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

210 points by chaz 14y ago

dmor 14y ago
It really pisses me off that they are publishing this - the news of Jody's death devastated a lot of people and I don't see what new information is being reported here. The Guatemala story is hearsay. This makes me so angry.
- ScotterC 14y ago
  I disagree. I think it's very healthy to open up the conversation again. I've been surprised at how much it hasn't been talked about in the last few months (not referring to online but in person). It was weird to be at startup events shortly after Jody's passing with people who knew him well and have absolutely no mention of it.
- mgkimsal 14y ago
  How is it hearsay any more so than quotes from McClure and others? McAfee was quoted about their discussion, and Jody clearly went there - shouldn't be any dispute about that. Why does this 'piss you off'? Seemed entirely reasonable to me. EDIT: Perhaps you don't see any 'new' information here, but a lot of this was news to me. A great many more of us live outside the bubble that is the few square miles on the planet where so much tech activity takes place. We all didn't know Jody personally, and there seemed precious little in the days after his death that was anything more than "we didn't see this coming" and "he was always so full of life". Perhaps this will serve as a call to investors to have a closer eye o the books, regardless of how charismatic the head of the company may be. And I don't just mean for financial reasons - other people having a closer view of the books might have caused some serious discussions to happen - a forced face to face, as it were - which might have allowed them to see what was going on and offer help. Or it might have pushed him to suicide faster (assuming it was suicide) - who knows?
  - doktrin 14y ago
    I have to agree, in that the bulk of this story was news to me as well. Granted, my only prior exposure were the discussions here on HN immediately following his untimely passing. It's inarguably tragic. What rang the truest to me were the mentions by McClure towards the bottom about keeping problems & ambitions, magnified by our own bubbles and echo chambers, in perspective.
  - rdl 14y ago
    The issue with statements from John McAfee is that the term "pathological liar" would be an understatement. DMC, on the other hand, or really most other people in tech, are generally fairly reasonable sources for things where they have no particular reason to lie. McAfee makes weev look transparent.
- deleted 14y ago
  [deleted]
- untog 14y ago
  It's very difficult when someone you know in real life becomes a news story. People that have never met them will pass judgement, including the journalists who write about them. But the inarguable fact is that people are interested in this story, and there is probably much to be gained from being more open about the stresses of running your own company. I can see how seeing his name again would be very unwelcome, and I absolutely sympathise. But I think it is an unfortunate fact of life. If you knew him well, nothing you will ever see written on the web about him will match the person you knew.
michaelpinto 14y ago
I think many of us have misconceptions about what drives someone to commit suicide, and thus it becomes a taboo mental health topic which isn't healthy. Often it can be a behavior that could be triggered by anything from drugs to mental disorders, and there's even a feeling that genetics may play a role. I had a wonderful friend who passed away because of this and the one thing that it taught me was to talk about it. I'd urge everyone reading this to at least read up on the wikipedia page on the topic to educate yourself and get an overview: http://en.wikipedia.org/wiki/Suicide http://en.wikipedia.org/wiki/Suicide
aashaykumar92 14y ago
If you read this as a story, it's actually really well written--it's a great progression. There may not be one clear, overall thesis, but each section seems to have its own thesis and each is supported quite well. I never knew Jody but from the story, I have two takeaways: 1) Jody was a great person. The reason why I mention this first is to make it clear that the article really strives to show this. And he truly seemed to have a big heart. 2) Always be as open as possible. Many times, we don't want our problems to become others' problems so we hide it. And then it builds and it leads to a large amount of secrecy that could have been avoided. It goes back to the childhood saying we all hear, "No question is a dumb question." This phrase ultimately is saying that you might as well ask a question so that you are not falling behind in knowledge--whether it's academic or not. And please don't assume that I am saying Jody's suicide was purely because he didn't disclose Ecomom's financials; I just believe that if he would have been more open, more help could have been offered--financially and psychologically. Of course, I gained more takeaways than this but these are the two I thought were most worth sharing.
johnpowell 14y ago
If true.. >One childhood friend recalled a time when Sherman committed insurance fraud. He described driving on a highway with Sherman when they were 16. Suddenly, Sherman told his friend to "buckle up." He slammed on the brakes and caused an accident. Later, the friend says, Sherman would collect thousands of dollars from insurance companies for the self-inflicted injuries. Fuck the dude.
- crazypyro 14y ago
