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The OrderAhead scandal, in which the restaurant food delivery service appears to have launched rogue websites to draw business away from restaurants’ real ordering sites, just keeps going. Eventually, the investors, which include Google Exec Chairman Eric Schmidt, Salesforce CEO Marc Benioff, Reddit co-founder Alexis Ohanian and Ignition Partners, will stop this craziness. But when?
OrderAhead is part of the do-no-wrong Y Combinator accelerator, though where they got the idea of cutting to the front of the line using probably illegal tactics is anybody’s guess. So far, the company has refused comment to GeekWire, which broke the story two weeks ago.
In a normal world, the OrderAhead management team would by now be wiping tables in some of the restaurants they’ve targeted. Why the investors — who presumably have personal reputations to protect — haven’t already shut down this startup can only be a matter of the $10.5 million they’ve already sunk into the company.
That the last round was $8 million at the end of 2013 might explain the apparent desperation that seems at work here. Why would a company with any hope for success try to grab business using what seems like blatant misrepresentation, even fraud and IP theft?
I’ve been writing about tech companies since before the IBM PC. I’ve seen shadiness. I wrote the “vaporware” list for a few years. I’ve seen products produced only if an InfoWorld story drove enough preorders. I’ve seen a lot.
But I have never seen anything like this, especially from a company whose money comes from totally reputable sources.
Schmidt should be especially embarrassed, as the company he chairs now appears to be acting against one of his own investments. This will, I hope, become an example of Google playing sheriff when the Internet gets too wild, using its search results to restore order and fairness.
St. Marc Benioff, SF’s favorite tech philanthropist, isn’t in danger of doing too much damage to his good name, but Y Combinator, for all the good it has done for startups must also own a bit of this mess, as it does shares in OrderAhead.
After two weeks of circling the wagons and banning reporters from their Twitter accounts, it is time for OrderAhead’s management to grow up and face the consequences. If they won’t, their investors should do it for them.
THANK YOU