As you might have heard last night, PeopleBrowsr, the maker of social influence service Kred, has filed legal actions against Twitter for cutting it off of its full firehose of data. It was given a temporary restraining order, which has kept the current data deal in place. Twitter told TechCrunch last night that it had every right contractually to do so, whereas PeopleBrowsr is crying “anti-competitive” practices.
In short, it’s getting ugly.
We’ve learned that this is not the first time that PeopleBrowsr’s CEO, Jodee Rich, has had an ugly end to a company. It’s well documented in other news pieces and through legal documents. Upwards of 16,642 pages of transcripts, to be more specific. When a company is potentially nearing its end, people will pull out all of the stops. Especially its CEO and only investor.
In a court case, ASIC v Rich, PeopleBrowsr’s current CEO, Jodee Rich, was accused of failing to meet his duty as an executive of the company One.Tel telecomunications:
ASIC alleged that Rich and Silbermann failed to exercise due care and diligence by failing to keep the board of directors of One.Tel sufficiently informed of material information about the true financial condition, performance and prospects of One.Tel, especially in the period leading up to the cancellation of a proposed rights issue in May 2001.
ASIC sought $92m in damages and a lifetime banning order against the former One.Tel directors.
When I spoke to Rich today, he said he was vindicated in this case and “Along the way, I learned a lot of litigation.”
The above case was a huge claim, and not one that would make you jump to fund a company like PeopleBrowsr. As I mentioned, nobody has funded PeopleBrowsr except Rich; he’s put $5 million+ of his own money into the company to date, we’re told. Do with this information what you’d like. Consider this when looking at the Twitter case through the lense of a poor company getting the shaft from a data-hungry powerhouse. Because it’s simply not true.
During our discussion, I asked Rich what he’d like to accomplish with this legal action against Twitter:
We’ve had a long relationship with Twitter and we’ve built our business on the Twitter firehose and analytics. And we think it’s the beginning of a very exciting opportunity and we’re hoping to keep long-term supply from Twitter. The endgame is to keep a longterm supply of the Twitter firehose for PeopleBrowsr.
It’s not just this legal issue, though, we’ve been told there are other issues at the company. In reaction to claims of an uncomfortable working environment from multiple sources, including refusing to offer health insurance to its employees, Rich managing the company via email instead of in person, and repeated outbursts by Rich and other management in reaction to missing deadlines on shipping product features (due to executive mismanagement), Rich said:
We have a very positive and very open and very result-oriented culture here, and we have a team of people who are doing an amazing job. I think it would be fair to say that I’m an experienced manager and executive, and this time around it’s important to me as we move forward we move forward with people who are A players and people who are focused on results. I’m not interested in people who want to join us because we have better food than Google.
This current situation can only make things more uncomfortable for everyone involved.
In a piece with Australian publication Business Spectator earlier this year, Rich described his “new life” with PeopleBrowsr:
Rich is understandably cautious about hyping any new business but he can’t help but talk big numbers: “We now have a database of over 100 billion public conversations indexed across community, location, influence and other variables,” he says. “It’s early days but we are happy with the progress.”
Asked what he had learnt from the past, Rich will only say he’s “enjoying” life in a private company – though he did not take the opportunity to rule out a public listing.
Taking PeopleBrowsr public doesn’t seem like a possibility at this point, especially if it wants to move forward with legal actions against Twitter, which is also a private company. Legal proceedings are long and drawn out, expensive, and could potentially fail to achieve what it set out to in the first place. While this is clearly something Rich is willing to gamble on, we’ll have to wait to see just how long he wants to push it.
[Photo credit: Flickr]