Last post on Collision Conference and Keiretsu Forum

Yesterday I wrote Hey startup parasites! We don't have time for you. In that post, I explicitly pointed my finger at the deceptive tactics used by Kieretsu Forum and Collision Conference to make money on startups. The people behind both of the organizations have contacted me to apologize and to defend their fees and legitimacy. Paddy G wrote lengthy replies here and here.

So to both, I want to be very clear - the big problem I have is not that you charge, but the way you mislead startups in the way you approach us, waste our time, create a false sense of exclusivity and conceal the fee in the initial conversations. If you were to make the fees you charge clear and explicit from the first contact, I wouldn't be blogging about either of you.

1. Keiretsu

You have told me today that the month of conversations I had, with not a single mention of the fact that you charge $4,500 for the right to pitch your angel investors, was just an honest mistake. You said that it never happens and I am just unlucky. You argue that the $4,500 fees that you charge are legitimate and provide value to the startup.

If that is the case, why not be upfront about these fees? There isn't a single mention of the exorbitant fee on your main Entrepreneur Page. Nor do you mention it on the application page. Another simple mistake? Or do you think it is not important? Or perhaps you realize how totally insane this fee is and how much of an outlier you are with this charge? Just glance at this nascent information sheet that I started; you are in the first place and that's not a good place on this sheet.

Considering the scathing coverage you got in Business Insider in 2009, claiming that you forgot to mention the fees on your website is stretching my very flexible imagination beyond its limits.

2. Collision Conference

You say that your website is very clear on the fees with:

“Each week we selected 25 early stage startups from around the world to exhibit for free as part of our Collide Program. The bigger tech companies pay $9,950 to exhibit, meaning exciting, disruptive, early-stage startups can afford to attend no matter what. All they will pay is a discounted price for tickets and Collide registration, and we’ll give them a free exhibition stand.”

No, that isn't clear at all. Let me highlight the clear parts to you "Each week we selected 25 early stage startups from around the world to exhibit for free as part of our Collide Program." To me, that says "free." Then you say "The bigger tech companies pay $9,950 to exhibit, meaning exciting, disruptive, early-stage startups can afford to attend no matter what." To me, that again says "free." Then you say "All they will pay is a discounted price for tickets and Collide registration, and we’ll give them a free exhibition stand" and this part is San Francisco fog. I see the "free" in there again. I don't see any clear fees you will charge. How am I supposed to know that this is you saying, "Friend, we have a bargain here - buy this shirt and the sleeves are FREE!"

Your other conference in Asia, Rise has this beautiful image:

And in the fine print underneath, the same text you quote above. No, this isn't how clarity is defined.
I am not a communications major, but you can simplify your messaging and get the pricing across more effectively if you get rid of the misleading "FREE" and instead say, "$1,450 if we invite you and you are selected."

And I need to remind you - I didn't come to you via the website. You reached out and said that you are interested in protocols.io. You had me present, asked questions, and told me that we have a chance to be selected to present because what we are doing is important and unusual. When I asksed how you heard of us, you said, "You were referred. We reach out to companies based on the high quality referrals from our trusted network of advisors." The gullible schmuck in me thought that it may be on the heels of our FREE appearance at LeWeb. Of course, once you "selected" us in your rigorous judging, we got the e-mail letting us know about the great honor of being selected, invited, and having the right to get the free exhibit table if we pay you a mere $1,450 instead of $10K.
-----------------------------------------------------------
In summary, you both practice deceiving and misleading tactics. I have wasted enough time on your organizations, and I have no further plans to engage in a discussion. It is entirely possible that I am an idiot and simply didn't understand your words or didn't look in the right places. Instead of playing "he said, she said," I will just point people to the countless comments about Kieretsu (here, here and here) and Collision Conference (here and here). There are certainly lots of folks out there feeling the exact same way as me.
------------------------------------------------------------
[UPDATE 4/20/15. There are 34 chapters of Keiretsu. If each one screens 5 companies per month, as does the South California Chapter. That's 5*34*12 = 2,040 companies per year. Let's be conservative and say 1K screened companies. Yet, only 34 companies are listed in the 2014 portfolio. So the startups might have paid 1,000 * $4,500 = $4.5m to Keiretsu with over 90% of them losing time and getting nothing in return.]

Hey startup parasites! We don't have time for you.

I am a good bullshit detector. Apparently, not good enough to have sensed that Keiretsu Forum and Collision Conference are parasites. Congratulations to both of you for wasting my time! Well done! You both reached out, pretended to screen our startup, asked good questions, made me present, and then kindly gave me the honor and opportunity to spend thousands of dollars for no good reason.

About once every day or two, I get a spam from some pay-to-pitch event. They are usually easy to spot and trash. But the two above were special. The woman from Collision Conference interviewed me, asked about our business model and strategy, then told me she would encourage their screening committee to invite protocols.io because what we are doing is unusual and has huge social impact. A week passed, and we got the great news that we are indeed getting invited! Not only were we selected after their rigorous application round, but because we are invited, the cost of attending this conference would be reduced  from $9,950 to a mere $1,450.

I curtly replied that when we were invited to present at LeWeb, our $1,400 entrance fee was waived entirely. And the many other conferences that I attend when invited as a speaker, not only waive registration but also typically pay for the lodging and travel. I was going to let it go at that, but today's Keiretsu experience made me write this blog because these folks waste time that startups do not have.

