An Inexperienced Leader
Many blame the startup’s high turnover and trouble launching on the young, inexperienced CEO.
Lucas Duplan, the son of wealthy Croatian parents, grew up in Orinda, Calif., near Berkeley. He lives in one of San Francisco’s swankiest buildings, a grand residence on an upper floor of 58-story Millennium Tower. A one-bedroom in the building can be purchased for $1-2 million while a penthouse runs up to $12 million.
Unhappy former employees swap tales of the founder’s extravagance: He’s rumored to have full-time maid service and an expensive personal trainer, for instance.
Sources are similarly outraged by the elegance of Duplan’s office -- which has since been turned into a meeting room. Duplan filled it with Crate & Barrel furniture and custom-made blinds, and equipped it with the latest technology, they say disapprovingly. At one point, multiple sources say, Duplan considered installing a motion detector system on his desk, so he could wave his hand rather than call out to his assistant to let her know he needed something. A source close to the company denies this.
Duplan, former employees say, needed a lot of things from his assistant. One likened his relationship with her to “The Devil Wears Prada.” Another said Duplan required her to bring him lunch frequently and get his laundry done.
One harsh post on Quora written by two people claiming to be former Clinkle employees, criticized Duplan sharply and called him a “shark.”
“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,” the pair wrote. “You're a pawn on his chessboard. In his mind, everyone is replaceable.” Reviews written by current and past employees on job site Glassdoor aren’t much kinder.
Former employees wondered if he even knew their names. Duplan often stayed holed away in his office and walked the floor infrequently. Staffers who were able to observe him up close say he didn’t give off friendly vibes and seemed stand-offish, purposely isolating himself from his peers.
“We are not Google,” one former employee recalls Duplan saying at an all-hands meeting. “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.”
Another critique of Duplan is that he drags his feet when it comes to decision-making, often changing his mind after his teams have spent months on a deal, a redesign, or a product update. He’s also said to be a poor relationship manager.
When Clinkle investors would come to visit Duplan, one person says, he’d either show up late or not at all, passing off the meetings to other Clinkle executives. “He doesn’t care for people or their time,” this person alleges.
One person close to the company disputes this claim stating, "Lucas has a great relationship with his investors."
In person, Duplan is handsome and youthful, and he comes off as a young man with vision, depth and drive for the right audience. He seems genuinely humbled by the $30 million opportunity bestowed upon him by his investors.
But Duplan wasn’t the only manager former employees complained about. Barry McCarthy was described as similar to Duplan -- testy and stand-offish -- just older.
McCarthy was respected by the young CEO, sources say. But it was hard to tell if the feeling was mutual, especially when Duplan would make mistakes. When a picture of Duplan holding up fake wads of cash leaked on tech blogs, McCarthy allegedly told the company, “The kid is going to screw up sometimes.”
He was said to have a temper, yelling at subordinates and issuing legal threats during firings.
“Lucas is bad,” one person stated. “Barry is worse.”
There were cultural issues within Clinkle too. While most people say they loved their colleagues, they didn’t feel every employee was treated equally by upper management. One described the way engineers were treated versus everyone else as a “caste system” within Clinkle. Another said there was “segregation in terms of how departments were treated by management.”
For example, only engineers, some designers and product people were given stock. And some of the other departments, such as operations, were asked to do menial tasks for the engineers.
Duplan is said to call his ops team, which is comprised mostly of women, the “ops girls,” and one person says he frequently encouraged engineers to utilize them for personal chores, such as getting their cars washed and filled with gas, and picking up groceries.
“He treated them like second-class citizens,” this person says, adding that a lot of people who have left Clinkle feel “permanently scarred.”
“Working for Clinkle was like going through an abusive relationship,” says the former employee. “I still have trust issues and think my new boss is going to screw me over.”
Selling A Dream, Not A Reality
(Above is a leaked video that demonstrates how Clinkle works.)
Like his idol Steve Jobs, Lucas Duplan is an expert salesman. You need to be, to persuade Silicon Valley investors and engineers to take a chance on a startup.
First, he looks and sounds exactly like the sort of Silicon Valley wunderkind who could build a billion-dollar business.
“I don’t think it was the app that was impressive,” one former employee says. “I think it’s Lucas who is so compelling. He sells the vision of what every investor wants, which is a 20-year-old, white male, Stanford Computer Science major. He fits the bill. He appears to be the next Mark Zuckerberg, and he carries himself that way. Investors invest in people, not products. He’s articulate and he’s smart. In a limited period of time he can really win you over.”
Second, Duplan articulates his vision exceptionally well. The demo, which sold many investors and executives on the company initially, was sometimes incorrectly perceived as a working version of the app, sources say. Though nobody accuses Duplan of lying, he may have fostered the impression that the demo was a functional product. It looked like a product, and Duplan often insisted it would be launching in a matter of weeks.
Now that the app has launched in closed beta, Clinkle shows new hires an actual live demo of the app. But the demo some former Clinklers say they saw during their recruitment processes bore little resemblance to what developers were actually building, both in appearance or function.
“The demo is not even what’s going to go out,” one former Clinkler who saw an older version of it explains. “It’s not actually moving any money. It doesn’t actually do anything, but it looks like it does something. So that’s what people are seeing.”
A former employee with knowledge of the app says multiple aspects of it were -- and are still -- nonfunctional.
The sound technology, the source says, doesn’t yet work. A noise as common as a blender in the background at a coffee shop might cause it to malfunction.
