CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges
Being an executive at a (substantially smaller) SaaS startup I have no idea how having up to 90% of your revenue be fabricated could happen without others knowing:- where are the contracts corresponding to revenue? Yeah they are SaaS focused on SMB but this is a financial product, there will be contracts, NDAs, etc- if the majority of the customers are fake there is such little load on the system. How does engineering not figure that out?- How does no one see an insanely low COGs when paying the cloud services bills, or the lack of allocated resources when looking in the management interfaces?- Even saas Products with supposedly a no touch sales process still have sales people and sales engineers for key accounts. What are all the sales people doing if they’re not running trials?- let’s say he hid all of this by having tens of thousands of $10 a month customers. How does your VP of sales not get totally freaked out that the overwhelming majority of revenue is coming from no touch sales? If that’s the case that radically changes your growth and go to market strategies. The entire go-to- market team should be wondering what is going on? Same with product management. Your roadmap would be completely different with a long tail of extremely low revenue customers.- how does sales/client success not notice that no one is expanding? How they aren’t talking to small customers about expansions?- How does no one notice a complete lack of analytics or actions being generated by all the supposed customers?- product management is going to want to get feedback from all of these customers. They’re going to be looking in analytics tools or session replay tools like fullstory. They’re going to look at the accounts and users and do outreach to emails asking for meetings. Aren’t they going to notice all of those people are fake?- support/client success is going to have insanely high customer to support person ratios. Where are all the support tickets for that many customers?- Managing cash flow would be very hard. Finance is going to see all this revenue coming in and want to scale. The VCs are going to want to see money being spent on marketing activities etc. to further the growth. If there’s no corresponding revenue being spent to acquire customers but tons of revenue coming in that’s a giant red flag