The Keiretsu Forum contacted us a month ago to learn more about protocols.io. Then a phone call for a quick interview. A request to enter our information into their platform. Then a screening conference call were I presented our deck to two people. A week later, the next round where I presented to a bigger screening committee with 4-5 people on the call. Then a request to address some of their concerns before we move to the actual pitch to their investors. And finally, a "by the way" note that they charge $4,500 to pitch their angels. The full egregious exchange is below. 

Of course, as soon as I got this, I searched for "Keiretsu scam" on google and found two excellent articles on BusinessInsider: My Latest War: Angels Who Charge Startups To PitchRead and The Amazing Response To My War Against Sleazebags Who Charge Startups To Pitch. Yes, I should have done this search before taking the call, but I don't have the time. 

The irony is that my lack of time as a startup co-founder is what allows these parasites to waste more of my time. I am not going to get into a discussion of whether it makes sense to pay $500 to attend  an event where some VCs will speak for 20 minutes and then quickly escape, or pay to pitch angels who will most likely not invest in your startup, or pay an unknown conference to present your startup. Instead, I just made a very simple Google Spreadsheet to crowdsource information on which events charge and how much. I hope this will help us and others to avoid wasting time on the parasites.

[UPDATE 1: The comments on Hacker News in response to this post are very revealing.]
[UPDATE 2: Several people from Keiretsu Forum have contacted me apologizing and saying this was a mistake. Apparently they always warn about the fee from the first phone call. Except, they don't mention any fees on their main Entrepreneurs page or the Application page. If you think this is a legitimate reasonable charge, why not be upfront about it?]
[UPDATE 3: Keiretsu and Collision have contacted me to apologize and defend their organizations. My last post in response.]

---------------------------------------------------------------
[Update April 16, 2015]
Collision Conference claims that they are very transparent that they charge startups $1450-$1950 after inviting and screening/selecting. Here is how their clear pricing page looks:

The only clear thing about it is "FREE."

---------------------------------------------------------------
[UPDATE 4/20/15. There are 34 chapters of Keiretsu. If each one screens 5 companies per month, as does the South California Chapter. That's 5*34*12 = 2,040 companies per year. Let's be conservative and say 1K screened companies. Yet, only 34 companies are listed in the 2014 portfolio. So the startups might have paid 1,000 * $4,500 = $4.5m to Keiretsu with over 90% of them losing time and getting nothing in return.]]
---------------------------------------------------------------


Forwarded conversation
Subject: Keiretsu Forum - ZappyLab
------------------------
From: <zzz>
Date: Tue, Apr 14, 2015 at 10:52 AM
To: Lenny Teytelman <lenny@zappylab.com>

Hello Lenny,

Hope you had a great weekend. After reviewing the presentation I had the following comments.

- "Both have high valuations, especially Zappy. Hard to determine market size for Zappy but I think if they get those niche eyeballs they are valuable to companies that sell them"


- "There was no talk about how much they expect to be able to charge. What they expect as far as timing of revenues, break even plan, revenues at exit, etc. they really need to explain and show proforma expectations."
If we can work on this, you are ready to present on our April forums.


Best,ZZZ


Keiretsu Forum Southern California
270 Bristol, Suite 200
Costa Mesa, CA 92626

A region within the worlds largest network of Angel Investors.  Keiretsu Forum Global has 34 chapters on 3 continents with 1400 accredited investor members. Our founding team of angel investor members, along with our partners and sponsors, are committed to growing the community of investors who are interested in funding entrepreneurial opportunities and providing valuable resources for their growth. Our goal is to grow our community of investors by providing an international platform to showcase the most promising opportunities, ultimately creating the right environment, a Keiretsu, for everyone's potential success with ROI.
Since Keiretsu Forum's founding in 2000, its members have invested over $460m in companies in technology, consumer products, healthcare/life sciences, real estate and other segments with high growth potential. Forum members collaborate in the due diligence, but make individual investment decisions, with rounds in the range of $250k-$2m. Keiretsu Forum's community is strengthened through education on angel investing, as well as charitable giving.   
----------
From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 4:30 PM

Thank you ZZZ.

Had a full day of meetings and will respond tonight/tomorrow.
To clarify, the first question is about the market size?

Best,
Lenny



----------
From: <zzz>
Date: Tue, Apr 14, 2015 at 4:34 PM

The first statement is from the valuation aspect and the second is the addressable market size.

Just to clarify, because I think I didn't write it down on any email, we do charge a $4,500 fee for the whole process of presenting and joining the network.

Best,
ZZZ



----------
From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 5:08 PM

ZZZ,

Could you kindly clarify? It is $4,500 to be paid by the startup?

Thanks,
Lenny
----------
From: <zzz>
Date: Tue, Apr 14, 2015 at 5:13 PM

Yes Lenny.
Best,
ZZZ
----------
From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 5:20 PM
To: ZZZ

I am baffled. How could you not mention it on the first phone call? How could you not mention it in the past month? That is highly inappropriate.

Lenny
----------
From: ZZZ
Date: Tue, Apr 14, 2015 at 5:27 PM
To: Lenny Teytelman <lenny@zappylab.com>

Lenny,

It was my bad, thought I've sent, but I've rechecked the emails and I didn't.

We are not charging you any fee right now, this is only if you want to move forward to the forums.

Best,
ZZZ

----------
From: Lenny Teytelman <lenny@zappylab.com>
Date: Tue, Apr 14, 2015 at 5:29 PM
To: ZZZ

I am glad you are not charging us now. Thank you for that.
And I don't think you will be charging us in the future. We are not going to proceed.
Regards,

Lenny

----------
From: ZZZ
Date: Tue, Apr 14, 2015 at 5:33 PM
To: Lenny Teytelman <lenny@zappylab.com>

Wish you the best luck.

Best,
ZZZ