It’s been a wild time for tech implosions. We asked top PR experts to rank how well — or badly — the fallout has been managed.
There’s been some unanticipated drama in the tech industry over the past year.
Old controversies came to a culmination while new catastrophes bubbled to the surface.
We asked PR experts well-versed in Silicon Valley to rank the crises from worst- to best-managed.
In the past 12 months:
Enough said.
Crises like these often dovetail with the desire by the people and companies affected to soften the public-relations blow.
We asked top PR experts to rank recent tech industry catastrophes, from the absolute worst in image management to the best. Here are their verdicts.
FTX: tied for first place 🥇
Sam Bankman-Fried’s crypto empire began unraveling in November 2022, and left the world in shock. His net worth plummeted amid allegations that he had been misusing customer funds. He was hit with 8 criminal charges including fraud and money laundering, extradited from the Bahamas, released on $250 million bail, and now awaits trial tentatively set for October.
As the crisis continues to unfold, Bankman-Fried has been giving interviews to media outlets ranging from DealBook to Puck News. In January, he launched his own newsletter on Substack.
According to several PR experts that Insider spoke with, Bankman-Fried’s media frenzy has been his biggest mistake.
“With great legal minds behind him aka his PARENTS – surely someone was insisting he not do a press tour of ANY kind. But the amount of interviews he gave was astonishing,” Brooke Hammerling, founder of strategic communications firm The New New Thing, told Insider by email. “A prosecutor’s dream I have to imagine for I am SURE something or THINGS he said in those interviews will come back to bite him in the ass.”
Two PR experts that Insider spoke said there are several similarities between the way Holmes and Bankman-Fried handled their respective crises. These experts especially lament the number of interviews, public appearances, and speeches the founders have given.
Maggie Squires, senior vice president of Moxie Communications Group, wrote to Insider by email, “This is a tempting path for charismatic founders, who often charmed their way into success in the first place, but it doesn’t work. You need a clear, concise and truthful message that’s shared with control.”
Two PR experts Insider spoke to agree that Musk’s changes are for the worst.
“He quickly went in there with zero plan, zero strategy, and it was a dumpster fire,” said one PR expert, who asked not to be named.
The expert said that Musk’s decision to revamp Twitter Blue was a particularly unwise decision, as it led to a proliferation of parody accounts on the platform.
“It wasn’t just funny parody accounts. These accounts moved markets,” they said. “They started losing tons of advertisers, and brands no longer wanted to be on Twitter. You’re not going to get your revenue by users paying $10 for Twitter Blue. You’re going to get your revenue by the brands, by the advertisers.”
Since Musk took over Twitter, more than 500 of the platform’s top advertisers have paused spending on the platform, according to The Information.
Salesforce/Slack: fourth place 🏅
A few days into 2023, cloud-based software company Salesforce, informed 1,000 employees via email that their jobs would be cut. The following day, Insider reported that the company’s CEO, Mark Benioff, held a “rambling, two-hour all-hands meeting” where he dodged questions about the layoffs.
“I didn’t want to put a final line on it. I didn’t want to say, ‘This is it, one and done,” Benioff said, according to leaked audio heard by Insider.
At one point, Benioff even compared the layoffs to death, casting the company’s predicament in the language of a spiritual moment, Insider reported.
“At the kickoff every year, you know, we, um, have a moment where we always say goodbye to everyone who’s died during the year. And, um, loss is really difficult and losing folks, and especially losing our trusted colleagues and our managers or employees, it’s very similar, uh, in a lot of ways for me,” Benioff said.
Employees vented their frustrations on Slack. News of the leaked meeting circulated widely across the media.
Hammerling told Insider by email, “This is about a CEO who thinks he knows better and probably didn’t listen or even get guidance from comms or HR on how to handle the layoffs appropriately.”
She added, “also the blame game was HIGH putting the blame on the staff as opposed to leadership taking responsibility.”
