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Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

blog.bootuplabs.com

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Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#41

Post by cperciva »

jacquesm wrote: post #39
cperciva wrote: post #34

Earlier quoted context omitted.

As long as Bootup Labs is a silent investor (and AFAIK they don't take board seats), why would future investors care?

The investment world is pretty small, especially in Canada. Getting an investment from a company that is second rate immediately qualifies a startup as second rate, as though you've tried the more serious outfits and finally had to resort to 'plan b'. Just like having kpcb (I know they're not Canadian, and not exactly angel investors, just to illustrate the point) on board is an automatic stamp of approval, the rever…

Getting an investment from a company that is second rate immediately qualifies a startup as second rate [...]

Interesting -- so really it's just a signaling exercise. That makes sense, given how poor investors are at directly measuring quality.

Thanks for the explanation! One of the things I appreciate most about HN is the willingness of experienced people to provide this sort of insight to us newbies. :-)

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#42

Post by cperciva »

chegra84 wrote: post #13
dannyrobinson wrote: post #10

Earlier quoted context omitted.

You're right! I will continue to work with everyone involved. Another accelerator was interested in possibly taking Status.ly in for their summer program, and I let Jamie know.

Your equivocal words aren't going to help-"Possibly". And, they don't need the money couple months from now; they need it now.

I think at this point Danny has learned his lesson about not promising more than he can deliver. If he was contacted by another accelerator which said that they might be interested in taking Status.ly, he's exactly right to say "possibly".

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#43

Post by jacquesm »

cperciva wrote: post #41
jacquesm wrote: post #39

Earlier quoted context omitted.

The investment world is pretty small, especially in Canada. Getting an investment from a company that is second rate immediately qualifies a startup as second rate, as though you've tried the more serious outfits and finally had to resort to 'plan b'. Just like having kpcb (I know they're not Canadian, and not exactly angel investors, just to illustrate the point) on board is an automatic stamp of approval, the rever…

Getting an investment from a company that is second rate immediately qualifies a startup as second rate [...] Interesting -- so really it's just a signaling exercise. That makes sense, given how poor investors are at directly measuring quality. Thanks for the explanation! One of the things I appreciate most about HN is the willingness of experienced people to provide this sort of insight to us newbies. :-)

I detect a note of cynicism there.

Some investors are much better than others at judging the quality of the companies they are looking at, but plenty of them are looking at being the 'second' firm to invest after a 'name' is on board, since that dramatically increases the chances of success of that company. Of course every VC dreams of discovering that unknown nugget, but sadly there are plenty that are not able to separate the wheat from the chaff on their own power, so they look to others as a source of guidance. That's also why you'll see a slew of 'copycat' companies getting investment if a company in a certain league grows big. For instance, when Youtube exploded on to the scene there was a flurry of similar offerings backed by a very wide range of VCs, all of them trying to get a slice of the pie after the concept was proven. Some of those would have turned down youtube if it had been offered to them only a few months earlier.

Take Y combinator as an example. If a startup with a crappy product is invested in by Y combinator versus some unknown angel investing in a fantastic product then when shopping for a second round simply having Y combinator on board will open lots of doors and will probably lead to a quick second round at a fair valuation even if the product was bad and a quick and violent ending for the start up that was funded by an unknown. Having a great product and a great team is unfortunately not enough to always secure funding, having a partner with name recognition on board significantly increases your chances. Even if in that scenario Y combinator would not be 'working the network' on your behalf.

Having your wealthy great uncle as an investor will not do much in this respect.

This is sad but really true. Ideally every company should be investigated and judged on its merits, but the number of deals presented to some groups leads to weird shortcuts like this. And it would be even sadder if that meant they miss out on great opportunities, the fact is though that it even works. It is a self fulfilling prophesy, some 'name' is already in, company gets round 2, maybe scores big in the longer term vs company does not get round 2 and dies.

Looking back the VC that didn't go with the company that died will feel they made the right decision.

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#44

Post by jacquesm »

pavs wrote: post #32
stretchwithme wrote: post #27

Earlier quoted context omitted.

I love it when the shady and duplicitous finally realize they can no longer hide the facts and then apologize as a last resort.

I think this is a tricky situation. Lets say for the sake of argument that they honestly handled the situation _unbelievably_ wrong as opposed to being deliberately shady. They realized, right before the blog post, they needed to communicate better with everyone. How differently should they have handled it other than what they wrote in the blog post? I should acknowledge that my knowledge about the situation is only…

For starters they could offer to compensate those wrongfully booted out because of their failure for costs incurred.

That would go a long way to showing they really care about them, instead of just about their own reputation.

I see this as a salvaging operation, probably at the instigation of the new investor they've found, a way to use the fact that they are in the spotlight to do a cheap 'mea culpa' while getting as much mileage out of it for their own shop. There is no such thing as 'bad publicity', especially not if you can spin it to your advantage by showing what an upstanding guy you are by apologizing in public. But words are cheap.

Maybe I'm too cynical here, but really if they did anything over and beyond simply saying stuff I'd be a lot more convinced this is heartfelt.

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#45

Post by jacquesm »

dannyrobinson wrote: post #10
chegra84 wrote: post #9

Danny, Words whisper, Actions scream. In order to combat this situation, offer the cut teams tangible help. And, don't let it be something like:" If I could help in anyway!" Jesus Christ man, you already know how you could help; these guys need money. Use your connects to link them with some angel investors/ VC. After, this am sure everyone would forgive and applaud you. And the publicity and the goodwill gained goes…

You're right! I will continue to work with everyone involved. Another accelerator was interested in possibly taking Status.ly in for their summer program, and I let Jamie know.

