Mistrust, secret memos and board room drama — inside the chaos of a high-flying startup after a young cofounder’s sudden death

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Mistrust, secret memos and board room drama  — inside the chaos of a high-flying startup after a young cofounder’s sudden death

On a cold February morning in a quiet corner of HQ Trivia’s New York headquarters, one of the company’s young, star managers was talking softly to one of the earliest employees. The manager wanted the employee to sign a draft of a letter to the board asking that founder Rus Yusupov be removed as CEO — for the second time — and given a different role at the company.

She nodded her head. She was in.

Another employee who had complained loudly about Yusupov’s leadership was helping recruit other employees to sign the letter. In all, about half of the company’s 35 or so employees, including at least two senior leaders, agreed to sign, multiple people told Business Insider.

Business Insider talked to 12 insiders, including current employees, former employees, executives, and board members. Five came forward on their own, requesting anonymity because they were not authorized to speak to the press. Others were authorized, but requested anonymity because they spoke to Business Insider in private conversations, not monitored by the company’s public relations professionals, as companies typically require.

‘Everything that’s wrong with the tech industry today’

The star manager began drafting the letter about six weeks after 34-year-old Colin Kroll, Yusupov’s co-founder, was found dead in his New York apartment of an apparent drug overdose.

Colin Kroll
Getty/Steven Lawton

Yusupov and Kroll had famously co-founded Vine, the short-lived video app bought by Twitter for a reported $30 million before it even launched.

They built a couple of flops at Intermedia Labs before launching HQ Trivia, an interactive video game show app where users can win real cash prizes. But HQ, like Vine, became an instant phenom, with both Silicon Valley and Hollywood anointing it the big new thing. The game even spawned an HQ Trivia cheating industry.

But behind the scenes, the two founders were engaged in a struggle for power.

“When you have an instantly successful product, and you are suddenly Silicon Valley famous for the second time, and there’s a lot of money involved … The ego takes off,” one former employee who quit the company said. “These two got caught up in that in a really immature way. And they decided to take the other one down.”

HQ Trivia is the story of “all the things wrong with the tech industry today,” this person added.

Yusupov had been removed as CEO in September and the role was handed to Kroll. When he returned as CEO of Intermedia Labs after Kroll’s death just a few months later, in December, the working environment was like a powder keg, as people described it. Some were grieving the loss of Kroll, their friend and boss. Others said that while Yusupov was a brilliant designer, he was a poor CEO, prone to micro-management but also indecision.

And participation in the main HQ Trivia show had been cratering since the spring, from a peak of 2.5-million daily users at its high point in 2018 to less than 300,000 in February — a drop off that has continued to this day. (By April, a daily game attracted some 126,000, down 95% from the peak days.)

Some employees felt management had no plan to stop the bleeding. Leadership, they said, blamed the troubles on the summer season, a slow time for media (pointing out that TV shows rarely launch in the summer) and the nature of viral apps, which can crash as fast as they rise.

But many felt that the company’s own missteps, internal conflict, and Yusupov’s questionable leadership, were equally to blame.

“When Rus was reinstated as CEO, no one wanted that. He was removed by the board, he failed miserably, tanked the company from heights of 2.5 million to under 400,000 in August. He’ll blame the viral nature of things, and the summer, but he had no plans, no strategy, nothing new to add to the app,” one employee said.

Scott Rogowsky
Jamie McCarthy/Getty Images

Yusupov’s relationship with comic Scott Rogowsky, HQ Trivia’s star host, who became a cult internet figure known as “Quizdaddy,” was also toxic.

Earlier this month, Rogowsky quit the show to host a new baseball-themed show called “Change-up” for the sports-streaming service DAZN.

He tried to renegotiate his contract with HQ to continue doing the Sunday show and make some special appearances, an insider told us, but the executive leadership team fired him for breach of contract. (His contract required that he do daily shows).

Internally, executives said Rogowsky was difficult to work with, and that they had survey data from top players suggesting other hosts were just as likeable as the affable Quizdaddy.

Others said that Rogowsky wasn’t difficult. He was “miserable,” as one described. He didn’t like how Yusupov treated him or the company’s apparent trajectory. Another also said his new gig pays more.

The February meeting that blew up in everyone’s faces

When some of the letter supporters went out to dinner to discuss it, they debated whether to list their real names or go the anonymous route by signing as a “plus one.” They chose anonymity, fearing that speaking out against Yusupov would cost them their jobs.

Jeremy Liew
Michael Seto/Business Insider

The senior manager spearheading the letter opted to delay its delivery until after the February board meeting, in hopes that the board would right the ship without employees going full mutiny.

His hunch proved good. Jeremy Liew, an investor and board member, announced to employees after that month’s board meeting that Yusupov had agreed to resign as CEO — sort of.

