Bad Press 101 – How to deal with an employee who screws everything up
As you might have already read, BlogNation really got dicked over today when the US editor Oliver Starr posted a public letter of resignation on the front page of the blog he was resigning from. It talked about how the CEO of BlogNation, Sam Sethi, wasn’t paying his people anything.
The validity of his claims are irrelevant. He’s gone, the world now thinks that Sam Sethi is a terrible CEO and shady person to do business with. What’s Sam Sethi to do?
1) First off, Mr. CEO needs to take a stand. He needs to openly discuss the situation at hand and either make a full blown apology that discusses in detail why he hasn’t paid, or deny it in its entirety and possibly provide proof that he did in fact pay and that Oliver Starr is just trying to screw him over. Either way, Mr. CEO needs to say something to the world, or else people will take his silence as a guilty confession.
2) Mr. CEO needs to make sure the other editors are happy. Discuss openly with the other editors what happened and how to assure that such a thing won’t happen again. If they too start posting open letters of resignation, BlogNation might as well just pull the plug.
3) Or the best of the solutions… PAY YOUR EMPLOYEES AS YOU PROMISED!!!
On another note, after TechCrunch posted Oliver Starr’s letter, an editor from BlogNation China posted a comment:
Ladies and gentlemen –
1. We express our concern about Oliver deciding to air his own concerns on blognation.
2. Readers may wish to note that reports about blognation on TechCrunch may contain bias. It most certainly is not the “neutral point of view” that we expect from the Wikipedia.
3. As part of the blognation team we are experiencing difficultings in launching and in being with a new startup. Our determination to establish the brand and to aim for victory after victory, however, remains unchanged and will remain unchanged.
4. Quite a bit of content on blognation (and blognation China at that) are unique, as we have good roots in our community. We grow with the community.
5. Please rest assured that blognation (and in particular blognation China) will continue to provide you with news every day of the week like we have been doing for the past two months.
I do realize that some of you have different opinions. We will respect each other’s opinions knowing that responsible freedom of speech is a good thing.
Your support is appreciated.
Best regards,
David Feng
Editor, blognation China
http://cn.blognation.com
I’m sure you’ve already found some flaws in the above comment. This David Feng is giving the absolute lamest excuses for Mr. CEO’s problems. TechCrunch readers are definitely biased, but the post itself didn’t have so much. Just cause you’re a startup doesn’t excuse you from paying employees you’ve promised to pay. If they were under an equity agreement or barter, that’s different.
Unfortunately for Oliver, I’m not sure if there’s much legal recourse for him. He didn’t sign a contract with his employee which leaves him utterly screwed. I’m sure he’ll learn for next time. as for Mr. CEO, best of luck.
Jessica Mah is a 17 year old entrepreneur, blogger, and sophomore in college. She’s currently the founder of a startup, managing editor at Startupism.com, and Jessicamah.com. In her free time, she enjoys the prospect of being an underage angel investor.
December 5th, 2007 at 3:52 pm
Hello Jessica
Thanks for your thoughts I am Mr CEO aka Sam Sethi. Oliver did not resign he was fired along with Debi Jones. I guess employing bloggers with strong opinions is a double edged sword.
In due course I will respond openly and fully on blognation to Oliver and thus the rest of the blogosphere.
In the meantime, I will say, Oliver is correct on one point, none of the editors have been paid in full yet.
But note all the editors joined and signed contracts knowing we had no money to begin with but together we would rapidly grow and deliver blognation and in due course we would seek funding and everyone would be rewarded and back paid. I guess that doesn’t make for a good story.
The one mistake I made was to think the period it would take to grow and deliver the funding was smaller – forgetting we are raising funding in Europe not the Valley.
In a number of days we will announce our funding closed which is about 6-7 weeks later than I expected.
I guess only time will tell if I am a liar and if putting my reputation on the line was worth it but one thing you can see around the blogosphere is the blognation editors writing their own comments regarding blognation and their continued commitment.
You can make up your own mind from that.
I wish you well with your own startup future.
December 6th, 2007 at 2:48 am
Hi, Jessica. I see that Sam has taken you up on your suggestion that he respond to my allegations. Good for him. I say let the light of truth expose all for the world to see.
To that end I’d like to first correct you on one small point; I do have a contract. I don’t know if all the Blognation editors do but I certainly did, as did Marc Orchant who has likewise not been paid (and who recently suffered a massive heart attack).
Now to respond to Sam’s allegation that I was fired. In his TechCrunch comment Sam states that I was fired last month. He did not bother to respond to my question as to why, if I was fired like he says, I was still able to post as of yesterday morning as well as on Monday morning when Marc was struck ill. Sam can’t claim that he didn’t know I could post; he commented on the post about Marc himself.
Further, I submit to you the following exchange that was made on the Blognation Skype chat and is thus part of the public record:
Sam Sethi
11/26/07 9:39 AM
will scan termsheet and info tomorrow so everyone can see we have closed $600k
Tris Hussey
11/26/07 9:40 AM
nice … so just to be clear on currency 600K USD?
Sam Sethi
11/26/07 9:40 AM
so to be very clear $600k USD
Tris Hussey
11/26/07 9:40 AM
k
Ewan Spence
11/26/07 9:40 AM
Still at 15% Sam?
Sam Sethi
11/26/07 9:41 AM
18%
Now compare it with this one:
Subject: RE: BlogNation
Mark- I have board approval to progress on the 250:25 basis with a few key
requested conditions including: Agreed budgets, use of funds & investment
draw down schedule, right to appoint board position, exclusivity for a
period of time during due dili… Perhaps outlined in heads of terms.
- all subject to Sam’s approval & dd
- I plan to instruct our lawyers to assist on our side with dd & an investment agreement
- will come back to you in greater detail asap…. with outline terms,
requested info & suggested transfer timetable etc.
Spreadsheet was helpful but did not show investment coming in? We need to
understand exactly where the 250 goes & when, if poss…
Notice the vast difference in valuation. The first is $600,000 for 18% (which Sam explicitly stated was a done deal) and the second which was $250,000 for 25% and is still subject to DD (due diligence) and other terms making it very obvious that the deal is nowhere near being done.
Third, Sam states above and on TechCrunch that he would respond fully to my allegations on Blognation however he has not done so to date. This behavior (promising to do something like email, or call, or send money) is all too common with Sam and is one of the principal reasons for my sentiments and open letter.
Given these facts I hope you will reevaluate your original premise that Blognation “got dicked” by me and instead consider the possibility that Sam Sethi is every bit as dishonest and manipulative has I have stated he is.
Sincerely,
Oliver Starr