  I don't think its really okay to post "Fuck the dude." in a story about his suicide and failed tech startup. The guy was 16 at the time. It even says he had a rough childhood. Are you really going to post "Fuck the dude" when you know nothing of the situation or what actually happened? Clearly, he was immature at the time, but I don't think judging a person by what they did at 16 years of age is very appropriate.
  - jacquesm 14y ago
    It could have easily killed a number of innocent others. A rough childhood is not an excuse, if you're old enough to have a driving license then you're old enough to think through the consequences of slamming on your brakes at highway speeds.
    - Udo 14y ago
      In any case, we're talking about something he did when he was 16. Sure, it's in the story because it definitely fits with the overall "bad decisions" theme, but I'm sure most people did stupid stuff at that age.
      - jacquesm 14y ago
        I'm pretty sure most people did not do reckless stuff endangering people going about their daily business by purposefully creating a car accident. There is stupid and there is malicious, this is way beyond stupid. After all, he did tell his friend to buckle up which indicates he was aware of the risk, did he tell the people in the car behind him to buckle up as well?
scottbartell 14y ago
Running a startup is fucking hard and fucking stressful. I'm learning that.
- pyj 14y ago
  It seems to me that some entrepreneurs in some masochistic way likes the stress. My memory of my last startup was pretty painful, but somehow can't help going at it again. Some of us may not be made for living a simple life, instead we need that freedom, that constant possibility to fuck it all up.
- madaxe 14y ago
  Don't worry, it only gets worse. :)
noahth 14y ago
Stopped reading at the speculation that marijuana may have contributed to his suicide. The fuck???
- fuzzix 14y ago
  I don't smoke it - it makes me introspective, paranoid and miserable. I also laugh like a jackass at George Carlin and get the munchies, but the other stuff happens too.
  - beryllium 14y ago
    I don't need marijuana for any of those things. Lucky me?
- wpietri 14y ago
  Is that the one mood-altering drug that you think can't contribute to suicide? Or do you believe that none of them can?
  - gargoiler 14y ago
    Haven't you heard? marijuana has absolutely no bad effects. It's apparently safer than water and should be legalised immediately! What could go wrong?!
hncommenter13 14y ago
I didn't know Jody, so I won't comment on him personally. Speaking as a former investor regarding the financial situation though...never ever ever ever. Financial controls aren't important just because VCs are greedy: they keep companies alive and keep you out of court (or jail). I've seen situations in which cash didn't quite reconcile to what was expected; in some, the people involved made restitution and were fired. In others, they went to prison. A company with no effective financial control is flying blind and, someday, will run into the mountain in the clouds. The article identifies some key warning signs. 1. "...not even sharing the company's financial information with his co-founder, Emily Blakeney. Sources admit that was strange in retrospect. ... Sources say Sherman was the only person with access to the company's bank account and invoices. Only he knew how much cash Ecomom was using up every month." In many startups, any payment over $X requires dual signatures for exactly this reason. Also, contract bookkeepers aren't expensive (contract CFOs can be, but they're worth it). A second set of eyes--and hands--on the corporate checkbook is crucial. Also, why aren't investors aren't looking at the cash position every month? That is the one critical number--the only one with sudden corporate death at stake--for every single Board meeting until the company is solidly and predictably cash flow positive. 2. "'There wasn't ever full disclosure, and that leads me to believe there was a reason he didn't want anyone to have full disclosure,' says a source." Totally 100% unacceptable. The key execs and the board should be looking at the financials, at least at the bank account/quickbooks level, every month and management should be reviewing them more frequently yet. Especially in a metrics-driven business like e-commerce that requires cash investments for inventory and advertising. 3. "He put the company's inventory on his credit card, a black American Express, which caused him to go into deeper personal debt. He refused to get a corporate card, despite complaining to colleagues when AmEx would call and question company expenses." A huge red flag. If there is intermingling of corporate and personal finances--whether this extreme or just the CEO's sister's law firm does the legal work--investors and co-founders need to fully understand and ensure it's arms-length. Then they need to disentangle the two right away. If you own 100% of the company, feel free to run it "out of your back pocket." But with outside shareholders, whether employees or investors, such a practice is indefensible. In my experience, intertwined personal and professional finances is often the tip of the iceberg in terms of accounting shenanigans. I don't mean to imply that investors should have seen this coming or that Jody set out to do this. But every experienced investor who's been burned this way--and many have--makes financial control issues a topic at the first (and every subsequent) board meeting post-investment until adequate controls are in place.
ChrisNorstrom 14y ago
