Rough Waters Ahead for Boatbound - A Customer Primer in Avoiding Startup Lies

Maybe you're an enterprise manager looking to pilot a new type of software. Maybe you're a consumer hoping to find a new hobby or weekend activity. In both cases, you take to the web to track down just what you're looking for. Soon, you find the website of a new startup that's promising exactly what you need. But potential buyer of startup products are services beware:

Startups lie.

Startups tell half-truths.

Startups will do a lot for just a little publicity.

This isn't across the board, of course. Most startups are quite ethical and operate within the established norms of business. But when working with a startup, you should conduct additional due-diligence to ensure that what you're licensing or purchasing is everything that has been promised. Why? Because startups are hungry for press and new customers, both of which fuel the much-needed cycle of hype-customer acquisition-funding (repeat). Couple those needs with a young, unseasoned executive team and you have a recipe for a hot plate of spin. I work with large enterprises who routinely evaluate startup vendors and their products for potential enterprise use. Therefore, I watch news about new technology with interest - and I'm quick to dig in deep.

Boatbound BS

This post was inspired by last week's shameful PR stunt by boat-sharing startup Boatbound (I'm not going to link to them because, well, that's what they want). On Friday, Boatbound issued a press release claiming that the company had licensed the naming rights to San Francisco's beloved McCovey Cove.

McCovey Cove's new name, Boatbound claimed, would be #Boatboundbay, and the announcement coincided with the Friday return home of the Giants for the 3rd game of the World Series against the Royals. Within minutes, Twitter was abuzz of this news (people were not happy). Even NBC picked up the story, which was originally located here, but the article has since been removed (screenshot of the original article below).

The original story on NBC. Who was in charge of fact-checking that day?

But while many people were Panik-ing (see what I did there?), as a former startup PR/marketing/sales exec and a former MLB-team sponsorship manager, I thought that this reeked of a poorly executed publicity stunt. Tipped off to the story by Beyond Pricing co-founder Ian McHenry, it was easy to see that a lot of pieces of this "announcement" didn't add up. In fact, it was so ill-conceived that it may create tremendous liability for Boatbound, not to mention the destruction of any local goodwill toward the company. The dozen Boatbound investors like Ben Ling of Khosla Ventures or Dave McClure of 500 Startups should be livid.

The Telltale Signs of Bad Startup PR and Marketing

Here were the tip-offs that the Boatbound fiasco was, well, just a fiasco and nothing more:

  1. The announcement was issued by Boatbound. If the City of San Francisco (or the SF Giants or the Port of San Francisco) had struck a licensing deal with a startup, the release would have been issued by the bigger, more important entity. When you're a startup, you defer to the big kids in major deals like this because they actually know how to do PR.
  2. The only quote was from the Boatbound CEO. In Startupland, you always want a corroborating quote from a customer, an analyst, or SOMEONE who can add value and credibility to your release. The lack of a quote from any official San Francisco entity made this release suspicious from the start.
  3. Who issues a press release on a Friday? Nobody.
  4. Boatbound used PRLog, a free press release distribution service. If you really want press, and you want your release to get into the hands of the right media, you pay the nominal fee for a real wire service like PRNewswire
  5. The term #Boatbound Bay was a clear ploy to influence Twitter's Trending Topics. Boatbound said that McCovey Cove was to be named #BoatboundBay - hashtag and all. Attempting to generate a flurry of tweets with a specific hashtag was clever in 2012, but today, it's really nothing more than a telltale signal of desperate marketing.

The Most Important Sign: Crossing the Line with Major League Baseball

Indicator Number 6 that Boatbound's announcement was nothing more than a scheme is actually the most important and damaging one: Boatbound utilized Major Leage Baseball's trademarks commercially without paying a sponsorship fee. This was a juvenile and naive mistake that could cost Boatbound a lot of money if MLB decides to pursue a trademark infringement case.

Trademark information as displayed on http://mlb.mlb.com/mlb/official_info/about_mlb_com/legal_notices.jsp

Back when I managed the corporate sponsorships for the Los Angeles Angels in the early 2000s, I learned that a company couldn't so much as whisper the term "World Series" without paying for the rights to do so. Major League Baseball tightly holds the reigns on any commercial use of their trademarks, and for good reason. Baseball is America's game. Sponsorship rights come at a premium price and are offered to long-term, loyal and well-paying corporate sponsors - not startups who lack relationships with MLB.

When Boatbound threw the term "World Series" into the headline of their press release, they inadvertently set sail with their tiny pontoon into choppy, stormy seas where a military-grade warship is now looking to hunt them down. This is one ocean cruise that I'm glad I'm not on.

Lessons Learned

Consumers - now that we've dissected Boatbound's PR disaster, you should be armed with the skills to pull apart a startup's pitch and announcements for yourself. If something doesn't seem right, it probably isn't. Purchasing something from a startup can be a fantastic experience, but before you buy, dig a little deeper than you would with a larger company. You must trust the company from whom you're buying. In the case of a startup like Boatbound, you really can vote with your feet. Or in this case, your paddle.