Various deals to work with major banks -- which will be necessary for the app to launch -- have stalled. An agreement with Zions Bank fell through, and Clinkle had to frantically court Bancorp. A payment processor partner was only recently chosen because Clinkle was slow to hire a dedicated payment expert to handle negotiations, multiple sources claim.
On top of that, the user interface hasn’t been finalized, and the current working version of the app is clunky, a source says, adding that it takes a long time to download and drains battery life.
According to the same source, executives weren’t necessarily made aware of these hurdles when they were convinced to join the company. Many felt duped by Duplan.
“[Executives] came in thinking, ‘OK, this product is launching soon,’” the former employee explains. “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.”
Everyone remembers Duplan or his managers telling staff members the app would launch at the end of last summer. When that deadline came and went, employees assumed the CEO had just been optimistic. Over time, some began to doubt his sincerity.
Employees began to wonder if they were being strung along, one ex-Clinkler says. “That’s a big reason why a huge number of executives left. He’d tell people, ‘Yeah, we’re going to launch in two months. After a while you realize he knows he’s not going to launch in two months. Lucas is really good at selling the ‘We’re almost there!’ ... It can be addicting to feel like you’re so close.”
When McCarthy announced his resignation from Clinkle in February, he told Re/Code reporter Jason Del Rey that he had expected to launch sooner. When reached for comment, McCarthy replied that he has moved on and wishes his former colleagues “nothing but success.”
Josh Brewer, who was hired away from Twitter to oversee Clinkle’s design, left the company after only two weeks of employment, just hours after McCarthy’s resignation.
The Curious Case of Chi-Chao Chang
In the past few months, Clinkle has lost nearly its entire executive team. Its VP of engineering, director of customer service, VP of design, VP of operations and McCarthy have all departed.
The first of those departures was Chi-Chao Chang.
A Clinkle insider who is close to Chang explained why he may have left so suddenly.
Chang decided to join Clinkle as its VP of engineering just after Thanksgiving. But when he accepted the offer, he wasn’t confident about the decision. Clinkle was a secretive company, and it wouldn’t divulge the true state of its product -- or more importantly, the plan for the company’s turnaround -- to an outsider. The only way Chang could truly find out if he could help Clinkle was to join it.
He went into his first day of work determined to collect more information about the company’s product, road map, and management team for further due diligence. By the end of the week, he’d know whether he should stay at Clinkle or move on.
During that first day, Chang picked up a discouraging piece of information. The company was planning another round of layoffs. It had only been two months since the last cut, and many of the people who were going to be fired were hard-working employees who had proven their dedication to Clinkle’s mission.
Counterintuitively, the company wanted to go on a hiring spree after the layoffs, bulking up its engineering and executive teams, which would be costly. Chang, the insider says, couldn’t help but wonder why a seed-stage startup wanted to fire hard-working employees and bloat the company with expensive higher-ups rather than focus on simply getting the product launched.
In addition to learning about the layoffs, Chang found the product and its marketing strategy in poorer shape than he anticipated. One person who saw his face during a walk-through of the product said he appeared “dumbstruck.”
But the insider says the product didn’t scare Chang away. If Duplan oversold it during the interview process, he was just being overzealous like most startup founders are. Plus, hard work wouldn’t have scared Chang. He knew he was hired to get the app ready for launch.
A faulty app was something Chang could more or less fix. But disagreeing with the company’s management team about the proper direction of the company was harder to get past.
Chang left his first day of work feeling uneasy. He called Duplan that evening to share his reservations. The conversation lasted well into the night. The next morning, Chang told Duplan he wouldn’t be coming back to the office. He left a long list of recommendations about how to launch Clinkle, then they parted ways amicably.
Of course, the only person who really knows why Chang left is Chang himself.
When reached for comment, Chang declined to elaborate, stating simply, “Lucas is one of the most impressive people I have ever met. I believe he will lead Clinkle to a successful outcome and I wish them the best.”
With one-third of its staff gone and a lot of lessons learned, Duplan, who just turned 23, remains optimistic. He says his company still has more than $20 million -- of the $30.5 million raised so far. He’s also rumored to be mulling over a new round of financing, possibly to try to buy a bank and a payment processor for Clinkle.
For the first time, all Clinkle employees are finally testing out a basic version of the app and moving money.
And despite the grumbling, Duplan has his defenders.
“I do feel badly for Lucas because he and I are similar in age,” one person says. “I’m just trying to pay rent. I can’t imagine what he’s dealing with.”
Morale seems to be rising. Some employees have noticed Duplan making a conscious effort to learn from the past year’s missteps.
“He fully understands the mistakes he's made, and is making a huge effort recently to improve on these problems and hire really experienced executives to help him get better,” one current employee wrote on Glassdoor.
Duplan insists that Clinkle will live up to the hype. When he finally unveils the app to the world, he doesn’t want to let anyone down. He emailed the following statement to Business Insider:
“Really exciting things are happening right now. To give you a better sense of where we stand today, we’ve tripled the number of transactions occurring on our system from February to March and expect an even greater increase in velocity in April. Every week, we’re adding more users and we’re testing and adding features and functionality in anticipation of a broader public roll-out later this year. Our team is working tirelessly and burning the midnight oil to make sure we’ve dotted all I’s and crossed our T’s.”
When will the final product -- an app three years in the making -- be ready for everyone else to use?
When we put the question to him in a meeting two weeks ago, Duplan shrugged and smiled.
This story originally appeared on Business Insider