Before you downvote please take into consideration that I'm just being realistic. Of course you should seek help and calm your mind back into a logical state. Still about 1 million people commit suicide each year. You and I are not going to change that. If you're seriously going to kill yourself, please do NOT use a gun or pills or jumping or cutting wrists or arteries. It's bad enough you've chosen to and finalized your decision to end your life you don't need to traumatize your family and friends with a gruesome death. Use an "Exit bag". It's instant, painless, blood-less, non-gruesome, and peaceful. http://www.youtube.com/watch?v=UWfWl-xJnnY http://www.youtube.com/watch?v=UWfWl-xJnnY Created by a right-to-die group Exit International it's a bag that goes over your head with a tube connected to a helium tank you can purchase at a local party store. Fill the bag up completely with helium, pull it over your head and take a deep breath. You'll pass out instantly and leave the earth in just a few minutes. No blood, no suffering, no bullets. It's bad enough you're committing suicide, you don't want family finding you with your brains splattered all over the place, or your body in a bathtub full of blood. Just because you're hurting yourself by ending your life doesn't mean you need to hurt those that love you anymore than you already are. They'll find you tucked away in your bed, peacefully, and for the last time. They'll appreciate that a lot more than finding you in a pool of blood. The one thing they'll have is the knowledge that you just left the earth peacefully and calmly. Just keeping it real.
- aashaykumar92 14y ago
  Your intentions are good so I won't downvote but this type of post should be pasted on more pertinent forums.
- chris_wot 14y ago
  Exit bags? In other words, it's to make suicide more palatable. I'm sure it has good intentions, but as they say: the road to hell is full of good intentions.
  - chris_wot 14y ago
    Oh that's right. Downvote something you don't like to read. My comment is no more objectionable than the one talking about Exit Bags - devices to enable suicide.
wongwf82 14y ago
I had no idea Groupon played a role until I reach the middle part of the article. I too believe building a company should be a marathon and not a 100m sprint. Trying to sprint 100m puts tremendous pressure on self to succeed and could result in suicide. As Dave McClure said, it is a first world problem in those dark days no matter how dark it is. Founders should look to 9-to-5 and build a long-term company.
adhd 14y ago
There is little information in this story that has not been reported elsewhere. PandoDaily has done a thorough job of covering the death of Jody and ecomom in a thoughtful and factual manner. Except for a light spattering of additional financial numbers, not much of this is revelatory. And the section on Guatemala is just trash. It culminates in an unsubstantiated and innuendo-laden tale, with none other than John McAffee as the sole source. Seriously? Please. (FYI the source who confirmed the meeting doesn't count. Anyone who knew Jody at the time would have heard about that.) To the central point: It is good to talk about the importance of honesty and dealing with the stress of a start-up. By all means, let's open up the conversation again. But articles with such innuendo (no evidence, mind you) -- suggestions of sinister business activities and a Central American fraud scheme -- don't help that conversation. It makes Jody's experience seem distant and unrelatable. Essentially, I fear that an article like this hurts the open conversation because of how crazy the story sounds. An unusual story allows the listeners to reject the valuable truths therein contained. The reality was a lot less mythic and far more heart-breaking.
chris_wot 14y ago
I'm so totally conflicted here. I feel so awfully sorry that he committed suicide, and heavens only knows all the complicated reasons behind why he took his own life. From this account, he seems to have been charismatic, but self-delusional. I only say this because I know someone who seems to be exactly like this. They don't seem to care about being in debt, and they justify themselves for not paying people for their services. They are always positive, but always spinning everything. They don't tell the truth. In short: they are dangerous to be around if you rely on them for any sort of living. Because I was so badly burned by this particular individual, I'll not be spending any time around those who talk up big and who have a bad track record of paying down debt in a reasonable timeframe. It's as simple as that.
psteyn 14y ago
The guy ruined his company, blatantly stole money, probably destroyed many lives, and we are lamenting his suicide? Dafuq?
tomwalker 14y ago
If anyone reading this thread ever has suicidal thoughts then please talk to someone. If you cannot talk to anyone that is close to you, or if you are more comfortable with it, then please find your local phone line such as www.samaritans.org in the UK or www.suicidepreventionlifeline.org in the US
ilamont 14y ago
What a sad story. I know it's easy to say "in retrospect, if we knew x, y, z, it never would have gone this far," but I have to ask: Where was the board before the last round of funding? There is no mention of the CFO or company accountant. Did the company have either? What did he tell investors who asked about who was overseeing the accounts?
jim_doe 14y ago
