It’s No Secret Why Anonymous App Secret Failed-Their CE(N)O David Byttow
April 29, 2015
Secret, Inc. CEO David Byttow’s LinkedIn page
*CE(N)O Is an extremely underqualified (usually) startup CEO who previously never held an Executive position (or management position)* hand selected by investors or VC’s who purposely create unobtainable goals based on hypergrowth sales for a quick ROI while exploiting and manipulating the gratefulness of a startup CEO who is so desperate to prove their ability to the investors and the startup community that engaging in unethical and illegal activity is often not only encouraged, it’s replicated and rewarded from the top down. Startup executives blinded by millions, billions, and with reputations at stake will manipulate facts pathologically to the detriment of patients, consumers, employees and taxpayers all in the name of profit and ego.
This site has often said in 2015 we’re going to see CEO’s from the startup world either end up unemployed or possibly behind bars for fraud. Acclarent, a medical device startup out of Menlo Park, CA recently indicted their former CEO Bill Facteau and VP of Sales Pat Fabian on 18 counts of fraud.
Despite the tech startup bubble popping more than five years ago VC’s still lined up to give fistfuls of cash to the underqualified such as David Byttow and Chrys Bader the founders at Secret, Inc. The dynamic duo of doom managed to raise and blow through $35 million in 10 months with a company valuation of $100 million-now worth $0.
“Secret does not represent the vision I had when starting the company.” (Bywott) The news comes 10 months after the company raised $25 million from marquee investors at a valuation of $100 million. In all, Secret raised $35 million from the likes of Kleiner Perkins Caufield & Byers, Index Ventures, Google Ventures and Repoint Ventures. Forbes
Their platform was already created, they had no hard cost production (like in startup medical device) all they were tasked with doing was creating a revenue stream to drive user utilization; but, like most startups a sustainable sales model which takes longer isn’t the goal a hypergrowth sales model (think Uber CEO Travis Kalanick) that inflates false (unverifiable) projections in order to entice additional investors or purchasers is the goal. The current valuation of Uber is $40 billion and in comparison an established company like Johnson & Johnson who produce actual products (about as ethically as Uber) is over $60 billion.
Except Byttow and Bader it appears took a page from Foursquare/Swarm CEO Dennis Crowley who raised over $160 million and has nothing to show for it but two useless under-utilized apps. At least Secret’s investors were smart enough to pull the plug not sure what Crowley’s investors are waiting for but they’ve been waiting a long time.
Last summer, employees at the start-up Secret gathered in their new offices in downtown San Francisco, waiting for the founders to address the company. Secret had recently raised $25 million to work on its smartphone app, which lets users anonymously share information with groups of friends and connections.
But the news had broken that David Byttow and Chrys Bader, the founders of Secret, had sold part of their stake in the company for $6 million and that Mr. Byttow later bought a Ferrari. The founders did not initially tell the employees about the sale; instead, some of them found out on Secret.
I guess the vision David Byttow had when he started the company was not to create profit, take $6 million from investors and buy a Ferrari. So sorry to hear his vision is no longer represented. Yep never a good look when a major investor or CEO (who didn’t initially invest in the company) pulls out cash-nothing says solid investment to employees and investors like the CEO dumping shares: Insider Selling: Intersect ENT insider CEO Lisa D. Earnhardt Sells 19,318 Shares of Stock (XENT). Earnhardt’s remaining stock valuation is $16 million.
It’s cute though the way Byttow #PRSpin tried to make it seem like it was his idea to close the doors but #PRSpinUnSpun it was “decided” for him.
“After a lot of thought and consultation with our board, I’ve decided to shut down Secret,” Mr. Byttow wrote in an online post on Wednesday shortly after BuzzFeed reported that the start-up would close. He said he would wind down Secret over the next few weeks and would return money to investors. “I believe in failing fast in order to go on and make only new and different mistakes.” The New York Times
Great look for another CE(N)O to add serial entrepreneur to their bio. Hopefully investors (and certainly taxpayers) are no longer blinded by the millions/billions of valuations and start to seeing this industry for much of what it is-fraud.