Icahn Questions Motricity Investment; Has Faith In The Technology


Activist investor Carl Icahn, who poured about $100 million into Motricity last year, said that he now questions the decision following the news that Motricity will layoff 250 of its 600 employees and move to Washington state to be closer to its InfoSpace (NSDQ: INSP) acquisition, according to LocalTechWire.com.

Icahn told Private Equity Hub


radio silence

I guarantee the money-men were implored to maintain absolute radio silence to keep more of the truth from coming out in order to maximize their VERY slim chances of getting anything out the back end. We won't hear anything from them.

Calling VCs

So, what did the money people learn from the phone call?

Money Gospel

Got Burned – who is this infamous TV pastor that preaches the “money gospel”?

Got Burned

He works out some pretty sweet deals for himself each place he lands. For instance, do you think that his house "loan" is new news. Past behavior is a good dictator of future behaviour.

And, I have heard, that folks often live beyond the cash (salary) they actually make…sometimes (and this is just something I have heard from people) they use money that investors were thinking was in the business.

He did not make money off the nutritional deal – that would be too easy. He likes other people's money too much. Motricity is not his first example of this…check out reasons why he moved suddenly from the Nashville area to Raleigh…was it really because the talent pool was better? Seriously…Why move to Washington state suddenly? To understand the answers to these questions – it is always about Ryan…so, what would motivate him to up and move.

Icahn could care less at this point since his money is blown and it is clear that Ryan is on a short leash. Those are the questions you should answer and you can find the answers – they are not hard to get.

Compare the statement now, "That deal and Motricity management’s decision to embrace InfoSpace technology over that developed locally led to the layoffs and HQ move."

To the ones about the move from Nashville to Raleigh:
"Every industry has an epicenter," he says. "For music, it's Nashville, Los Angeles and New York. For technology, it's Silicon Valley and North Carolina."

He asked rhetorically: "Does it make sense to move RTP to Nashville or Nashville to RTP?"
(continues in the article)
The merger with Pinpoint gave Power By Hand access to software for managing and delivering mobile content, a capability the company needed to keep pace with evolving wireless technologies.

But such growth requires a critical mass of talent the Nashville area doesn't have and that North Carolina offers in abundance, says Wuerch.

"You have to be able to attract and hire leading talent to take a technology company to the next level," Wuerch says.

They are very similar and again, Ryan does things that are good for Ryan. There is no other motivation.

Icahn family affair

So it looks like Icahn traded his $100 million for TWO seats on the board, one for his son and one for his son-in-law Hunter Gary. Gary runs Icahn Sourcing LLC. Looks like he's in there to turn the screws on spending.

My take on the Icahn statement regretting the investment is that he wanted the high-living Motricity management to stop trading on his name, using it to imply that experts had blessed their shenanigans. They started citing his name so much I thought the name had changed to Motricity-Icahn. Maybe now it will…

question for "got burned&

I'm curious about this Wuerch character. Where did the money for his "lavish" lifestyle come from before Motricity's investors started funding it? From his take from the multi-level nutritional product scam? He must have had a pile of money to lose $1 million on the Success magazine thing.

Investor1 question possibility

Investor1, maybe you should ask these guys why they are the best people to run the show.

Many references have been made to Ryan's skills as a salesman. To me, it looks like this is way overblown. It looks like he's mainly able to sell only to the unsophisticated, and that anyone with half a brain and a google search box is able to see through the balderdash. He'll wind up doing something like selling cars or preaching in a rich suburb somewhere or starting another pyramid marketing scheme. Seems like the kind of guy who believed in some supernatural destiny so didn't put any money away for an emergency.

Got Burned

I have watched with amusement as the events of this last week have unfolded – and, could add very similar first hand experiences with Ryan back in his early days. What is interesting to me, is that his “spiritual conversion” happened very close to the time that he met his current (yes, current – you go figure out how many more he has had) wife – Shawntel. I have first hand experience with his lifestyle prior to his conversion and it was pretty fun to hang around him. Always a party and yes, the lavish fun, as described in other blogs did happen.

The really sad part about this is while all of us got “hoodwinked” by this unbelievable snake oil salesman, his current wife, Shawntel is actually a very genuine and nice person. Now, she might be faulted for not asking enough questions – but, then did all of us ask the right questions when we began our relationship with Ryan (whatever that looks like)? Understand, she MIGHT not even know that she continues to be paid a salary – weirder things have happened around Ryan.

I suspect that I also know who Investor 1 is and our paths have crossed several times over the years. I was always curious why you never contacted me once I severed my relationship with Ryan and definitely am curious why the VCs and other private investors never really dug into the trail of blood left by Ryan in everything that he touched. I knew something was seriously wrong when some sort of strange “spiritual advisor” began to go to business meetings & travel with Ryan. And, that relationship was definitely not physical (believe me on that one).