Re: Marijuana Weed can have an incredibly devastating effect when used as an escape. We have all been told that weed has no withdrawal symptoms and is safer than water. This is simply not true. Being involved in startups can obviously be extremely stressful. Like Jody, I used weed as an escape after a hard day. It allowed me to clear my mind, sleep, and be at peace with the storm that was my life. Over time, the weed worked less and less, I needed to smoke more and more to get the same feeling, and my emotions started to go up and down dramatically, even when stoned. One day, I had a nervous breakdown over something that really wasn't a big deal. After a lot of introspection and discussion with friends, I realized that weed was making my situation worse. It had turned from an escape to a nightmare. It was like a light bulb turned on and I could see everything clearly. For example, I would get really bad headaches and start feeling nauseous around the time I would usually smoke on weekdays (5 PM). If I was in a meeting, I would usually become very moody and frequently had to leave. I never realized it was from the weed, though. I always wrote it off at every occurrence as a virus or a bad meal or just lack of sleep. The day came when I decided to quit. I will give a brief outline of what it was like and how it felt. Day 1: Felt really good and positive about the whole situation. I had cravings at night but was able to ignore them. Day 2: Started to have a hard time eating. I also felt a bit more stressed. Day 3: Woke up with my bed completely soaked from night sweats. I was so dehydrated I gagged all morning and then had to go to work. My moods would go from happy to nearly suicidal all day. I couldn't stomach any solid food and sweated all day. Day 4-5: Waked up both days with my sheets soaked in sweat. Extremely vivid and stressful dreams. Couldn't go to work. Constant panic attacks. Suicidal thoughts. Even liquids besides water or soda were hard to ingest. Day 6: Night sweats weren't as bad. I could start stomaching shakes and some sugary solid foods. My moods started to even out a bit and I didn't get the intense lows like the previous days. Day 7: Night sweats not soaking the sheets anymore. Some food becoming more palatable. Headaches hit me around 5 PM. Day 8-14: Was able to start going back to work. I had to have a lot of shakes to stay fed. The feeling of sobriety starts to hit and everything seems much more clear and lucid. I feel as if I took a drug that gave me hyper focus and mental awareness. I realized that even when not high, my mind was still very hazy and mentally affected while smoking heavily. I was essentially "always stoned". Getting rid of that haze was like opening curtains in a dark room. That was about a year ago. I relapsed and am currently going through the withdrawal process as I type this. I have been up all night because my sweats soaked my bed and I don't want to fall back asleep just to wake up in sweat again. This line from the story really hit home this morning: Sherman had battled clinical depression, and his mind may have been clouded by marijuana, which he often smoked to self-medicate. Now, I want to make it clear that I am not trying to claim this is the reason Jody did what he did. I simply feel that it is a VERY important discussion. This comment below made me very angry/concerned, enough to create an anon account and post this novel. Stopped reading at the speculation that marijuana may have contributed to his suicide. The fuck??? If you claim marijuana withdrawals don't exist, you are ignorant. Talk to people who have used the drug as a life escape and then quit. Most drugs are worse than marijuana but we can't downplay its faults. I wanted to include some links for anyone that is skeptical. 100's of withdrawal testimonies: http://www.steadyhealth.com/how_long_do_marijuana_withdrawal_symptoms_last_t137003.html http://www.steadyhealth.com/how_long_do_marijuana_withdrawal... Some Facts About Marijuana Withdrawals: http://www.choosehelp.com/detox/10-life-or-experiential-factors-that-influence-the-severity-of-marijuana-withdrawal-symptoms http://www.choosehelp.com/detox/10-life-or-experiential-fact... Studies Find Withdrawals Are Real: http://www.foxnews.com/health/2012/09/27/marijuana-withdrawal-is-real-study-says/ http://www.foxnews.com/health/2012/09/27/marijuana-withdrawa... http://www.dailymail.co.uk/health/article-2209405/Cannabis-users-experience-withdrawal-symptoms-acute-tobacco-smokers-quit.html http://www.dailymail.co.uk/health/article-2209405/Cannabis-u... More Marijuanan Withdrawal Studies and Testimonials: http://brainblogger.com/2009/06/15/marijuana-withdrawal-syndrome/ http://brainblogger.com/2009/06/15/marijuana-withdrawal-synd... Chronic Marijuana Smoking Affects Brain Chemistry, Molecular Imaging Shows: http://www.sciencedaily.com/releases/2011/06/110606131705.htm http://www.sciencedaily.com/releases/2011/06/110606131705.ht... I can't find the direct source, but I read that the loss of appetite is due to an "overloading" of the Cannabinoid receptors. Those are the receptors in your brain that marijauna's active chemicals bind to. At some point, these receptors get overloaded and only respond to excess marijuana conception. They get less and less sensitive over time, building up your tolerance to marijuana. Your cannabinoid receptors are what are used to tell your brain you are hungry. When they don't respond to normal body signals and only marijuana consumption, then you are at a state where eating is only possible while high.
candybar 14y ago
Very sad, RIP. His story, to me, reminds me as to why the most successful entrepreneurs are not gregarious salespeople who are good at connecting with people, but focused, dorky introverts. Connection leads to social pressure and being good at convincing others that dubious ideas are legit also means being good at convincing yourself that dubious ideas are legit.
ttrreeww 14y ago
Wow, this can be turned into a AAA movie.
teeja 14y ago
Might sound callous, but when people want something so bad that they'll commit suicide when it doesn't work out, that's a serious mistake. Lots of things don't work out, but you can't get to the ones that do if you're gone.

