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Summary:

Back in 2006, when Wi-Fi was all the rage, we saw many startups paint a future in which we’d be able to hop from one hot spot to another seamlessly, sharing the bandwidth for free when we could and buying it when we had to. Well, […]

Back in 2006, when Wi-Fi was all the rage, we saw many startups paint a future in which we’d be able to hop from one hot spot to another seamlessly, sharing the bandwidth for free when we could and buying it when we had to. Well, the future turned out to be entirely different.

Whisher, a Wi-Fi company that launched with much fanfare at DEMO in January 2007, sold itself to WiFi.com, a hot-spot services company, sometime earlier this year, according to founder and Chief Technology Officer Mike Puchol. The sale came close on the heels of the firing of CEO Ferran Moreno in October 2008. Now while for most companies, such a sale would signal the end of the story, with Whisher it was the start of a new one. As part of its preparation to merge operations with WiFi.com, Whisher launched an internal audit that turned up certain irregularities, which in turn led to a full-blown investigative audit. What it discovered wasn’t good. From a company statement sent to us by Puchol:

“Whisher announces that after a thorough investigation, on April 23rd 2009, it filed a criminal lawsuit against its founder and former CEO Ferran Moreno Blanca, for the alleged offenses of embezzlement, disloyal administration, and falseness in mercantile documents. The lawsuit is also filed against Jesús Roy Solanas for his alleged intervention in the offenses. Whisher confirms that no other party connected with the company was involved in the case, and that the lawsuit has been accepted by the Spanish courts in Barcelona. Ferran Moreno will declare before the courts as defendant on July 1st.”

Wow, what an interesting turn of events for Ferran, who got into an argument with Martin Varsavsky, founder of FON and his former boss, around the time Whisher was launched. Ferran, who was a longtime employee of the Swiss phone company, Swisscom, had championed the idea to his employers, who ended up seed funding the project. But somewhere along the line things got murky, and fake invoices were submitted, first to Swisscom and then to Whisher, Puchol alleges in his email.

I bet we haven’t heard the last of this saga.

  1. [...] Om Malik just posted on the issue. The post includes the standard press release that was prepared by the legal team, and some comments that I made in reply to his questions. The process that has eroded me for months has concluded and become public. Eroded, as I had to cooperate with the investigation while maintaining total secrecy. Not being able to tell anyone the truth, while having to do things that make you look like a total asshole in front of friends and former colleagues is very consuming. [...]

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  2. What I never understand in these cases, is how the investors who sat on the board, SwissCom and Balderton (formerly Benchmark Europe) did not see it happening and supervise it. The board’s job is to make sure these things do not happen, even in a private company.

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    1. Jesse Kopelman Thursday, June 25, 2009

      You can ask the same question of any failed company, even when criminal malfeasance isn’t involved. A major failing of our corporate structures is that boards have great power, but no responsibility. This is a much bigger issue than executive compensation and one I wish governments would tackle. Indeed, if boards were handed some real accountability to shareholders and employees, the executive compensation issues would fix themselves — as these things are decided by the BOD!

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  3. Arnon: when the monthly burn doesn’t exceed a reasonable amount for the company structure, and the invoices look legit to an auditor, it’s very hard to detect such a scheme. Before a sale, for example, burn is reduced to a minimum, and this is when odd expenses can be spotted. In other cases, it’s necessary to get the input and do fact-checking with other people at the company not involved with the finances, in which case unexplained payments can also be spotted. It is also easier to spot that something is wrong when the embezzler doesn’t change his lifestyle and starts buying Ferraris, but rather doesn’t spend the money.

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  4. Well it is really no surprise to me. It was a joke from day one if you followed the whole sordid story. Now with the accusations of fraud it puts the cherry on the cake.

    I could never understand why Swisscom would consider backing such a feeble product, with talentless developers and management. I can only think that they gave a tiny amount of money to it, and that “Whisher” attempted to say “look at us! Swisscom fund us!!” to make them look important.

    Glad to see it failed, as it was a lame product, bug ridden and badly managed by a team who thought they had some vague idea of what the public wanted… fools

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  5. Eric – please leave the insults at home, or say who you are, and what your motivations are for such a bile flush. My guess at this time is “troll”, but I could be wrong, you could be the German dude who also spilled bile on my blog until I sent his IPs to goatse…

    We got funding from Swisscom. We got funding from Benchmark (later Balderton) – not exactly a small fund. I guess they must have seen something, and we must have done -something- right.

    Finally, who says Whisher failed? It may have failed as a company (and a big factor in that has recently transpired), but the product lives on at wifi.com, with a new team, and new aims. If wifi.com purchased the technology, they must have seen something in it, if it was so bug-ridden, they would have built their own, don’t you think?

    Anyway, it’s pointless arguing with braindead people like you, so I hope you live a happy life behind your keyboard, buh bye!

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  6. Well Mike, you blog is bullshit, with lies about “amazing” things Whisher / Wifi / what ever rubbish you call it can, will (never !!) do. You slated other start up’s but failed to see the F A I L factor in your own. You are kiss up to Martin V in the hope that you might be able to jump on his money train now that you find you have no money. FAIL FAIL FAIL. You censor any negative comments… you are the brain dead person behind a keyboard, not I

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  7. Nothing more fun that poking a troll with a cattle prod and watching him fume :D
    Oh, and you’re still an anonymous coward, so keep coming the crap and hiding, people don’t care about trolls who don’t put a real name and face behind their crap.

    (apologies that it’s your blog Om, just couldn’t resist)

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  8. “people don’t care about trolls who don’t put a real name and face behind their crap.” ….. what was it I said?

    “thought they had some vague idea of what the public wanted” …. yet again you make assumptions

    Mike, on a lighter note, your “Whisher – The Story” article has inspired me organize

    “Whisher – The Musical”

    Needless to say, the idea is that most of the cast will be talentless, expect for your character. The first person I had in mind to play you was John Candy, but then I realised he was dead.

    I will keep you posted as to which theatre will be showing it. An email to swisscom is already on it’s way asking for funding !

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  9. Emailed Om to remove the now tasteless personal attacks involving a fine actor who is deceased – you really are sick and should have your head looked at. Actually, donate your brain to science, it may help others with your condition.

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    1. ROTFLMAO …. are you serious!

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    2. Yep, Mike, that worked eh ;-)

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