Life with Ryan was fun once – he was a great guy and absolutely a blast to be around. He is a great salesman and it is sad that he has not used that in a positive manner. I can almost pinpoint the exact moment that the change began and it was rapid and almost overnight. It began with his involvement Success (former magazine) and his encounter & eventual relationship (not sexual) with an infamous TV pastor that preaches the “money gospel”.

Pawning the Shop

Questions for the board:

Have you read the public sentiment from the trenches? Do you really want this hayseed in charge?

How will you migrate ATT from Motricity's dying codebase to Infospace's codebase without destroying the relationship, while not retaining the key people who built it?

What margins are you making on the ATT contract? Really, that low? How do you expect to fix that?

How will you retain ATT, knowing that they abandoned Infospace's awful storefront to come to Mo in the first place?

Aren't the technical operating costs for Infospace unduly high? How many servers are you running for production? Really, hundreds? Why so many? Who will be rearchitecting them into a smaller footprint? What do you mean Infospace doesn't have their own administrators?

How will you turn around the image of this gutted company and recruit talent to save it?

Since you've sold off the direct-to-consumer businesses, you're at the mercy of the carriers for your revenue. What are your contingency plans for business continuity if you have another bad contract, or if they in-source the business line.


Thanks for the suggestions. To "A question for you Investor 1"– I DID invest as part of a consortium (for lack of a better term) of VC's but as such had no direct approval/disapproval rights over Board actions (or Ryan actions, etc.). Frankly, it was long enough ago that it's been kind of dead money for a good while, and I stumbled across the most recent announcements, and this site, almost by accident. For what it's worth, when the rumors of downsizing first went public and the MocoNews blogs were posted, I did make sure that the substance of the comments (mostly from ex-Motricity employees, I assume) was passed along to VC's who have much more skin in the game than I do. So–you're right, I was too removed to have any idea that things weren't running along fine at the company (maybe if I'd have put more in, I'd have followed it more closely, but can't say I'm regretting that!). Tell you what, though, I do promise to post a follow up on what I hear. Least I can do.

A Question For You Investor1

First of all, I don't suspect you are an investor from a VC standpoint, more likely one of those common shareholder guys that thought you were going to hit it big time at some point. But let's play pretend and say you did have some VC money in the game. I got some questions for you…

Being angry at Ryan over his compensation package is ridiculous. It was the Board (i.e. VCs) that had to approve it. Hell, if I could convince my board to give me a lavish package based on a promise of the riches to come then more power to me (alas they aren't a bunch of empty-headed lap dogs falling for the 'late night infomercial' pitch of slick salesman with no track record). Why did you, Investor1, give in to these demands? Why weren't his rewards backloaded just as yours are? What credentials did he bring to the table that made you turn a blind eye to accountability and perfomance?

As far as the other allegations, VCs are too far removed to know of these day to day shenanigans and probably knew nothing of them until this blog appeared. So there was really no way for them to hold him accountable for these actions. I would like to think that their eyes have really been opened over the past few weeks and they are reassessing his role going forward.

Finally, the response from Motricity on spending:
"Sometimes you have got to act bigger than you are. You have to demonstrate that you are a player. You have to build a brand. You’ve got to look the part."

This is certainly a fair statement for any small company trying to break through. The disturbing part in this case seems to be how this 'deception' strategy seems to be part of an overall corporate culture – not an isolated tactical move. And if its true, I do not see how limos, first class travel etc adds credibilty to an organization. As a cusomter, what I would say is "How come you can afford this office space but you can't meet the performance requirements in our agreement – maybe you should have invested that money in some infrastructure as opposed to that coffee table over there."

In short, the target of your venom Motricity folks, is not with Ryan, but with the Board who is supposed to oversee this company and hold the CEO accountable.


You knew the party was over when the southern baptists from PBH mandated the demise of the Kegerator…

– Ryan profess his faith in meetings – absolutely

– Errands – check!

– 18 hour days – dunno how action packed those days were, but he was well-known to send diatribes and threats via email at all hours of the night

– China – dunno if it was china, but was pretty ridiculous watching the admins push the china cart up and down the hallways. Usually meant there was good food later, tho :-)

– low interest loan – guys this is more common than you might think… not saying it's right, just that vc's and similar types aren't going to read this and be shocked

– 100 employees left? – Nah, just saving face. Those 100 will keep the lights on for awhile, leave of their own volition and/or get laid off. This is just a small way of the company saving face as it gets ready to lock down the Conastoga wagons and flee Durham.

– Judd B – best question to ask him is "What are you doing next?" He's never been the CTO, just the made up title for the wunderkind. Boy did he date some hotties out of the CDS group, tho

wading through snake oil

I'm sure they've got lot's of hockey-stick projections to explain when and how much money they're going to make. One question to cut through the balderdash might be something like "What stands between us the current state and making money? What has to happen?" and THEN delve into how much it will cost and when it will happen. That question might more quickly cut to the heart of the quality of planning and the understanding of the markets and technologies.