210 points by chaz 14y ago

dmor 14y ago

It really pisses me off that they are publishing this - the news of Jody's death devastated a lot of people and I don't see what new information is being reported here. The Guatemala story is hearsay. This makes me so angry.

ScotterC 14y ago
I disagree. I think it's very healthy to open up the conversation again. I've been surprised at how much it hasn't been talked about in the last few months (not referring to online but in person). It was weird to be at startup events shortly after Jody's passing with people who knew him well and have absolutely no mention of it.
mgkimsal 14y ago
How is it hearsay any more so than quotes from McClure and others? McAfee was quoted about their discussion, and Jody clearly went there - shouldn't be any dispute about that. Why does this 'piss you off'? Seemed entirely reasonable to me. EDIT: Perhaps you don't see any 'new' information here, but a lot of this was news to me. A great many more of us live outside the bubble that is the few square miles on the planet where so much tech activity takes place. We all didn't know Jody personally, and there seemed precious little in the days after his death that was anything more than "we didn't see this coming" and "he was always so full of life". Perhaps this will serve as a call to investors to have a closer eye o the books, regardless of how charismatic the head of the company may be. And I don't just mean for financial reasons - other people having a closer view of the books might have caused some serious discussions to happen - a forced face to face, as it were - which might have allowed them to see what was going on and offer help. Or it might have pushed him to suicide faster (assuming it was suicide) - who knows?
- doktrin 14y ago
  I have to agree, in that the bulk of this story was news to me as well. Granted, my only prior exposure were the discussions here on HN immediately following his untimely passing. It's inarguably tragic. What rang the truest to me were the mentions by McClure towards the bottom about keeping problems & ambitions, magnified by our own bubbles and echo chambers, in perspective.
- rdl 14y ago
  The issue with statements from John McAfee is that the term "pathological liar" would be an understatement. DMC, on the other hand, or really most other people in tech, are generally fairly reasonable sources for things where they have no particular reason to lie. McAfee makes weev look transparent.
deleted 14y ago
[deleted]
untog 14y ago
It's very difficult when someone you know in real life becomes a news story. People that have never met them will pass judgement, including the journalists who write about them. But the inarguable fact is that people are interested in this story, and there is probably much to be gained from being more open about the stresses of running your own company. I can see how seeing his name again would be very unwelcome, and I absolutely sympathise. But I think it is an unfortunate fact of life. If you knew him well, nothing you will ever see written on the web about him will match the person you knew.

michaelpinto 14y ago

I think many of us have misconceptions about what drives someone to commit suicide, and thus it becomes a taboo mental health topic which isn't healthy. Often it can be a behavior that could be triggered by anything from drugs to mental disorders, and there's even a feeling that genetics may play a role. I had a wonderful friend who passed away because of this and the one thing that it taught me was to talk about it. I'd urge everyone reading this to at least read up on the wikipedia page on the topic to educate yourself and get an overview: http://en.wikipedia.org/wiki/Suicide http://en.wikipedia.org/wiki/Suicide

aashaykumar92 14y ago

If you read this as a story, it's actually really well written--it's a great progression. There may not be one clear, overall thesis, but each section seems to have its own thesis and each is supported quite well. I never knew Jody but from the story, I have two takeaways: 1) Jody was a great person. The reason why I mention this first is to make it clear that the article really strives to show this. And he truly seemed to have a big heart. 2) Always be as open as possible. Many times, we don't want our problems to become others' problems so we hide it. And then it builds and it leads to a large amount of secrecy that could have been avoided. It goes back to the childhood saying we all hear, "No question is a dumb question." This phrase ultimately is saying that you might as well ask a question so that you are not falling behind in knowledge--whether it's academic or not. And please don't assume that I am saying Jody's suicide was purely because he didn't disclose Ecomom's financials; I just believe that if he would have been more open, more help could have been offered--financially and psychologically. Of course, I gained more takeaways than this but these are the two I thought were most worth sharing.

johnpowell 14y ago

If true.. >One childhood friend recalled a time when Sherman committed insurance fraud. He described driving on a highway with Sherman when they were 16. Suddenly, Sherman told his friend to "buckle up." He slammed on the brakes and caused an accident. Later, the friend says, Sherman would collect thousands of dollars from insurance companies for the self-inflicted injuries. Fuck the dude.

