Jan 23
Flickto’s Downfall — A Timeline and Analysis of Events
By Shelby Roth, Twitter:@drama_of_dalama, Discord Yoda1313#0993
Not every project with good intentions will be a success. There are times in the eco system that prove not favorable to certain projects. This can be lack of funds, too large of goals, low community support, or a market downturn. Also, unfortunately some projects are built to appear as something that could be the next break out project but is a scam. An old but excellent phrase is we learn from the past to prevent mistakes in the future. This document is meant to look back at several projects on Cardano and examine what went wrong. This is meant to be a tool used to help the people of Cardano make sound choices in what projects to support.
Flickto
Founded: November 1st, 2021
Total Raised: 2–3 million US dollars.
Project Founder: Rob Knight & Theo Bailey
Type of Failure: Mismanaged/Market downturn
Terminated: May 19th, 2022
The Project
Flickto was to fund different forms of media on the Cardano block chain. Using the token FLICK the holders would be able to vote on which projects would get funded. The members holding the token would get a percentage of the revenue the funded projects earned. Flickto planned on raising funds through an ISPO. The pool had a 99% margin so all the ADA rewards went to the project which would then reward the participants in the pool with FLICK. They encouraged long term staking in their pool by increasing the rewards over time. If you staked your ADA you could be rewarded with up to a twenty percent bonus if you stay staked for a certain amount of time.
Of the five billion tokens sixty percent were to be given as public distribution. They held several different types of funding rounds for investors that were all deemed a success. On the site Kick.io alone they sold over seventy million tokens. They were also able to accumulate over 1.5 million ADA staked in their pool one month after launch. This was a little over two million US dollars at that time. This grew to around five million ADA tokens in January 2022. In total the team was able to raise a little over two million US dollars over the few months the project was active.
The project was met with great enthusiasm. The founders had been doxed and regularly engaged with the community. The leadership was comprised of a wide array of backgrounds
which suggested it had the skills to accomplish the project’s goals. The team mentioned some of the members’ backgrounds where CTO of a large open-source software company, film producer, and media support companies.
All details in the timeline came from interviews with Flickto employees/associates and documentation provided by them.
Timeline of Events.
April 2021:
Rob and Theo meet in a discord channel talking about running staking pools. Theo pitched the Idea of building short films to Rob. At this time Theo talked about having connections in the film industry and mentioned he had worked on several different films. The idea was Rob would use his skill sets to build the project and Theo would run the media side.
October 2021:
The team knew the MELD ISPO was ending and wanted to capitalize on the pool of investors that would be looking for a new project. They did a privet sale in mid-October and raised around 60k US dollars. The project received a lot of positive responses from everyone they talked to. Also, the funds coming in were easily covering all expenses currently. All the members at this time felt the project was on track.
November 2021:
Rob was introduced to Kam. Around this time Rob learned that Theo was a security contractor for films not a producer. This made Rob upset, but he thought the project could still work. They did hold another sale of tokens and made between 30k-40k US dollars. The project was gaining traction and needed more people on board. Sid was hired as a contractor and not a true employee due to his criminal history. Sid would take the role as a project manager. Late November the team held a video chat and Kam announced himself as a co-founder which surprised Rob. The funding outlook at this time was not as good as the team thought so they reached out to some venture cabalist fun. This did not go well, and the blame was put on Theo for not being able to give quality answers to the investors.
December 2021:
Kick approached the team to set up an IDO. The team felt this was a good idea since their ISPO was not growing at a rate to match expenses. There was only 3–4 million ADA staked at this time. The project was gaining a lot of attention and the team started to grow. This is when differences in opinions and ideology started to present themselves. The decision was to hire out to help the media side. This was due to several individuals feeling it was stagnating and needed help growing to meet goals. Sobanan and Pratik were hired to build business development. With Sid’s connections they were able to bring in some India workers to help build the media side. With the new hires some members on the media side disagreed with the decision and felt Rob mistreated the new employees by paying them lower wages and talking down to them. This is also when people noticed the tension between Rob and Theo.
They were told Theo was the CEO but felt Rob wanted more credit. At the end of the month Sid raised concerns with the founders about the finical situation the project was in.
January 2022:
The ISPO remastered had been launched and the finances appeared to be more on track. The team tried to list a trading pair on Adax. This did not work since the team did not have enough required cash to set up the trading pair. As the team grew the decision was made to move the main office to an Airbnb. The old office space was deemed not suitable since it was a building several groups used and shared. This cut down on space and privacy. The Airbnb was not located in the city and the team was split on the decision. Half felt it was needed, the other half felt that it was too expensive. The team paid for a one-year lease up front which was a large amount of money. Berkay joined the group as a marketing analyst and community manager. With so many new people joining Flickto they were given new laptops, phones and equipment for office work. All the office equipment had to be bought new since most employees had little to no equipment fit for building the project. The finances were still solely under Rob’s control up to this point. The reason for this is not very clear. The first reason given for this is several senior members knew very little of how crypto worked so Rob had to control the funding. The second reason given was view was Rob wanted control over the project, so he kept the finances under his control. This period saw a large spending spree start due to all the equipment bought for the new employees and the accommodation made for them. It was mentioned that it seemed like several employees were hired just because they were friends of people already in the project, and that several people were not qualified to work on the project. At the end of the month Rob had a planned vacation and left Theo in charge. During this month some time the project started funding or planning the first film called Primal. The plan for it was not clear and it was never completed.
