Image Source: Clinkle. T
The picture above says it all, but if you want to find out exactly how this Stanford kid raised $30 million for his startup Clinkle and became the ring leader for one of Silicon Valley’s biggest fails, then keep reading.
If you don’t know what Clinkle is, it’s a mysterious payment app kept so secret, some of it’s employees don’t even know the full details. Clinkle’s founder Lucas Duplan managed to make headlines last year with a record setting seed stage fundraiser that peaked over $30 million dollars, made possible in part by venture capitalist firms Andreessen Horowitz, Accel Partners’ Jim Breyer, and billionaire investor Richard Branson.
Today, Clinkle has spent almost $10 million of its investment fund, dozens of employees have been fired in multiple waves , most of the executive team that once led Clinkle has departed, and after three years in the making, Duplan’s payment app is still not ready. How did everything go so wrong?
Business Insider reported on a very in-depth investigation into the chaos happening over at Clinkle. From that, we pulled some examples of how Lucas Duplan is a red flag and how he messed up as the leader of his startup. Here are eight reasons of how Lucas Duplan is one of the worst tech startup founders today and how you can learn to not follow in his footsteps.
1. His Co-Founders Are Nowhere to be Found
Here’s the first red flag. Clinkle’s ex-co-founders and Stanford classmates Frank Li and Jason Riggs departed from the startup last year. While Li went on to work for the intelligence company Palantir, sources say Riggs left last summer because of numerous issues with Duplan, though neither has responded to requests for comments.
When deciding to join a startup, if some of the creators of the heart and soul of the company have already left the scene, be weary. It was only last June that Clinkle raised $25 million in seed financing, so what kind of issues did Riggs have with Duplan? With Clinkle, this may remain a mystery, but given the further details of what kind of leader Duplan allegedly is, we may just assume the worst.
2. Poor and Distanced Leadership
According to reports from former employees, Duplan distanced himself from employees in more ways than one. He rarely walked the floor with his employees and stayed holed up in his office like a recluse. When he was out and about, Clinkle’s staff observed him as unfriendly, stand-offish, and isolated.
Granted he’s just a kid, any smart startup founder would recognize this is no way to appear in front of your employees. Especially in a young startup, the founder should remain relatively close to all aspects of the company in it’s early growth rather than delegate from behind the doors of a closed office.
3. He treats his employees like sh*t.
These quotes from his former employees describe everything you need to know:
“He doesn’t want to know you, he doesn’t want to care about you, nor does he want to lead you; he simply wants to control you. You’re a pawn on his chessboard. In his mind, everyone is replaceable.”
“Working for Clinkle was like going through an abusive relationship… I still have trust issues and think my new boss is going to screw me over.”
“He treated them like second-class citizens,” one former employee describes, and that a lot of people who have left Clinkle feel “permanently scarred.”
It was reported that Duplan also kept an ops team comprised mostly of women who he called the “ops girls” and frequently encouraged his engineers to use them for personal chores, washing their cars, and picking up groceries. How admirable…
4. He fires his employees in the worst way possible.
Last September, Clinkle celebrated reaching a 100,000 app sign-up milestone with a Friday “booze bus” for their valued employees. The Sunday after, a dozen of those workers on the bus were called and told not to come to work on Monday- they were fired.
There is only one way to fire your “valued” employees that’s worse than this and that’s through text message. One former employee explained, “It was a big blow because it came out of nowhere, and it could have been handled better.”
Three months later in December, Clinkle’s now former COO Barry McCarthy fired employees in their growth, operations and recruiting teams with an email on Sunday to show up the next morning at 9 a.m. sharp to be escorted to a meeting room to be let go and turn in their laptops- Duplan wasn’t even there to do it personally. The ultimate lessons here? Hiring a sales team without an actual product to sell was a mistake on Duplan’s part. Conducting the layoffs the way he did is not only a huge blow to morale but it really says you don’t care about your employees.
5. Even worse, he fires those employees to make room for more executives.
The cherry on top for those employees fired in December was that Clinkle was going on an expensive executive hiring spree after. This was a problem that Chi-Chao Chang, a well respected former Yahoo executive, noticed during his time as a Clinkle employee, which lasted one whole day.
That’s right, Chang was smart and did his due diligence on Clinkle and decided it wasn’t a safe bet in the end. It was reported that on that first day, he wondered why Clinkle was planning on another round of layoffs just two months after the last cut and why they were planning on firing hard-working employees to replace them with executives when Duplan should have been focused on finishing his product. When you put hiring a bunch of higher ups before focusing on the engineering team that has yet to finish your product, most would think you are delusional and clearly out of touch with your company.
6. He built the worst company culture possible.
All smart startup founders know the importance of company culture- it keeps your team driven towards one goal and most importantly makes them happy doing it. This is what Duplan reportedly told Clinklers during an all-hands meeting:
“We are not Google. At Google, people ride around on bikes, smiling. We’re more like the Marines. People think culture is about being a family. We are not a family. Culture is making sure you’re working with the best people. The person to your left or right could be gone tomorrow. You can’t be upset if your best friend is fired, because it just means they weren’t the best.”
How suave. It sounds like Duplan could really take some pointers from Jordan Belfort on company culture; his employees were all insane, but they sure loved their jobs and they loved Jordan.
7. Inappropriate over-extravagance.
Nothing says you are a young douche-bag with lots of money more than balling out while your startup doesn’t have a finished product and you are firing employees left and right. Duplan lives in San Francisco’s 58-story Millennium Tower where a one-bedroom costs between $1-2 million and a penthouse runs for $12 million. Duplan is also rumoured to have a full-time maid service and a very expensive personal trainer.
At Clinkle, Duplan fitted his office with Crate & Barrel furniture, custom-made blinds, and state of the art technology. Multiple sources say Duplan considered installing a motion detector system so that he could wave his hand to signal his assistant rather than just call her. His office has since been turned into a meeting room.
8. He is simply an inexperienced Kid in Business
Duplan has perhaps exhibited all of the worst scenarios that could happen for an entrepreneur in Silicon Valley. With his hyped up, deceptive, unfinished, and misleading product, he managed to dupe big name investors like Richard Branson and venture capital firm Andreessen Horowitz as well as let down waves of now ex-employees.
He’s a good salesman, but managing the pressures of starting a business with over $30 million in investments takes a little more education in business management. But perhaps there wouldn’t be so much pressure to handle if Duplan wasn’t so secretive about a product that pretty much seems was kept secret because it was extremely far from finished.
As one Clinkle employee explains:
“[Executives] came in thinking, ‘OK, this product is launching soon. Then they realized the back end is not ready, the front end is not ready, Lucas is re-thinking the design, the architecture is not laid out, there’s no security framework, there’s no fraud detection framework, the bank contract is still being signed, the payment processor still needs a lot of work, and they still haven’t figured out who the credit card processor is going to be. These people got overwhelmed.”
Being a great salesman is one thing, but being a great leader in a tech startup takes a lot more than smoke and mirrors, particularly on the part where you have a solid product and a business plan to develop it for the market. As investors everywhere will certainly be more weary after the Clinkle disaster, for you aspiring tech entrepreneurs out there, do the world a favor and don’t be a Lucas Duplan.