crazypyro 14y ago
I don't think its really okay to post "Fuck the dude." in a story about his suicide and failed tech startup. The guy was 16 at the time. It even says he had a rough childhood. Are you really going to post "Fuck the dude" when you know nothing of the situation or what actually happened? Clearly, he was immature at the time, but I don't think judging a person by what they did at 16 years of age is very appropriate.
- jacquesm 14y ago
  It could have easily killed a number of innocent others. A rough childhood is not an excuse, if you're old enough to have a driving license then you're old enough to think through the consequences of slamming on your brakes at highway speeds.
  - Udo 14y ago
    In any case, we're talking about something he did when he was 16. Sure, it's in the story because it definitely fits with the overall "bad decisions" theme, but I'm sure most people did stupid stuff at that age.
    - jacquesm 14y ago
      I'm pretty sure most people did not do reckless stuff endangering people going about their daily business by purposefully creating a car accident. There is stupid and there is malicious, this is way beyond stupid. After all, he did tell his friend to buckle up which indicates he was aware of the risk, did he tell the people in the car behind him to buckle up as well?

scottbartell 14y ago

Running a startup is fucking hard and fucking stressful. I'm learning that.

pyj 14y ago
It seems to me that some entrepreneurs in some masochistic way likes the stress. My memory of my last startup was pretty painful, but somehow can't help going at it again. Some of us may not be made for living a simple life, instead we need that freedom, that constant possibility to fuck it all up.
madaxe 14y ago
Don't worry, it only gets worse. :)

noahth 14y ago

Stopped reading at the speculation that marijuana may have contributed to his suicide. The fuck???

fuzzix 14y ago
I don't smoke it - it makes me introspective, paranoid and miserable. I also laugh like a jackass at George Carlin and get the munchies, but the other stuff happens too.
- beryllium 14y ago
  I don't need marijuana for any of those things. Lucky me?
wpietri 14y ago
Is that the one mood-altering drug that you think can't contribute to suicide? Or do you believe that none of them can?
- gargoiler 14y ago
  Haven't you heard? marijuana has absolutely no bad effects. It's apparently safer than water and should be legalised immediately! What could go wrong?!

hncommenter13 14y ago

I didn't know Jody, so I won't comment on him personally. Speaking as a former investor regarding the financial situation though...never ever ever ever. Financial controls aren't important just because VCs are greedy: they keep companies alive and keep you out of court (or jail). I've seen situations in which cash didn't quite reconcile to what was expected; in some, the people involved made restitution and were fired. In others, they went to prison. A company with no effective financial control is flying blind and, someday, will run into the mountain in the clouds. The article identifies some key warning signs. 1. "...not even sharing the company's financial information with his co-founder, Emily Blakeney. Sources admit that was strange in retrospect. ... Sources say Sherman was the only person with access to the company's bank account and invoices. Only he knew how much cash Ecomom was using up every month." In many startups, any payment over $X requires dual signatures for exactly this reason. Also, contract bookkeepers aren't expensive (contract CFOs can be, but they're worth it). A second set of eyes--and hands--on the corporate checkbook is crucial. Also, why aren't investors aren't looking at the cash position every month? That is the one critical number--the only one with sudden corporate death at stake--for every single Board meeting until the company is solidly and predictably cash flow positive. 2. "'There wasn't ever full disclosure, and that leads me to believe there was a reason he didn't want anyone to have full disclosure,' says a source." Totally 100% unacceptable. The key execs and the board should be looking at the financials, at least at the bank account/quickbooks level, every month and management should be reviewing them more frequently yet. Especially in a metrics-driven business like e-commerce that requires cash investments for inventory and advertising. 3. "He put the company's inventory on his credit card, a black American Express, which caused him to go into deeper personal debt. He refused to get a corporate card, despite complaining to colleagues when AmEx would call and question company expenses." A huge red flag. If there is intermingling of corporate and personal finances--whether this extreme or just the CEO's sister's law firm does the legal work--investors and co-founders need to fully understand and ensure it's arms-length. Then they need to disentangle the two right away. If you own 100% of the company, feel free to run it "out of your back pocket." But with outside shareholders, whether employees or investors, such a practice is indefensible. In my experience, intertwined personal and professional finances is often the tip of the iceberg in terms of accounting shenanigans. I don't mean to imply that investors should have seen this coming or that Jody set out to do this. But every experienced investor who's been burned this way--and many have--makes financial control issues a topic at the first (and every subsequent) board meeting post-investment until adequate controls are in place.