February 2022:
Views and opinions of the team started to vary by a large margin and details become very murky. Rob was still on vacation at the beginning of the month, but he was getting messages about Theo being aggressive at work and threating employees. Rob also finally learned about Theos extensive background of failed start-ups. When Rob returned mid-February, he, Kam, Sid, Pratik, and Sobanan voted to fire Theo due to all the hostilities and threats he brought to the work area. It was reported Kam was also gone a lot and not really focused on work. By the end of the month the leadership team got reorganized to help get the project on task. This is when Liam was brought on as a contractor to help get the team on track. The senior members now consisted of Rob, Sobanan, Pratik, Kam, Liam, and Sid. When a partner of Flickto, Bazooka Bunny, reached out to the team about the weaking financial situation some of the leadership team talked about corrective action. A few ideas were brought up about changing the direction of the project and rebranding it to Demi to help it produce more income but all of them either failed or were turned down by the leadership team. Some of the ideas were media consulting and various forms of media outlets in crypto not just films. The work cohesiveness was very weak at this point. The accountability of the people on the project was low as well. Just under 78k had been spent by this time on office equipment and phones.
March 2022:
This month saw a downturn in the staking pools. Along with the price of Ada decreasing this meant the team had less income to work with. At this point the finances were on a month-to-month basis. Some members expressed that they were not aware of how bad the finances were at this point. It is unclear if it was common knowledge on how tight the budget was outside of a few leadership team members. Rob had strong doubts the project would be able to continue much longer so he started reaching out to liquidation businesses to see what his options were for the project. On top of this the owners of the house that was rented out for the team brought several complaints to Rob about how the team were conducting themselves. The owners were concerned about drug use and the state of the property. Some of the ambassador’s wallets started to sell off tokens at the end of the month. The ones selling felt that the project was failing.
April 2022:
A lot happened this month and just like the previous two months very few statements line up. Start of the month Rob asked Berkay to move to the main office which was the Airbnb. Up to this point he had been working from home and coming into the office occasionally for meetings. Some of the members stated that this made them feel that the project was going strong since they were able to afford another member at the Airbnb. Sobanan was fired on the 8th. The official reason given was due to his hostile nature towards Liam and complaints from the landlord where Flickto was located. Several employees felt the firing was unjust and around ten threatened to leave unless changes were made. Some members thought that Rob had been acting immature in the office and outside of work. This added with the firing of Sobanan pushed some to make the decision to quit. Due to the stress of everything Rob stepped down and Kam became the new CEO. Theo at this time reached out to Rob for the first time since his termination wanting the 200 million tokens he was owed. Rob transacted the tokens after informing and getting the go ahead from leadership team. In the contract for Theo’s termination, he was owed these tokens in payments over ten months not all at once. Shortly after getting his tokens Theo made several transactions over a few days, crashing the price. After this transfer happened several members felt that the transfer was illegal and wanted Kam to step down. They said they had info that showed Kam had violated his parole and would report him to the police if he didn’t step down. Liam then took the CEO role when Kam stepped down. The details of the change in leadership are unclear since the team was heavily divided. Some members felt that this transfer of power was somewhat hostile with the new group trying to blackmail their way in. Others said it was a joint decision by both sides and the proof of this is Rob and Kam stayed with the project. To mitigate between the two sides the ambassadors were brought in to assist in deciding on how the transfer of the leadership team would go down. The new team consisted of Berkay, Sobana, Pratik. They allowed Kam and Rob to stay working in reduced roles. After the new group took over Liam stepped down from CEO and left the project. He realized how bad of a state the project was in and did not want to be a part of it.
May 2022:
Rob released the finances to the new leadership team, and they realized how bad the situation is. Some of the large bills are listed next. On top of the nearly 78k spent on office equipment in Jan-Feb alone 76k was spent on property. 129k was spent on business expenses such as payroll, subscriptions such as QuickBooks, cloud storage, and licenses to run the project. Around 500k was spent on media related items and travel. There were also several random accounts that only had about 1k-2k on them for random items. In all the expenses listed totaled just under 1.8 million. The new leadership team decided on May 6th to vote insolvently with 100% voting for. On the 16th all staff were let go and the public announcement was posted on the 19th. The team deleted all social media and filed for bankruptcy shortly after.
