Friday, August 3, 2012

Serial Entrepreneur Recounts Meeting with Facebook Inc (NASDAQ:FB) `bullies’

Facebook Inc (NASDAQ:FB) - bashing has become fashionable. The latest salvo has been fired by developer and serial entrepreneur Dalton Caldwell, who in an Open Letter to the social network's founder Mark Zuckerberg has accused his executives of trying to bully him.

Writer Sheh Israel writing the story in Forbes, said that it was a disturbing account.

Caldwell, who is now heading a company called Mixed Media Labs, is working on App.net an application to be used on the Facebook platform. In meetings with Facebook executives he had been assured that his application was interesting and could be useful for the social network's Open Graph feature.

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On June 23, Caldwell, met with senior executives of Facebook at its headquarters in Menlo Park. The purpose of the meeting was to demonstrate his new application.

"I was hoping the outcome of this meeting would be executive-level support for my impending product launch," Caldwell wrote in his letter.

As it turned out it was not a happy ending. The executives so far from offering to back his product told him that the application he had developed would compete with a recently launched Facebook App Centre Product.

"Your executives explained to me that they would hate to have to compete with the `interesting product' I had built, and that since I am a `nice guy with a good reputation' that they wanted to acquire my company to help build App Centre."

Caldwell however told them roundly that he had no intentions of selling his company and he would continue his discussions with the company only if they displayed interest in his product.

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Of course Caldwell uses a lot of hard words in his letter accusing Facebook and Twitter of predatory tactics to squash out competitive products.

Bullying tactics to stifle competition are nothing new in the world of business. When Microsoft Corp was still a young and growing company, it rapidly acquired the reputation of clamping down on competition by acquiring the companies or trampling them into non-existence. A good example of Netscape, which in the early days of the Internet was a market leader.

But then Facebook is a younger company belonging to a newer generation and people may be forgiven for thinking their business practices would be different from the older corporation.
Considering what we know about Facebook's origins and allegations therein we should not be surprised at what Caldwell had to experience.


  1. That sounds like business as usual. Whats new?

  2. I question whether this account represents the company as a whole, or whether these intentions were isolated.

    Any company exploding in size is inclined to take on the odd counter executive - individuals who may be able to negotiate their MBA to the book, but lack that natural business acumen.

    Presenting a 'competitive' product would send off red flags in any case study, and this account appears to have been managed to the historical textbook. Thus the soured relationship between the two parties concerned.

  3. I'm confused. This is the way it's done. Always. "Hi, we are entering your space and so you can either accept our offer to acquire you or accept the fact that we'll be your competition. Also, if you don't accept the offer we will contact your competitors to try and work a deal."

    I'm surprised that you are surprised.

  4. Squash competitors? Yes, that is what companies try to do in a capitalist economy. Maybe he should have listened to their offer instead of running home and writing a whiny letter. File under "Grow Up"

  5. whine and dine tactics


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