an objective picture. If someone did this about a person, it’d be scummy, but about a company it’s okay?

I am sure the company is messed up, but come on.


Companies aren’t people. I think a lot of people are curious about what happened to HQ trivia, and I think it’s sad that the company seems to be falling apart.

(Ps, I think The Witness is one of the best games ever made and everyone should buy it)


HQ as a whole and Yusopov in particular refused to comment on the story. Instead it's left with multiple employee accounts. It may be one sided in that it conveys mainly the employee point of view, but when that point of view represents at least half of all employees (more than half signed the letter to oust Yusopov) then it would seem to have a fair bit of credibility.

Hard to not make it one-sided if the other side is not willing to comment. As long as the article writer gave the other side ample chance to comment, it's on them if they didn't.

At this point, why wouldn't you just quit? I get that there's equity on the line, but the average tenure is probably around a year (if that) given how new the company is. It was clear from the WSJ article on the drama between the two founders up to the other one's death that the current CEO is a textbook sociopath.

Convinced the only reason why talented rank-and-file employees would petition instead of leave is because we live in a world where we're all expected to become grossly emotionally attached to our work, despite how toxic work environments can be.


Because you need to pay the rent?

Seriously, this is the risk aspect of working for a startup that people seem willing to ignore when justifying VC getting preferential treatment to employees.

If you have a non-C-level job at a startup you likely need that to pay your rent, to buy food, to have health insurance (become HI system in the US actively fights freedom of employment).

The best you can do is delay while you find jobs elsewhere, as the article said the people who had an easy time working elsewhere have already left - the first step in employment in tech is to know people at other companies so you can skip the randomness of standard recruitment. I cannot imagine that the remaining people in this startup aren't actively searching for or negotiating new jobs.


I think this is a special situation. Everyone at HQ is mid-career, ex-FANG, almost certainly all have a decent level of savings and could likely find another job pretty easily.

yeah, 100%. not everyone can just bounce or put up with a significant amount of downtime between jobs. But still, a petition is a terrible idea in a startup. Its just going to make things worse.

> If you have a non-C-level job at a startup

even C-level people need to pay their rent, especially in early stages where its likely the founding c-team is likely compensated mostly in stock.


Being compensated mostly in stock would make it easier to leave if you are just worried about paying rent.

I guess what you're trying to say is that "if you're being paid mostly in stock then you're earning so little cash you're not really losing much cash if you quit".

This is a fundamentally incorrect assessment. If your cash salary is lower it is harder to leave the company. Being able to leave a company without a replacement job lined up requires having enough saved cash (not unsaleable pre-IPO stock), but if you're being paid less cash you have less to save after paying rent.

Put very simply, you're interpreting a "low cash income given actual market rates" and "no cash income" as being somewhat interchangeable. Hopefully when phrased that way it should be obvious why that isn't the case if you have mortgage/rent/healthcare to worry about.




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