He had agreed to a search for a replacement.

In the interim, he would remain in charge but only as part of a three-person executive team that included himself, Benjamin Sheats, the vice president of engineering and Nick Gallo, the head of production. The executives that would lead the company were informed they were part of the new three-headed leadership team after the decision had been made, one insider said.

Once the new CEO came aboard, Yusupov would become the executive chairman, with no direct reports.

Lightspeed, an early investor in HQ, also agreed to float the company with enough cash to give the new CEO 18 months of cover, Liew told employees. If HQ wasn’t in better shape by then, then maybe something was wrong, Liew half joked in the all-hands meeting.

In the end, the letter was never sent and Yusupov never saw it, insiders said. But in such a small company and with so many people involved in the letter, word of it got out.

Firings, quitting and poison

One of the executive team’s first moves was to fire three employees, including that early employee and the one helping to find more supporters to sign the letter. As some insiders said, the message appeared to be: Those who vocally opposed Yusupov were out.

“We got rid of under-performing, bad-energy employees that were not in it for the team,” one of the executives involved in that decision explained. “There’s no poison around and everyone is excited now.”

Some employees said they feared that Yusupov still hoped to be reinstated as CEO. But leaders involved in the CEO search said that won’t happen.

“The search is going quickly and well — because of innovations at the core of HQ, there are very few opportunities as exciting as this one. The search has generated a lot of interest from highly accomplished candidates,” board member Elie Seidman told Business Insider. (Seidman’s day job is CEO of Tinder.)

Tinder CEO Elie Seidman
Collison Conf/Flickr

Another reason to believe Yusupov will be out: He doesn’t control the board.

Liew, who was friends with Kroll before he invested in the company and was widely considered to have been closer with Kroll than Yusupov, still has his board seat for now. He’s expected to give it up to the new CEO. Meanwhile, Lightspeed’s Merci Grace has also joined the board, perhaps in Kroll’s seat.

Yusupov remains on the board and Seidman is serving in a second seat controlled by Yusupov, but he supports the CEO search, Seidman said. Founders Fund’s Cyan Banister left the board some time ago and her seat remains vacant.

On top of that, one board member told Business Insider that the CEO at HQ has the power to fire any worker, even a cofounder.

So Yusupov has come to terms with no longer being CEO, he told Business Insider.

Bickering and tragedy

HQ Trivia

HQ Trivia’s rise and current fall is rooted in the founders’ complicated relationship, all insiders agreed.

While Kroll and Yusupov always clashed, they also complemented each other: Kroll was the methodical technical guru and Yusupov the “whimsical and creative” wizard, one said.

This combination allowed them to come up with “brilliant” product ideas, like Vine and HQ Trivia.

As HQ rose then fell, the cofounders’ squabbles escalated. Kroll would critique some aspect of the product and Yusupov would dig in and argue about it. Yusupov would pitch an idea, and Kroll would belittle it. They argued over every topic, many insiders said. “They each thought of themselves as the genius behind the idea,” a former employee said.

When Recode published a story back in December 2017 saying the company, despite its viral growth, was having trouble raising money due to Kroll’s history from his time running Vine for Twitter, tensions between the founders grew worse, employees said. The story included allegations against Kroll of poor management and creepy behavior toward women at Vine. Kroll later publicly admitted to Axios that he had been fired from Vine for poor management and apologized for making people uncomfortable.

Some HQ employees suspected that the relationship between Kroll and Yusupov had become so toxic that Yusupov was somehow involved in Recode learning about Kroll’s problems at Vine.

Those close to both men tell Business Insider that Yusupov wasn’t leaking to Recode. But that’s the level of distrust by some HQ employees for Yusupov.

A few months after the Recode article, HQ raised $15 million from a top VC, Founders Fund, at a whopping $100 million valuation (total raised nearly $24 million).

From confidant to HR complaint

In June 2018, HQ began experimenting with ad revenue, just as Facebook launched its interactive video features with three partners. The new shows included Confetti, a Facebook Watch trivia game for cash prizes from Insider, Business Insider’s parent company.

For the first time, HQ Trivia faced competition, and not just from anyone, but from Facebook. Facebook CEO Mark Zuckerberg had famously blocked Vine from accessing Facebook after Twitter bought it. Twitter shuttered Vine 2016.

Insider’s Confetti on Facebook Watch
Confetti

At HQ, Kroll and Yusupov began burning money on experimental projects, several employees said. These included launching and quickly killing several international shows, offering huge jackpots— neither of which helped with growth — and booking more celebrities on shows.

By July 2018, HQ’s daily player count had dwindled by hundreds of thousands. Kroll was showing up for work late and disheveled, one employee said.

He began sending messages confiding his worries to at least one employee, multiple people who knew about the messages said. These included “weird” messages, sent at odd hours, saying angry things about Zuckerberg.

