Snapchat Has Been Faking Growth Numbers, Ex-Employee Alleges
variety.com
variety.com
The General Allegations reads like the synopsis of a Silicon Valley episode.
That would be the problem for me if I was an investor. What other types of liabilities does this firm have? They seem to have management that is unable to control themselves how can I be sure this is a isolated case and not standard operating procedure?
"Oh, THAT guy? Ya, he's just angry we fired him because he's an idiot and has no idea what the numbers we were showing him even meant." - quick guys, let's find a way to fix or bury those numbers we showed him!
"2X successful founder"... looking on Crunchbase, he founded Digiforce "acquired" by Strategic Link partners. digiforce.com directs to some random japanese site and the Strategic Link site looks like something made from a (bad) wordpress template. I almost wonder if he made up a company to acquire his company.
Next, no way Facebook hires someone like that to lead "THE" growth team for pages. Maybe as an entry level PM or something. He was only at facebook for 1.5 years, which also makes me skeptical he was such a high priority hire for Snapchat.
Sounds like a bunch of hot air and resume puffing to me. My guess is that Snapchat realized he had an overly active imagination and had taken liberties with his resume.
There is coverage of him pitching: http://upstart.bizjournals.com/companies/hatched/2013/03/25/...
And coverage of the acquisition: http://www.bizjournals.com/triangle/news/2014/01/02/apex-tec...
Anecdote: it takes surprisingly little.
Back in the day, when I was a fresh faced 20-something - and, like now, a complete nobody as well - I joined a fun, pretty unknown, startup and had my photo and bio published in the physical magazine of the time.
This happened because one of their journalists knew our CEO, and they thought it'd be a fun "welcome to the company" for me.
>digiforce.com directs to some random japanese site
It could be that the brand digaforce wasn't valuable to strategic link partners & they let it go.
> the Strategic Link site looks like something made from a (bad) wordpress template.
Their target market looks like military and law enforcement. You don't necessarily need shiny marketing to sell to the land of powerpoint: personal selling through established contacts works. Ex military stick together because of how bonds were forged.
>I almost wonder if he made up a company to acquire his company.
Are you suggesting he invented strategic link partners? This is probably pretty easy to validate as their management is well documented on their site - all ex military.
>Next, no way Facebook hires someone like that to lead "THE" growth team for pages.
You've built the next step of your argument assuming your previous allegations are true.
>Maybe as an entry level PM or something.
Is what you argued previously about his character true or not? If he was fraudulent (i.e. inventing companies etc.) then Facebook probably wouldn't hire at all (or he'd get washed out pretty quickly).
> He was only at facebook for 1.5 years, which also makes me skeptical he was such a high priority hire for Snapchat.
His allegation says that Snapchats intent was to gain confidential information about Facebook. Does 1.5 years matter in this case? Recent information is what's key here.
> Sounds like a bunch of hot air and resume puffing to me.
What are the facts we know for sure? He worked for Facebook. He was involved in some startups. He is ex military. He was hired by snapchat briefly and fired.
>My guess is that Snapchat realized he had an overly active imagination and had taken liberties with his resume.
Have you read his complaint? He alleges he was calling out snapchat internally on misrepresenting metrics to prospective investors - and they fired him for it.
What's more likely? He faked his way into Facebook and survived 1.5 year, generated enough demand to get noticed by Snapchat and then jumped to snapchat only to be found out to be completely incompetent in three weeks?
Or... his military / honour based mindset got him in trouble when he saw things happening in snapchat that were at odds with his value system.
There is definitely smoke here in my opinion. You have to be grossly incompetent to get fired within three weeks. If he did manage to fake his way into Facebook then he does have a level of competency. To me, it doesn't make sense that he'd screw up and get fired in three weeks. Especially given his military background.
Does this make sense?
Agreed. grossly incompetent
If you were a fraudster, you'd just go along with it ;-)
Based on the last link in the bhouston comment nearby: http://www.bizjournals.com/triangle/news/2014/01/02/apex-tec...
I only kept in limited contact with him after he went to Facebook, but from my experience with him in Raleigh, he's a stand up guy. I'm inclined to believe his story, because if he was incompetent he wouldn't have run FB's growth for several years before going to Snapchat.
Not saying his lawsuit isn't legit, but I wouldn't take this as a sky-is-falling for a 2017 IPO.
Also, it is well known now that Reddit's initial userbase was all fake - so does anyone know what the appropriate way to report this to customers is?
This may not be a completely equitable comparison (Facebook has far better brand equity and a longer history of trustworthiness than Snap at this juncture), but I think it's illustrative that this may not have the "sky is falling" impact we would otherwise anticipate.
You will very likely see FB being pressured to open up to more third party validation of what they claim about their ad inventory at least for big advertizers who put in 10s of millions of dollars into FB advertising.
[Conway's law]
So if Snapchat is what Snapchat Inc designs then I'm not at all surprised if the initial communication structures turn out to be of the alleged kind.
I mean Snapchat is a shallow concept promoting short-term thinking and used for boasting :D
It's like Facebook - just worse. Facebook is almost academic in comparison - you actually have to write things.
“Michaels said the information was withheld pending a determination on whether it is covered by a confidentiality agreement. It is possible that that portion of the complaint — which appears to contain a detailed account of Pompliano’s brief tenure at Snapchat — could become public.”
Sounds like a thinly veiled threat to strongarm Snapchat into a quick $ettlement.
