The uncanny similarities between Wirecard and Inov8

Don’t speak to the press; just sue them and accuse them of being in cahoots with the competition. Oh, and run a bad business.

“Sadly, my advice to founders has to remain: do not talk to the NYTimes. If they are doing a story on tech it is 95%+ chance it will be unfairly negative w/a link-baiting headline.”

This tweet by Silicon Valley angel investor Jason Calancis recently led to a measure of debate in American startup circles. A lot of the entrepreneurs seemed to like it. The journalists, not just those within the Times, were miffed.

No points for guessing what point of view Profit would back.

To be fair, some of the techies in the conversation were of the view that there was nothing wrong with speaking to the Times or any other member of the press. Just tell them the truth and answer all their questions and concerns as best as you can. What’s the worst that they can do, barring printing absolute lies, to which, of course, there is legal recourse, and the resulting good press that would come from a court decreeing a critical piece was libellous.

The fact is, that in the qualitative aspects of assessing a company’s business model, the sort of thing that a court cannot quite rule over, a company spokesperson can attempt to frame and cue the journalists’ analysis favourably towards the company. If media outfits that are unfriendly to startups (like the Times was being alleged to be) were to totally ignore a company’s point of view, at least they won’t be able to do so in good conscience. There is absolutely no justification for not talking to the press. Specially since the most part of a CEO’s job is to, well, do press and meet people. Not the CTO’s job, not the CFO’s, not the COO’s. But the captain of the ship has to be a people’s person. 

Furthermore, perhaps, just perhaps, a good journalist’s common sense questions can perhaps unearth some hitherto undefined weaknesses that a company could do well to fix.

————————-

Oftentimes, when a company simply won’t speak to the press – and yes, here is my bias speaking – it is because there’s something quite fishy going on. This certainly was the case with Wirecard, a fintech firm, which won’t speak properly to the Financial Times and when the latter did some critical bit of reporting on them, had the authorities in Germany conduct potentially criminal investigation against the newspaper and the reporter. Eventually, however, the suspicion that the company was lying through its teeth about company fundamentals, was proven right and it went kaput.

Profit itself has received a legal notice from Inov8, the Pakistani fintech that we profiled in a recent issue. In addition, WhatsApp messages abound from a company to anyone who would listen that the article and video about their company should be reported to the social media sites that are hosting them. If the company had been this proactive about messaging and PR in the beginning, things might not have come to this pass. No, scratch that, things would have come to this pass, the company’s a damp squib, and our report would have been similar, more or less.

Just like Wirecard, Inov8 is trigger happy when it comes to lawyering up. Not clearly specifying what, in particular, in an investigative report is false. This trend in Inov8 isn’t limited to outsiders; after a legal battle with former employees, the Supreme Court ruled in the latter’s favour and the company had to cough up their dues.

We hope that is where the similarities between the two companies end. Inov8 does not seem to be a complete fraud like Wirecard and has some services to offer for which it has some paying clients. Unless future press reports prove otherwise.

—————————–

The irony here is palpable, though. Startups, tech startups in particular, have an air of condescending superiority over what they call the status quo, whether in legacy businesses or in government. A lot of it is warranted; a lot isn’t.

But it turns out that the new self-styled wunderkinds are as fond of opacity about their business as the older, seth-run firms are. And despite their Silicon Valley affectations, it turns out many of them are as intolerant of a critical press as the seths allegedly are.

And the government? Polite to a fault, the bureaucrats and politicians (the latter much more than the former) can’t afford to not get back to the press. Sometimes, one thinks that counter-intuitively, it is these shiny new firms that need to learn from the government, not the other way around.

Babar Nizami
Babar Nizami is Executive Editor, Profit at Pakistan Today. He can be reached via email at [email protected] He tweets @Bnizami

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Must Read

Sindh mulls reopening businesses on Sept 15

CM Murad says final decision will be made after govt reassesses situation in first week of Sept