The employee told Yusupov about the weird messages. Kroll was in a dark place, maybe even using drugs, the confidant said. Yusupov insisted she report this to human resources, legal, and the board.

What he didn’t mention: Around that time, with HQ’s numbers crashing and cash getting burned on failed experiments, the board was considering canning him as CEO in favor of Kroll.

After the woman filed her reports as her CEO asked her to, the company hired an investigator to look into the matter. But when the confidant spoke to the board, some members seemed skeptical. “Did someone put you up to this?” at least one of them asked her, a person familiar with the situation told us. The implication: She was conspiring with Yusupov to keep Kroll from being named CEO.

Hours in a windowless room

By September, the investigation into Kroll had ended but his tensions with Yusupov had escalated. The two were often seen arguing in conference rooms.

Rus Yusupov
Getty/Jeff Bottari

“Colin was extremely stressed. I can vouch for that,” another former employee told us.

That month, Liew, Kroll, and Yusupov locked themselves into a windowless conference room for hours in heated battle, insiders said. They were discussing removing Yusupov as CEO. Banister had bowed out of the meeting and the board, reportedly because Founders Fund prides itself on never removing founder CEOs.

Ultimately, they stripped Yusupov of his CEO title and awarded it to Kroll; Yusupov himself eventually agreed to the plan.

Intermedia Labs

Immediately after the meeting, Kroll called for an all-hands meeting to announce his new role to employees. The three leaders explained that the company wanted to maximize its “technical resources,” so it was time to put Kroll, the technical expert, in charge.

One employee called the whole episode — from the changing of CEO roles to the way employees were told — “amateur hour.”

While some were encouraged by Yusupov’s ouster, they would have preferred a more seasoned successor, rather than the “lesser of two evils,” as one described.

“I don’t think Colin was evil, but he was not meant to be CEO,” this employee said.

Another explained it this way: “Tech guys have a good idea and they become CEO? Who thinks that’s a good idea? They didn’t go to business school. They have no experience of managing people and all of sudden they are running a company of 30, 50, 100 people?”

Installed as CEO, Kroll moved quickly, implementing initiatives that had stalled during the months of turmoil and winning over employees in the process. The weird messages to the confidant stopped and his working relationship with her improved, people said.

In September, Kroll even took a victory lap in the press, telling Digiday about his role as CEO, and that the company had brought in $10 million of revenue thanks to HQ Trivia’s sponsored games, in-app purchases, and merchandise. (Executives told Business Insider that by year’s end, revenue was closer to $15 million.) Kroll said the game was experiencing fewer glitches and had instituted a ban on cheating apps.

Then another bomb exploded.

In November, Recode reported on the September boardroom battle and the HR complaint against Kroll. Employees who read the story soon figured out the woman’s identity, multiple insiders said. Several people close to Kroll suspected Yusupov of leaking it as an attempt to get himself reinstated as CEO. (Again: Those close to him deny that.)

Gabe Ginsberg/Getty Images for Variety

Kroll feared the allegation that he was a bad boss, particularly toward women, “would be the thing that haunted him forever,” one employee remembered him saying.

Another lamented that Kroll was the subject of several negative news stories about his history “that really hurt him,” adding that he was “a nice guy and didn’t deserve any of that. I personally believe that Rus was the one who was sabotaging his so-called partner.”

In December, Kroll’s confidant quit HQ. She felt like she had become a pawn between the two founders and had now grown suspicious of Yusupov, those close to her said.

A few days later, Kroll was found dead. And Yusupov was immediately back as CEO.

Games and numbers

These days, the employees at Intermedia Labs that have stayed put through all the drama are optimistic about the future.

Even though their player numbers are a fraction of those of a year ago, their games can still bring in as many as 500,000 people a day, executives told us.

“HQ has had dramatic growth that is the envy of 99.9% of startups,” Seidman tells us. “Despite concurrent users being off their peak, the numbers remain the envy of 99.9% of startups. It’s an early-stage startup and the team is hard at work on the next act.”

HQ Trivia is entertaining a fraction of the number of concurrent players at the start of every game from its heyday of hosting millions, as this number in the corner shows.
An April game of HQ Trivia shows a fraction of the number of people playing compared to a year earlier.

But employees also said that leadership changed how they showed the number of concurrent players.

They now count everyone who enters the game, even if they leave immediately without playing. That number doesn’t update to show the actual number of people logged in until after the first question, when people have always left the game, several people confirmed.

Meanwhile, the company is working on life beyond trivia games, such as using its interactive video tech for live comedy and dating shows, one insider said.

The right CEO could revive the company, even Yusupov admits.

“As a co-founder and the single-largest individual shareholder of this company, nobody wants this company to be great more than me,” he said.

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