So, how about you pull your checkbook and compensate those guys for ripping their lives up on your promise?

That seems to be the least you should do, given that you've 'seen the light' and realize how badly you f'd up.

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#47

Post by jacquesm »

gojomo wrote: post #40
alexro wrote: post #26

Earlier quoted context omitted.

And the first thing they said was : "you must be grateful for all we did to you". Screw them

Jamie Martin: "I just wanted to add that I have no hard feelings for Bootup Labs, for Danny, Boris, or anybody we met, I don’t think it’s anything intentional they did. But there are lessons to be learned from what happened from our situation." Funny and sad that the commenter lynch mob has a lot more righteous anger -- "Screw them" -- than the people actually involved.

I think he's highly professional in his stance, if I were him and I were angry I wouldn't let it show publicly either.

The rest of us don't have anything to lose here, having an investor bail out that far in to a deal is as good as being shot down, there is no way they could have survived it. Also, your sample size is just one individual out of all the founders that got axed, so not 'people', but person.

How the rest of them feel is any body's guess.

We, collectively can put a fair amount of pressure on boot-out labs, more than Jamie could at this point in time, he hasn't got the money to sue them (I'm fairly sure he'd have a case), but even if he had the money to sue them it won't look good on your future resume if you go and sue a former investor.

The right way to handle this would have been to reverse the deal and to compensate all those wronged by it, there are plenty of ways that could have been done.

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#48

Post by chegra84 »

cperciva wrote: post #42
chegra84 wrote: post #13

Earlier quoted context omitted.

Your equivocal words aren't going to help-"Possibly". And, they don't need the money couple months from now; they need it now.

I think at this point Danny has learned his lesson about not promising more than he can deliver. If he was contacted by another accelerator which said that they might be interested in taking Status.ly, he's exactly right to say "possibly".

My point was to get something more solid.

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#49

Post by gojomo »

jacquesm wrote: post #47
gojomo wrote: post #40

Earlier quoted context omitted.

Jamie Martin: "I just wanted to add that I have no hard feelings for Bootup Labs, for Danny, Boris, or anybody we met, I don’t think it’s anything intentional they did. But there are lessons to be learned from what happened from our situation." Funny and sad that the commenter lynch mob has a lot more righteous anger -- "Screw them" -- than the people actually involved.

I think he's highly professional in his stance, if I were him and I were angry I wouldn't let it show publicly either. The rest of us don't have anything to lose here, having an investor bail out that far in to a deal is as good as being shot down, there is no way they could have survived it. Also, your sample size is just one individual out of all the founders that got axed, so not 'people', but person. How the rest…

We know how at least one of the other booted founders feels, and he suggests he understood there was always a risk the money wouldn't come through:

http://techcrunch.com/2010/04/15/the-curious-case-of-vancouv...

The 'deal' was reversed in that no equity was requested even though some material assistance was provided. If hypothetically a startup was willing and able to continue in Vancouver even without the foreseen investment, the whole episode could have still been net-positive. If the startup was derailed by the detour to Vancouver (as appears to be the Status.ly situation), the whole episode appears net-negative.

If there's not enough cash to make the full investment, and already ~$10K or more has been spent on the companies released from the program, what's the additional 'compensation' amount that would be fair? Airfare back home? Some hypothetical opportunity cost that was forgone based on their hopes in Vancouver?

Jamie might have a legal case but if there's one email where BL reports, and Jamie acknowledges, that the funding is still pending and conditional on other uncertain factors, that case could be shot.

Re: Bootup Labs' Danny Robinson: "I made mistakes. I was wrong. Lessons Learned."

#50

Post by jacquesm »

gojomo wrote: post #49
jacquesm wrote: post #47

Earlier quoted context omitted.

I think he's highly professional in his stance, if I were him and I were angry I wouldn't let it show publicly either. The rest of us don't have anything to lose here, having an investor bail out that far in to a deal is as good as being shot down, there is no way they could have survived it. Also, your sample size is just one individual out of all the founders that got axed, so not 'people', but person. How the rest…

We know how at least one of the other booted founders feels, and he suggests he understood there was always a risk the money wouldn't come through: http://techcrunch.com/2010/04/15/the-curious-case-of-vancouv... The 'deal' was reversed in that no equity was requested even though some material assistance was provided. If hypothetically a startup was willing and able to continue in Vancouver even without the foreseen i…

I think the blog posting (the mea culpa) was carefully crafted to avoid taking a stance that could cost them money, but I think it is crystal clear that if the situation had been outlined beforehand (that the money was not on hand) that they would have never made the move.

That's called pre-contractual information, which is supposed to be given freely so the other party realizes the risk. They did nothing to warn them the money was not available at all, and might never become available.

In a court case that would probably have 'legs', even if getting to a judgment would probably cost more than it's worth, and they seem to bank on that not happening. But there are more ways to skin a cat and the internet is a great place to put such things to right.

The way out is to compensate them for the expenses they made that they would not have made if they would have been properly informed beforehand, so that includes the funds to re-locate back to where ever they came from and a sum of several thousand dollars to get started again.

Figure another 5 to 10 grand per founder and you should call it quits and consider the matter settled as good as possible given the circumstances.

If they don't have the cash they could do an iou redeemable a year from now, or when they take on their next round of funding.

You break it, you own it, and a real 'sorry' includes compensation.

We agree about the one email, if that exists it's a different story, but then I think that mea culpa would never have been written, clearly there is a party at fault here, by their own admission.

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