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The $30 Million Clinkle Mystery

The story of a 21-year-old Stanford grad who wowed investors with a demo and raised $30 million for a mobile payments service. He soon lost scores of employees, and the company still hasn’t released a product:

Says one former growth team member, “I never saw a direct demonstration of the product.”

The growth teams met ambitious goals by targeting the most influential students on campus, such as group presidents and fraternity and sorority leaders. The leaders were shown some images from the website, and the deal was sealed with a compelling prize: If the entire organization signed up for Clinkle’s waitlist, then all of them downloaded the app on the day it became available, the group could win a $500 party, spa visit or stereo-system package. None of the pitches included a demo of the actual app.

After July, Duplan had dictated that no one — including potential hires and even some employees — would be shown the app anymore.

PUBLISHED: April 15, 2014
LENGTH: 19 minutes (4944 words)

Taking Care of Business: A Reading List

This week's picks from Emily include stories from Orange Coast Magazine, The New York Times, Business Insider, and Bloomberg Businessweek.
PUBLISHED: Feb. 16, 2014

You Can Explain eBay's $50 Billion Turnaround With Just This One Crazy Story

How an employee secretly recruited a team to fly to Sydney and redesign eBay’s homepage, without the direct signoff of the CEO:

But now, in that cab at the airport, the manic high had for a moment worn off, and Abraham was suddenly facing reality. The reality was his plan had a few problems.

Abraham listed them off in his head. For starters, almost no one at eBay knew what he was up to — including Donahoe himself. It was unclear who was going to pay for the trip. Abraham had gotten the six tickets to Sydney through eBay’s travel service, but technically, he’d never actually gotten approval. As for the rest of the trip’s costs, his plan was to foot the bill and then expense it. Maybe they’d sign off, maybe they wouldn’t.

Then there was the little matter of where he and his team would sleep. There was a possible Airbnb apartment, but no confirmation.

PUBLISHED: Feb. 8, 2014
LENGTH: 24 minutes (6110 words)

The Story of Tim Armstrong, Patch and AOL

Another exhaustive biography from Nicholas Carlson and Business Insider, this time on Tim Armstrong, his hyperlocal startup Patch and his leadership at AOL:

“He’s a very loyal guy. He made a commitment to different parts of that matrix organization, and damn it, he’s not going to let them down. And even though we brought in McKinsey and they told us to unravel it and Tim bought into it as the right strategy, he couldn’t get himself to do that because it would have been a breach of his personal loyalties.”

This was the first time Armstrong would struggle to make a call that he knew to be the right call because making the decision would force him to hurt lots of people who had believed in something he built from the ground up.

PUBLISHED: Nov. 7, 2013
LENGTH: 52 minutes (13138 words)

Top 5 Longreads of the Week

Our story picks this week include The London Review of Books, Business Insider, The New Yorker, New York Magazine, and Oregon Humanities with a guest pick by Jane R. LeBlanc.
PUBLISHED: Aug. 30, 2013

The Truth About Marissa Mayer: An Unauthorized Biography

An exhaustive, 22,000-word account of Marissa Mayer's rise from a focused student in Wausau, Wis. to Yahoo! CEO. Carlson goes back to her childhood to explore the traits that made her so successful at Stanford and Google, and he goes behind the scenes on the Yahoo! board's decision to choose her over interim CEO Ross Levinsohn:

"Over the weekend, Levinsohn played a guessing game with venture capitalist Marc Andreessen, Square CEO Jack Dorsey, and Twitter CEO Dick Costolo. With each of them, Levinsohn and the other Silicon Valley bigwigs ran through a long list of names, trying to figure out who might be getting the job Levinsohn had so hoped for. For each name they came up with, they came up with a persuasive reason why that person could not be it.

"Whom had Wolf and Loeb so clearly already decided on?

"Finally, late Sunday night, Levinsohn got a call from a friend of his at Google.

"This person asked: Had Levinsohn heard that Marissa Mayer had interviewed for the Yahoo job the Wednesday prior?

"Levinsohn realized everything all at once.

"Levinsohn now knew who Yahoo’s next CEO would be.

"Soon, so would everyone else."
PUBLISHED: Aug. 24, 2013
LENGTH: 88 minutes (22073 words)

The Story Of A Failed Startup And A Founder Driven To Suicide

How financial and personal pressure took a toll on an entrepreneur:

"Before the fundraising, Sherman would push himself and others to raise as much money as possible for their businesses. After the financing closed, he began referring to venture capital as a 'fraud' and a 'sham.'

"Employees could tell something was off when Sherman announced the financing to the team.

"'He said, "This is one of the hardest things I've ever had to do. And I hope to not have to raise more money for a very long time,"' a source recalls.

"Another source also recalled Sherman saying something alarming about this last round:

"'He said, "I had no business raising that last round of financing. I hadn't made our metrics or our terms—not anything near it. But I got it done."'"
PUBLISHED: April 5, 2013
LENGTH: 17 minutes (4430 words)

How Goldman Sachs Blew the Facebook IPO

An inside look at how banks jockey for "left lead" status on an IPO—especially one as big as Facebook's:

"For the past couple of decades, Goldman Sachs and Morgan Stanley have ruled the tech IPO business, with one of the firms serving as lead manager on most of the hottest deals.

"Goldman took Microsoft, Yahoo, and eBay public, for example. Morgan won Netscape and Google. Although other firms have picked off an occasional deal over the years, when it comes to tech banking, Goldman and Morgan remain in a class by themselves. To be sure, having Morgan or Goldman take you public is no guarantee of success—they’ve banked plenty of dogs. But going public without Morgan or Goldman means signaling that you weren’t good enough for Morgan or Goldman. In other words, that your company is second-rate.

"In the last few years, though, there has been a shift in the Morgan-Goldman power balance in the Valley. Specifically, until very recently, Morgan Stanley has won almost all of the hot IPOs."
PUBLISHED: May 9, 2012
LENGTH: 21 minutes (5485 words)

Inside Groupon: The Truth About The World's Most Controversial Company

Groupon actually lost $413 million in 2010. Diving into the S-1, it turned out that Groupon only considered itself profitable because it used a peculiar accounting metric of its own creation — adjusted consolidated segment operating income, or ACSOI. Basically, Groupon was taking the money it was spending on advertising to acquire new subscribers to its email and not counting that money as a quarterly, recurring expense — but as a one-time, capital expense, the way Google might account for the cost of building a new server farm. Groupon was saying that ACSOI helped it figure out the ratio between the amount of money it needed to spend on marketing to acquire a subscriber and how much that subscriber would be worth to the company over the long haul. But marketing expenses are not typically accounted for this way, and people looked at Groupon as though it were trying to pull a fast one.
PUBLISHED: Oct. 31, 2011
LENGTH: 34 minutes (8558 words)