ChrisNorstrom 14y ago

Before you downvote please take into consideration that I'm just being realistic. Of course you should seek help and calm your mind back into a logical state. Still about 1 million people commit suicide each year. You and I are not going to change that. If you're seriously going to kill yourself, please do NOT use a gun or pills or jumping or cutting wrists or arteries. It's bad enough you've chosen to and finalized your decision to end your life you don't need to traumatize your family and friends with a gruesome death. Use an "Exit bag". It's instant, painless, blood-less, non-gruesome, and peaceful. http://www.youtube.com/watch?v=UWfWl-xJnnY http://www.youtube.com/watch?v=UWfWl-xJnnY Created by a right-to-die group Exit International it's a bag that goes over your head with a tube connected to a helium tank you can purchase at a local party store. Fill the bag up completely with helium, pull it over your head and take a deep breath. You'll pass out instantly and leave the earth in just a few minutes. No blood, no suffering, no bullets. It's bad enough you're committing suicide, you don't want family finding you with your brains splattered all over the place, or your body in a bathtub full of blood. Just because you're hurting yourself by ending your life doesn't mean you need to hurt those that love you anymore than you already are. They'll find you tucked away in your bed, peacefully, and for the last time. They'll appreciate that a lot more than finding you in a pool of blood. The one thing they'll have is the knowledge that you just left the earth peacefully and calmly. Just keeping it real.

aashaykumar92 14y ago
Your intentions are good so I won't downvote but this type of post should be pasted on more pertinent forums.
chris_wot 14y ago
Exit bags? In other words, it's to make suicide more palatable. I'm sure it has good intentions, but as they say: the road to hell is full of good intentions.
- chris_wot 14y ago
  Oh that's right. Downvote something you don't like to read. My comment is no more objectionable than the one talking about Exit Bags - devices to enable suicide.

wongwf82 14y ago

I had no idea Groupon played a role until I reach the middle part of the article. I too believe building a company should be a marathon and not a 100m sprint. Trying to sprint 100m puts tremendous pressure on self to succeed and could result in suicide. As Dave McClure said, it is a first world problem in those dark days no matter how dark it is. Founders should look to 9-to-5 and build a long-term company.

adhd 14y ago

There is little information in this story that has not been reported elsewhere. PandoDaily has done a thorough job of covering the death of Jody and ecomom in a thoughtful and factual manner. Except for a light spattering of additional financial numbers, not much of this is revelatory. And the section on Guatemala is just trash. It culminates in an unsubstantiated and innuendo-laden tale, with none other than John McAffee as the sole source. Seriously? Please. (FYI the source who confirmed the meeting doesn't count. Anyone who knew Jody at the time would have heard about that.) To the central point: It is good to talk about the importance of honesty and dealing with the stress of a start-up. By all means, let's open up the conversation again. But articles with such innuendo (no evidence, mind you) -- suggestions of sinister business activities and a Central American fraud scheme -- don't help that conversation. It makes Jody's experience seem distant and unrelatable. Essentially, I fear that an article like this hurts the open conversation because of how crazy the story sounds. An unusual story allows the listeners to reject the valuable truths therein contained. The reality was a lot less mythic and far more heart-breaking.

chris_wot 14y ago

I'm so totally conflicted here. I feel so awfully sorry that he committed suicide, and heavens only knows all the complicated reasons behind why he took his own life. From this account, he seems to have been charismatic, but self-delusional. I only say this because I know someone who seems to be exactly like this. They don't seem to care about being in debt, and they justify themselves for not paying people for their services. They are always positive, but always spinning everything. They don't tell the truth. In short: they are dangerous to be around if you rely on them for any sort of living. Because I was so badly burned by this particular individual, I'll not be spending any time around those who talk up big and who have a bad track record of paying down debt in a reasonable timeframe. It's as simple as that.

psteyn 14y ago

The guy ruined his company, blatantly stole money, probably destroyed many lives, and we are lamenting his suicide? Dafuq?

tomwalker 14y ago

If anyone reading this thread ever has suicidal thoughts then please talk to someone. If you cannot talk to anyone that is close to you, or if you are more comfortable with it, then please find your local phone line such as www.samaritans.org in the UK or www.suicidepreventionlifeline.org in the US

ilamont 14y ago

What a sad story. I know it's easy to say "in retrospect, if we knew x, y, z, it never would have gone this far," but I have to ask: Where was the board before the last round of funding? There is no mention of the CFO or company accountant. Did the company have either? What did he tell investors who asked about who was overseeing the accounts?

