Just recently, Karl Loo, the CEO and co-founder of local services marketplace app, ServisHero was caught in controversy when a 3-part article surfaced on online publishing platform, Medium.
The article in question (which has been taken down by Medium for rules violation as the author had impersonated a former employee) accused Karl of misusing company funds and named him as a “fraudulent” founder.
Editor’s Note: The previous paragraph has been amended to more accurately reflect the circumstances.
However, Karl himself has since come out and mentioned that he personally knew who was the person behind the said article and had requested for it to be removed.
He has also posted on social media addressing some of the accusations, which you can read here.
For a few days, we saw that article (and Karl’s reply) shared on social media with quite a lot of speculation and discussion about the situation.
We did reach out to Karl to get more information, but he declined to comment because of ongoing legal proceedings against the alleged defamer.
In an age where information (and misinformation) can spread like wildfire thanks to social media, we wondered if other Malaysian startup founders had ever taken such situations into consideration, and if they had any action plans to address the problem, if it ever came up.
Stanley Chee, CEO and Co-Founder of SalesCandy
SalesCandy is a Lead Management System that guarantees to improve sales close rate by 15% or more within 60 days.
Stanley mentioned that currently they don’t have a crisis management plan at hand.
However if a similar situation happens today, he would firstly contact his lawyer and restrain himself from posting anything about the particular situation.
If it’s a defamation case, he would get his lawyer to structure a letter so that he can get the said article taken down from all relevant parties, and if he can find who is behind it, he would issue a cease and desist letter.
“I think if it can be removed, most likely I’ll not go too far, but I will still follow up with an official letter to all my stakeholders—investors, shareholders, clients, and vendors explaining what has happened,” he shared.
He mentioned that taking legal action will be the last resort as it involves money and hiring a lawyer isn’t cheap.
To avoid a “disgruntled ex-employee with a grudge” scenario, Stanley said that he tries his best to always separate with employees on good terms.
“Usually for employees we have a common understanding. If there’s a better offer somewhere they would actually talk to me first,” he said.
“If they leave, they leave with blessings from me as there’s a much better opportunity that I can never match.”
Nick Liew, CEO and Co-Founder of MyPay
MyPay is a government services consolidator platform.
To Nick, external crisis communications is more important as they deal more with external parties. He added that he also pays attention to internal crisis communications.
If a similar situation were to happen to him or the business, they actually have a plan to execute and will have a PR team ready to provide their expert views on how to deal with it.
“From my understanding of these kinds of situation, first you have to solve the external problem of the image, so you put out a statement that these allegations are not true and there’s no such thing, and if necessary we will conduct internal investigations,” he said.
After that he would rather let the matter die down, because he feels that the more they shout about it, the more fuel is added to the fire.
He also added he wouldn’t want to take any legal action as it involves money and would rather let the matter die down.
He advised other startup founders or business owners to spend a bit of money to talk to a PR professional to get a crisis playbook.
“Because this kinds of situations are emotionally charged, so if you’re not using a professional to advice you, you might end up threatening the guy back,” he said.
It’s especially important in their business to have a crisis playbook as they’re dealing with the government and there are a lot of stakeholders involved.
“It’s less like running a restaurant, where if there’s a bar fight, nobody will report. But if your product is newsworthy, you need a PR plan in place,” he said.
Paul Chan, Founder of CRAFT La
CRAFT La is an e-commerce startup for arts and crafts.
Paul’s first reaction would be to report to investors as they’re the ones who funded them.
“Be more transparent and show the financial reports, this is the main structure of doing a startup,” he said.
He also said that if it was too serious, he would rather stay quiet and maybe even start reflecting whether what he did was right or wrong.
“I would just remain quiet because if you post something out and answer back the question, the problem will become bigger and bigger—in the end it won’t stop and become more serious,” he said.
As for legal action, he thinks it isn’t necessary unless the said news affects the company’s shareholding, revenue, customer trust or branding.
That would be the worse case scenario but he will always try to solve it in a peaceful way.
From the answers, it’s pretty clear that although having a legal advisor on hand can be helpful, the founders we talked to see legal action as a last resort due to the financial burden involved.
It was also interesting to see the choices that they’d make in such situations—whether it is releasing a statement to prove their innocence, or remaining quiet to let the issue dies down.
You can read our previous piece where we talked to Malaysian founders about whether their take on whether personal assistants were a luxury or a necessity here.
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Feature Image Credit: SalesCandy, CRAFT La, MyPay