Lessons Learned
One of the biggest recurring statements made was that more due diligence should have been done on vetting the team. It seems like several people let their guard down based on several reasons. The team was self doxxed and very open to the community when it came to talking. They were easy to approach and appeared to be very optimistic and enthusiastic about what they were doing. The tokenomics where very reasonable. They were giving sixty percent of the voting power to the community and the price of the token was sold at a reasonable rate during the IDO. For some a project with this kind of backing and with so many big names talking about it, they did not question what was going on in the background.
The team needs to have some strong leadership in the crypto world backed by clearly defined roles. This means either the person in charge needs to have worked on projects in crypto before, or they bring on board people who have the knowledge to advise them properly. As stated above the team had/claimed to be skilled in the roles they played in the company. In reality several members were not suited for their roles. In crypto it’s not uncommon to see younger team members in a leadership role on a project. However, several times it was pointed out to me that the bulk of the members had not had any previous formal jobs and were in their early 20’s.
It is never a bad thing to double check the finances of a project. The best phrase for this is trust but verify. It is never bad to question and expect clear answers in crypto. Keeping an eye on devs/ambassador wallets never hurts. You want to make sure that not a single person controls all the funds. Flickto did not have a multisig wallet set up. This could be a lack of understanding in the eco system or purposely done for control. This concern was not really brought up in the community since everyone assumed it was either in place or figured the team was a safe bet and did not ask. This goes back to doing proper DYOR.
Final Thoughts
This is an impression I got from interviews, articles, and legal documents I was privy to. This is strictly my opinion.
I don’t know where to start on my comments due to how conflicting all the stories I got where. It is not so much the legal side, but everything that happened in the workplace and what was said to everyone working there that is a mystery. I feel kind of sad for the entire group and the important people in their lives. The amount of stress this project brought is crazy. I am sure it spilled over into their personal lives. One individual I reached out for comment declined stating “I will respectfully pass on giving any of my opinions. I don’t wish to spend any more time, or energy reliving the flickto experience.” I started this report knowing little to nothing about the project. I did not know what I was getting into. There were times I had twenty or more tabs open on my desktop, a laptop with notes, and pages of written notes and quotes scattered on my desk. All of this was just to build the timeline of events. The amount of convolution this report brought due to all the stories and documents I was shown was heavy. Did I get all the events correct? No, I don’t think so, but I feel it is the best timeline we will get.
I honestly believe that there were team members who acted in good faith and wanted to build a strong project. I also feel that there were people who thought it would be an easy way to make money. I don’t blame one or two people for the project downturn. I feel they all are responsible in some way either through bad management, rude conduct in the office, or not having the maturity level to create a successful project. The hostility the team had to each other is unreal. I don’t fully understand where all the hostilities came from. Some came from greed, and some came from egos but that doesn’t cover it all. The best way to describe the feelings a lot of the team have for each other is pure hate. I thought at the start I would find something that would make all the events clear, and I would be able to give irrefutable evidence of the smoking gun per say of what brought down Flickto. I feel that it was several bad decisions, not a clear direction to build to, mismanagement, and market downturn that caused Flickto to fail. So, it was a little bit of everything adding up that took down Flickto. I am now convinced the only ones who will truly know what went down at Flickto is the employees. There are events that happened in the office where no interviewee and no article written gave the same story.
Having looked at the spending reports, wallet IDs on Cardano scan, and the bankruptcy report, and talking to members of Flickto no one came out way ahead. Even certain employees who did the best finically ended up having legal issues they had to spend money on.
Work Cited and Prominent Team Members
https://medium.com/@ADA_Tamil/please-read-this-blog-article-for-the-latest-flickto-update-1468b7a647cd https://medium.com/@ADA_Tamil/memorandum-thursday-19th-may-2022-53478e7b748e https://medium.com/coinmonks/why-did-flickto-fail-cardanos-first-deme-project-f03d63f54528 https://u.today/cardano-based-flickto-shares-the-details-of-its-ido-on-kickio https://www.youtube.com/watch?v=qqa9Vq-8y5Q
Team:
Rob Knight: Co-founder/CTO/CEO
Theo Bailey: Co-founder/Media/CEO Was removed in feb 22
Sobanan : Senior management
Pratik: Senior management
Berkay: Community Manager/ finances after April.
(Tajah) Kam Stevens: Co-founder, worked on media relations. Promoted to CEO in the end for a short time.
(Sid) Sudhir Singh: Senior management. Convicted of scams in the past, possibly tried to get money from the team. Due to criminal past Rob hired him as a contractor for legal reasons.
Liam: Brought on by Rob in March. Was hired as a contract person to help increase productivity of the project. Made CEO in April.
Laquarn Bishiop: Marketing Analyst.
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Disclaimer
- The information in this article is produced for educational and informational purposes only and is not intended to be used as a financial promotion. No information, data, or analysis presented are intended to form the basis of any investment decision. This is not investment advice, solicitation of any kind nor an endorsement. Nothing in this document should be construed as an offer or inducement to engage in any form of investing activity.