jim_doe 14y ago

Re: Marijuana Weed can have an incredibly devastating effect when used as an escape. We have all been told that weed has no withdrawal symptoms and is safer than water. This is simply not true. Being involved in startups can obviously be extremely stressful. Like Jody, I used weed as an escape after a hard day. It allowed me to clear my mind, sleep, and be at peace with the storm that was my life. Over time, the weed worked less and less, I needed to smoke more and more to get the same feeling, and my emotions started to go up and down dramatically, even when stoned. One day, I had a nervous breakdown over something that really wasn't a big deal. After a lot of introspection and discussion with friends, I realized that weed was making my situation worse. It had turned from an escape to a nightmare. It was like a light bulb turned on and I could see everything clearly. For example, I would get really bad headaches and start feeling nauseous around the time I would usually smoke on weekdays (5 PM). If I was in a meeting, I would usually become very moody and frequently had to leave. I never realized it was from the weed, though. I always wrote it off at every occurrence as a virus or a bad meal or just lack of sleep. The day came when I decided to quit. I will give a brief outline of what it was like and how it felt. Day 1: Felt really good and positive about the whole situation. I had cravings at night but was able to ignore them. Day 2: Started to have a hard time eating. I also felt a bit more stressed. Day 3: Woke up with my bed completely soaked from night sweats. I was so dehydrated I gagged all morning and then had to go to work. My moods would go from happy to nearly suicidal all day. I couldn't stomach any solid food and sweated all day. Day 4-5: Waked up both days with my sheets soaked in sweat. Extremely vivid and stressful dreams. Couldn't go to work. Constant panic attacks. Suicidal thoughts. Even liquids besides water or soda were hard to ingest. Day 6: Night sweats weren't as bad. I could start stomaching shakes and some sugary solid foods. My moods started to even out a bit and I didn't get the intense lows like the previous days. Day 7: Night sweats not soaking the sheets anymore. Some food becoming more palatable. Headaches hit me around 5 PM. Day 8-14: Was able to start going back to work. I had to have a lot of shakes to stay fed. The feeling of sobriety starts to hit and everything seems much more clear and lucid. I feel as if I took a drug that gave me hyper focus and mental awareness. I realized that even when not high, my mind was still very hazy and mentally affected while smoking heavily. I was essentially "always stoned". Getting rid of that haze was like opening curtains in a dark room. That was about a year ago. I relapsed and am currently going through the withdrawal process as I type this. I have been up all night because my sweats soaked my bed and I don't want to fall back asleep just to wake up in sweat again. This line from the story really hit home this morning: Sherman had battled clinical depression, and his mind may have been clouded by marijuana, which he often smoked to self-medicate. Now, I want to make it clear that I am not trying to claim this is the reason Jody did what he did. I simply feel that it is a VERY important discussion. This comment below made me very angry/concerned, enough to create an anon account and post this novel. Stopped reading at the speculation that marijuana may have contributed to his suicide. The fuck??? If you claim marijuana withdrawals don't exist, you are ignorant. Talk to people who have used the drug as a life escape and then quit. Most drugs are worse than marijuana but we can't downplay its faults. I wanted to include some links for anyone that is skeptical. 100's of withdrawal testimonies: http://www.steadyhealth.com/how_long_do_marijuana_withdrawal_symptoms_last_t137003.html http://www.steadyhealth.com/how_long_do_marijuana_withdrawal... Some Facts About Marijuana Withdrawals: http://www.choosehelp.com/detox/10-life-or-experiential-factors-that-influence-the-severity-of-marijuana-withdrawal-symptoms http://www.choosehelp.com/detox/10-life-or-experiential-fact... Studies Find Withdrawals Are Real: http://www.foxnews.com/health/2012/09/27/marijuana-withdrawal-is-real-study-says/ http://www.foxnews.com/health/2012/09/27/marijuana-withdrawa... http://www.dailymail.co.uk/health/article-2209405/Cannabis-users-experience-withdrawal-symptoms-acute-tobacco-smokers-quit.html http://www.dailymail.co.uk/health/article-2209405/Cannabis-u... More Marijuanan Withdrawal Studies and Testimonials: http://brainblogger.com/2009/06/15/marijuana-withdrawal-syndrome/ http://brainblogger.com/2009/06/15/marijuana-withdrawal-synd... Chronic Marijuana Smoking Affects Brain Chemistry, Molecular Imaging Shows: http://www.sciencedaily.com/releases/2011/06/110606131705.htm http://www.sciencedaily.com/releases/2011/06/110606131705.ht... I can't find the direct source, but I read that the loss of appetite is due to an "overloading" of the Cannabinoid receptors. Those are the receptors in your brain that marijauna's active chemicals bind to. At some point, these receptors get overloaded and only respond to excess marijuana conception. They get less and less sensitive over time, building up your tolerance to marijuana. Your cannabinoid receptors are what are used to tell your brain you are hungry. When they don't respond to normal body signals and only marijuana consumption, then you are at a state where eating is only possible while high.

candybar 14y ago

Very sad, RIP. His story, to me, reminds me as to why the most successful entrepreneurs are not gregarious salespeople who are good at connecting with people, but focused, dorky introverts. Connection leads to social pressure and being good at convincing others that dubious ideas are legit also means being good at convincing yourself that dubious ideas are legit.

ttrreeww 14y ago

Wow, this can be turned into a AAA movie.

teeja 14y ago

Might sound callous, but when people want something so bad that they'll commit suicide when it doesn't work out, that's a serious mistake. Lots of things don't work out, but you can't get to the ones that do if you're gone.