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Social Network No One Knows about Valued at $6 Billion: The Sociopathic Business Model™

Social Network No One Knows about Valued at $6 Billion: The Sociopathic Business Model™

July 10, 2014

File this one likely under: Gods of Fraud

Cynk

Today it was reported by WSJ Tech:

One-time penny stock, Cynk Technology, which is up more than 100-fold since mid-June, bringing its market capitalization to more than $6 billion on Thursday. Yet the self-proclaimed social network has no revenue, no product, no assets and one employee.

Valuations are like unrealistic sales projections on crack.  No revenue or revenue stream and no product=dead in the water.  But all hail Zuckerberg and Parker who are the tech industry gods among mere mortals.  Again gods of fraud but people are blinded by the billions.  And all those little boys who want to grow up and be gods of fraud, like Dennis Crowley, FourSquare CEO take note. If his ‘sorry not sorry’ sense of entitlement tone about his wife’s fraudulent DIY bib at the Boston Marathon is any indication FourSquare is or  is well on it’s way to operating under The Sociopathic Business Model™.

Dennis-and-Chelsa-final

 

The-Sociopathic-Business-Model™

For all that’s good with startups, innovation in medicine, technology and overall making our lives better; unfortunately, there is also a dark side to startups that’s often overlooked because millions or billions are at stake.  Remember one of the major differences between a startup (goal to show profits and growth quickly in order to sell)  and an established company (to show profits through sustainable growth) represent two very different business models.  Many startups do not think about revenue stream or sustainability.

Foursquare has a serious branding problem.  And not one that can be solved by someone with the title of Grand Wizard or just any idiot on the internet that calls themself a ‘branding expert.’  First there was no revenue stream in the original build out of Foursquare it was just a (“Hi I’m at this bar) app and now they want to be Zaggots guide?  They don’t know their customer which is one of the main reasons a startup fails.  If they expect to fix this for their investors it’s time for some egos to be checked at the door and bring in talent.  Insecure CEOs tend to feel threatened by talent and the company suffers as a result.

Keep trying!

Funny jumping GIF

And from Business Insider:

Sources both in and around the company say the negativity is starting to take a toll on investors and employees. Morale is low and employees are looking for ways out. Investors have been patient but in recent weeks, that patience has worn thin. And the company’s leadership isn’t doing enough to put fears to rest.
Crowley, who has always shared a lot about his personal life online, is continuing to do so despite his company’s struggles. While his twitter feed is made up of a lot of Foursquare content, it’s also dominated by pictures of Crowley running, relaxing or vacationing with friends. To some, it seems inappropriate.

“I think he lacks self-awareness which is the issue ultimately,” one person said of Crowley. “You don’t tweet about all your travels when things are hard. I’m not saying he isn’t deserving of a life but keep it private.”

Perception is reality (comments section)

Dennis Crowley the selfie obsessed CEO and his social life are a huge problem. It’s one thing to live the life after you exit. It’s another to constantly post about traveling and heading out to East Hampton, running in the Boston Marathon and defending wife’s unethical activity while everyone else is still waiting for their pay day and putting in the work. 

Founder quit – check

Design team quit – check

CEO wrong fit for challenge – check (that’s an opinion)

CEO lacks self-awareness-check

Couldn’t raise $ – check

Service jumped shark – check

Employee morale at all time low-check  (Hey we  saw that with employees at Grooveshark earlier this week)

Dennis Crowley CEO FourSquare Rebuffing Sales Offers Tech Crunch

That’s weird because I don’t know six people who use FourSquare-so are those actual “people” checking-in or “bots” who fake like on Facebook?

According to Tech Crunch:

Crowley said that revenues at his startup grew 600% in 2013, and in the first quarter of 2014, they were on track to be up by 500% compared to Q1 of 2013.

Crowley didn’t give concrete numbers, but doing some back-of-the napkin math, and assuming linear growth, that gives Foursquare 2013 revenues of $14 million, and Q1 2014 revenues of $21 million (based on the widely reported figure of Foursquare making just $2 million in 2012).

And we’d also have to assume that this CEO was in fact telling the truth about the growth.  Tech Crunch really seems to be sold; but, again fact based evidence over time is a good predictor of the future.  There are some signs The Sociopathic Business Model ™ could be in play at FourSquare.  Guess it’s a good one to watch and it might not be bad for the SEC to start looking at startups earlier rather than later in the process.

Foursquare’s been a rumored target for a number of tech companies in recent times, so how much pressure does Crowley feel to sell? “We’ve had plenty of opportunities to sell the company and we turned them down, a number of times,” Crowley said. “What we’re doing is not a sprint from A to B; it’s a marathon.”

And to employees in tech remember the difference between common and preferred stock; and, an IPO filing could just be a strategy to drive up the asking price. Feel free to visit the WSJ Tech story on Cynk and run it through The Sociopathic Business Model™.  I don’t think anyone will be too shocked at what they read.

 

 

 

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