The sentence before the one you quoted explained the straightforward legal process by which unredaction may be authorized. A judge decides if this is officially released. Not the plaintiff.
Which might be a fair perspective, but I think OP should point that perspective out ahead of time in the future. Maybe by instead writing something like this: "Like every engagement with the legal system, this sounds like a thinly veiled threat..."
Being explicit makes clear that one thinks that it isn't anything specific to the case that makes it a threat - it's just the fact that the legal system has been invoked.
But regardless of whether they are misquoting some of their growth numbers or not I think even without that they are going to have a difficult time with their valuation and IPO. They are already at $25B in the private market and with an IPO investors would be hoping for at least $40-50B. To justify that price just look at some of the companies in that range and the amount of revenue and growth they have in order to justify it.
Snapchat is not a ubiquitous service like Facebook so ultimately it's going to be in a category somewhere between Twitter and Instagram.
Instagram has one of the easiest on-boarding processes and with their static stream from friends that are now directly hooked into FB you are immediately immersed in what the experience is. Snapchat is a bit more complex.
Regardless to justify a $50B valuation they are going to need a substantial revenue growth story with no hiccups. And they are ultimately going to have to prove out to about $2.5B of revenue in 2017 which is impossible.
Comparatively speaking FB IPO'd for $100B in 2012 and had $5.2B in revenue for that fiscal year and also don't forget that it lost about 30% of it's value after IPO before rebounding substantially and their revenue growth and profitability has been world class.
So I'm not looking at Snapchat with a commentary on it's product, but simply from a financial perspective and it's hard to create a story that validates their $40B-50B IPO target that they are most likely shooting for.
I work/live with the supposed 22 deals. Only 1 of these 22 deals has been paid (100k checks). The only one that was paid was paid after the founder threatened to go public with these numbers.
Look into his firm and ask around in the raleigh area. 21 unpaid checks.
Maybe storytime won't always be sufficient to run a business.
According to the complaint from Anthony Pompliano: When they were trying to hire him Snapchat said they would hire 40 people under Pompliano for his growth team. Based on this promise he left FB to join Snapchat. He then found the numbers they were touting were not accurate and they were not committed to what they told him.
When the complaint gets to what happened starting the day Pompliano was hired and more specifically what happened when working there, it is blacked out for the next 8 pages.
After those pages it says he was fired after 3 weeks and Snapchat told employees, media contacts, and a company looking to hire Pompliano he was fired for being incompetent. This misrepresentation has cost him his reputation, money, etc.
Source: https://www.totaljobs.com/careers-advice/money-and-legal/ref...
still I have seen developers gone in a weeks time, some voluntarily
I would summarize the complaint as:
Snapchat hired this guy from Facebook. He claims Snapchat falsely represented their growth during the process (two metrics which are redacted turned out to be false.) After he joined, he alerted the VP of finance that some of Snapchat's representations were false, who apparently agreed with some of it and told their VP of Comms to stop representing that to advertisers and some redacted group. He thinks that Snapchat fired him because of this, that they thought he would "blow the whistle" on upcoming IPO. Further, Snapchat continually pressured him to breach his confidentiality agreements with Facebook. After he was fired, Snapchat told people internally and externally that he was incompetent.
In the details, a lot is redacted but it mentions there were specific metrics given to him in the hiring process - that were also given while raising capital in Asia - that were false.
You cannot possibly know if a technical employee (at this level) is incompetent after just 3 weeks. Not possible.
It's the same as firing a CEO 3 weeks into the job... It doesn't make any sense unless that CEO did something blatantly illegal/dodgy during those 3 weeks.
The reality is you won't know how good they are until at least 6 months in.
As an engineer, 3 months is the absolute minimum amount of time I need to figure out if I'm a good match for a company.
You may be assuming a baseline competence, though.
I've interviewed many alleged senior developers who talk a good talk, can tell you the full ASP.Net page lifecycle without missing a beat - despite (possibly sometimes in spite of) not being asked - and when it comes to actually coding show their utter incompetence in seconds flat.
I'm not being elitist here; they'll do stuff that's just plain weird, like only using strings in C# - no other datatypes, only strings - or if they claim database expertise, create tables with only text columns, no indexes, and storing an integer primary key also as a text field.
At any ability level above this, I'm kinda with you; just take into account there is a very real world of sheer utter incompetence out there, and I doubt it's limited to technical employees.
Case in point, this morning I interviewed a 'senior' C# .NET developer with over 10 years' experience - and yet she didn't even know the syntax for using lambda expressions, was barely able to get started with linq, and was unable to tackle a basic string splitting problem. Oh, and she couldn't do fizz-buzz.
I was interviewing for a position in India; I just use such basic tests as a filter, so I can quickly weed out the wrong kind of candidate. See my other comment here for more: https://news.ycombinator.com/item?id=13327100
If I see a technical candidate resume that has a long stretch (5+ years) at the same company and that company isn't primarily a technical one, huge red flags go up because the previously mentioned 'Senior' candidate is who generally come out of these situations. IF I get past their resume they're going to spend a lot more time telling me how they stay up to date with the world than a candidate otherwise would.
If I see a technical candidate resume that has a long stretch (5+ years)
at the same company and that company isn't primarily a technical one,
huge red flags go up
I do extremely basic programming tasks (no more difficult than fizz-buzz) to quickly weed out that sort of candidate.
There are certainly major failures possible in 3 weeks for which the optimistic explanation is gross incompetence, and the pessimistic one is gross misconduct.