Amid Drama, Blognation Is Kaput

In short, it’s a total mess.

Sam Sethi, CEO and founder of Blognation blames TechCrunch’s Michael Arrington. Arrington, and lots of other people, blame Sam Sethi.

Bad Blood

Sethi worked for Arrington as editor of TechCrunch UK until December of last year. Sethi left TechCrunch on bad terms after he posted a negative review of LeWeb, a French conference. Arrington denies he fired Sethi, but had asked him to delete the review because of a conflict of interest involving a competing TechCrunch conference.

The founding of Blognation was to follow, and so was more bad blood between Sethi and Lee Wilkins, whom many credit with developing the idea for the company. Arrington says Sethi "booted" Wilkins, who lives in Romania, from the project, and that at one point the conversations got so heated between them that Sethi threatened to fly to Romania to "rip [Wilkins'] head off."

Wilkins went on to set up a similar blog network called MyKinda, which launched last month.

Show Me the Money

Earlier this month, Blognation editor Oliver Starr dropped a bombshell full of dirty laundry about his experience with Sethi and Blognation. In a post published both on his personal blog, and at the Blognation site (subsequently deleted), entitled "An Open Letter to Sam Sethi," Starr reports that he and other Blognation writers had not been paid since launch.

Also in the post, which spans 3,000 words and gets more emotional as it goes, Starr alleges Sethi repeatedly lied about forthcoming payment as well as venture capitalist funding. Starr describes Sethi’s behavior as fraudulent, criminal, and even psychotic.

"You made promises that people took to the bank and then you defaulted on them leaving everyone that trusted you to face the consequences," writes Starr. "I am not kidding when I say that there are people on Blognation that probably won’t have a Christmas thanks to believing in you.

"There are people that are going to be late on car payments and there are people that are going to have to think twice before they go to the dentist because they are out some $10, $20 or even $30,000 dollars of income that they were expecting, for which they HAVE A CONTRACT and for which you have an obligation because you told us that you had the money when in fact you never really did!"

A Blognation Editor Dies

Sethi responded in the comments section of a TechCrunch article that Starr had been asked to leave Blognation in November, implying the post was in response to that. Sethi also stated that a round of funding was about to be closed and that everyone would be paid:

"Marc Ochant [sic] and I spoke on Sunday when he blogged about Facebook. Marc along with the other editors are aware of the situation regarding the delays we have had in funding as they are in direct contact with the VC on our “private” backchannel.

"Just for the record EVERY editor has a contract and will be paid in full prior to Christmas."

That post was made on the morning of December 5th. Marc Orchant, whom Sethi says he spoke with Sunday, had a massive heart attack that same morning, and was reportedly unconscious through at least the 5th. Orchant died December 9th.

Though he’d be hard pressed to prove a correlation, Arrington suggests the stresses of nonpayment contributed to Orchant’s heart attack.

Sabotage or Royal Screwup?

Yesterday, Sethi announced that Blognation was kaput and that he would put the network up for auction, but not before accusing Arrington of sabotaging the company for fear of competition. Sethi blames Arrington for scaring off investors by publishing confidential emails and a "leaked" terms sheet from British investment firm Secora three days before signing.

While Sethi admits in the post that he’d lied to Blognation editors, he claims he was forced to because of Arrington’s FUD campaign to keep him from securing funding. The leaked terms sheet, he says, came from his email account and that Scotland Yard would be investigating who accessed it.

At this point, though, it’s rather difficult (nigh impossible) to determine what’s true and what isn’t from Sam Sethi. The Mobile Jones blog, which reported the Blognation shut-down a day before Sethi posted it on his blog, also reported on December 9th, that Sethi had apologized to Oliver Starr, admitted that he hadn’t fired Starr, and that he impersonated one of his blog editors to leave a comment on TechCrunch.

At stake here now would be sheer credibility, and at this point, Sethi’s credit has run out.

But why is this social network gaining millions of users when Facebook, MySpace, LinkedIn, etc are out there already and are very entrenched?

Because they focused on a smaller niche. Their social network is ONLY for mobile phones.

I love this company and its service.

Want to get up to date on the mobile industry and hear all about BluePulse? You know what to do.

Venture Wire has the facts on BluePulse’s announcement. Blognation has other details.

Oh, and BluePulse is yet another best-of-breed companies that came from Australia. What are they putting in the water there?

Oh #2: this video, with CEO Ben Keighran, was filmed in YouTube’s original offices. Is this going to turn out to be a “lucky office?” We’ll see.

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Irish Pix.ie Excels At Photo Sharing

In his review of the site, Conor O’Neill of blognation Ireland added, “They have the usual tag exploration and social networking features which are must-haves on such a site.  I found that aspect to be a lot easier to work with than Flickr.”

O’Neill also wrote, “One differentiator that they push is the fine grained access control.  Flickr’s awful binary approach to sharing has always been my biggest complaint about the site.  Pix.ie allows you to define access based on various degrees of contact relationships and groupings.”

It’s tempting, at this point, to dive into clichés about the luck of the Irish; other overviews tend to agree with O’Neill’s, and all in all, Pix.ie really does look quite good.  That would be rather bad writing, though, and offer an incomplete viewpoint, since there are some issues with the Irish site.

Founder Marcus Mac Innes showed up in blognation Ireland’s comment section to admit, “[O]n the invite and ‘guest pass’ front we are definitely falling short.”  The editor in me is also a bit annoyed by an inconsistent capitalization of the “P” in Pix.ie.  Failing to hit the “Shift” key isn’t much of a sin, however, and Mac Innes continued, “We’ve got changes planned to allow users to be able to invite people to view their albums directly and we’ll throw in the old ‘guest pass’ for good measure!”

Hat tip to Mashable’s Kristen Nicole.