WeWork: fifth place 🏅
In a year of catastrophes ranging from shocking to simply dismal, the story of Adam Neumann remains a rare bright spot.
Now, he’s launching a new venture called Flow, a rental housing startup, that’s already received a $350 million check from the well-known venture firm, Andreessen Horowitz. It was the largest individual check the firm has ever written, Insider reported.
Safe to say, Neumann isn’t faring as poorly now.
“Adam went very quiet for years after the WeWork news broke. When he was ready to reenter the public sphere, he was highly selective with his communications, doing just one profile piece with the Financial Times,” Squires said.
While the piece wouldn’t be considered positive, Squires said it looked “expertly crafted” with quotes that vouch for Neumann’s competence as an investor.
“A downfall narrative like his won’t change overnight, but he’s quietly chipping away at it enough to regain both founder and investor trust,” Squires wrote.
But in a lawsuit filed against Frank in December 2022, JPMorgan said the company fabricated millions of those accounts. According to the suit, Frank likely had closer to 300,000 users.
The plot twist here is that Frank’s founder, Charlie Javice, also filed a suit against JPMorgan, where she claims the bank “manufactured a for-cause termination in bad faith” among other grievances.
One PR expert who spoke on background told Insider that Javice has already done as much as she can with her legal strategy to make it seem like JPMorgan is “the bad guy.” And while Javice’s legal chess moves are interesting, they won’t necessarily pay off.
Javice, a former Forbes 30 Under 30 honoree, also joins the likes of other famous fraudsters like Elizabeth Holmes and Sam Bankman-Fried who made the list.
Another expert joked that it might be time to reconsider who goes on the 30 Under 30 list.
In the long list of boring, behind-the-scenes stuff for deals to get done, due diligence ranks close to the top.
The entire premise is a bit awkward: “Hey, you seem like a truthful person and I totally believe what you’re saying … But would you mind if I double-checked everything you just said about your company because you could be a liar and fraud? K, thxs.”
But it’s important! Take the show “Shark Tank.” A recent analysis by Forbes of 112 businesses offered deals on the show found that roughly half of them didn’t close. One of the main reasons? Info uncovered during due diligence.
The irony, of course, is that one of the most prominent Sharks — Kevin O’Leary, aka Mr. Wonderful — is wrapped up in the FTX debacle, a shining example of why strong due diligence matters.
While the industry reaction to FTX and Frank might seem obvious (We should double check all these numbers on potential deals), there’s plenty of nuance in how the dealmaking environment might shift, as the story points out.
One of the more fascinating knock-on effects is how buyers might leverage FTX and Frank as a way to get better terms on deals.
On Wall Street, someone else’s pain is another’s opportunity. It would be very on-brand for firms to use those failures in due diligence to their own advantage.
4. Bloomberg’s hiring. The financial news and data giant is adding 1,000 new people this year, with the majority focused on data, product, and engineering. More on the hiring plans here.
5. You had ONE job! Turns out all that madness at the opening bell at the New York Stock Exchange earlier this week can be pinned on one person forgetting to turn off a backup system, Bloomberg reports. Click here to read more about the mistake.
6. If your economic policy includes raising the debt ceiling, you are a drunk, per Ray Dalio. The Bridgewater Associates founder didn’t hold back when discussing the US debt limit. More thoughts from Ray here.
7. The world’s most expensive text messages. Morgan Stanley fined some employees more than $1 million each for violations stemming from what they deemed to be inappropriate use of messaging apps, Bloomberg reports. For a deep dive into why traders can’t seem to quit apps like WeChat and WhatsApp, check out our feature.
8. For the Tesla shareholders… I know you’re a passionate bunch, so we compiled everything Wall Street is saying about the EV maker’s fourth-quarter earnings. Get the rundown here.
10. Which fast-food joint has the best coffee? We tried a small, black coffee (the only way to take your coffee; grow up, Peter Pan.) from Wendy’s, McDonald’s, Sonic, and Burger King. Here’s who came out on top.