Maybe it's asking how they're going to execute on the "merger" and what they're going to do. Is it gaining pricing power? If so, how do you maintain that with a lot of hungry competitors? Is it monetizing consumer purchase data?

Motricity insider

Investor1 – the WRAL interview was carefully planned and worded. Here's a question:

Did Ryan receive ANY loan for his house from motricity? (note that the interviewer specifically says 'interest free' – well if he paid $1 in interest, then he can truthfully say 'no i never receive an INTEREST FREE loan…" you have to really nail these snake oil guys)


surprise, more lies

Yeah, the WRAL thing was just more of the local press acting as a willfully stupid mouthpiece for snake-oil salesmen.

Regarding CEO perks, I suspect it's more the investors getting their panties in wads rather than employees. After all, it's their money.

To Investor1, it seems the question is pretty simple. Ask them when they expect to start making money and how much they expect to make. Then hold them to it.


Thx. 2800. Anyone else? Seriously looking for suggestions. Had some $$ in this company for years, been wondering if it would ever turn into something. I'm pretty doubtful at the moment.


Investor1: You should ask Jud some honest questions that any respectable CTO should know. Also ask him if his interactions with the CDS females have been solely professional.


So, let's assume I might be on a call with Ryan and Judd B. within the next week, at the end of which there might be a question and answer session….what's the best question I can ask?

WRAL thing, productive meeting

The part of the WRAL interview that really knocked me out, and might point to part of the problem with the Motricity culture, was the following statement: "You want your executive, your CEO, to be in meetings being productive all day long."

If Motricity has invented a way to make being in meetings all day long productive, THAT's what they should be selling. Forget ringtones…

Icahn's comments

Among all the hulabaloo around Icahn's comments on regretting the investment but Motricity having good "technology", regardless of recent clarifications and restatements, notice that Icahn pointedly did NOT say that Motricity had good management, EVER. And, by the way, that's what Carl KNOWS. He doesn't know technology, and admits as much. To "bitchers and moaners", I'm not sure it's the employees complaining as much as it is investors, who question why their money is being spent on china, limos, personal electronics assistance, and low-interest (read 0.5%) loans on overpriced houses when it should be invested in profitable growth. The answer is probably because management sees that no actual profitable growth is possible, so they're spending and having fun as long as the investors' money holds out, but who knows?

doing the scooby doo

Did I really read that he threw a birthday party…for himself???? Didn't I see that on an episode of 'The Office'?

Holy Roller

Truthshouldbeknown – you hit the nail on the head. I know…I was there. Any guess on how much of the loan and interest has been repaid?

bitchers and moaners – what planet are you from? or are you one of the prom queens?

bitchers and moaners

You people should stop bitching and moaning about Ryan's perks… he's the CEO for Christ's sake and most of you are just jealous. You want those perks too? Then earn them. Stop worrying about what Ryan drives to work… or loans for his house… or who picks up his dry cleaning. What a bunch of babies you sound like critizing him for this.


I would be questioning my investment as well…

This is an interesting story:


Motricity answering critics about the management there. Heh, I love how they skirted around the issues on this one. As for the first question asked, Did Ryan receive an interest free loan from Motricity for his home? Nope, but it was very low interest, and by all accounts should be considered interest free.

Did Ryan utilize Motricity Staff for running personal errands? They said only when he is working 18 hour days on “on occassion”. HA!! Ryan hadn’t worked an 18 hour day in his life, and on top of that, he not only used people for running errands, such as getting his clothes and other things, he also used the IT staff to take care of his personal computers, install electronics in his house and take care of his friends computers like Nathan and the like. This happened constantly and employees who didn’t agree to perform such work were threatened with firing. That’s the truth, period.

The person answering the question about Ryan professing his faith in meetings obviously wasn’t there at the time that it DID happen. It wasn’t for long, but it happened.

Ryan and Nathan would never go anywhere without a limo. They couldn’t take a taxi like the rest of us and if we had spent a cent more than what policy allowed, they would have our butts for it. They came in and changed the place from a fun place to work to a hell hole and it didn’t take them long.

Anyone who didn’t agree with them was threatened with being fired and they completely abused their power in terms of getting personal gain from employees. It’s sad, and I can’t believe the answers I saw on WRAL today. I don't know who this PR person is, but they obviously have no clue, or are actively trying to hide the truth.


C'mon. You invest that much money and don't look into whether or not its a good investment. Carl "I con" I don't believe you. Must be trying to save face with all your country club buddies.

Holy Roller

Oh Uncle Carl, if you had only done your due diligence, you wouldn't be in this mess. Sonny make a boo-boo.


I want a dad who'll toss me $100 million on a whim. I won't even screw up peoples' jobs with it.

Lookout below

Wow. Is it me, or are the wheels falling of this thing in a hurry. Icahn's comment that his son "talked him into it" and "I am not sure it was the right decision" is stunning.

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