sylvain courcoux

internet entrepreneur

my blog

Letter to the US Senate to investigate the origin of Close.io

This is about suspicions of a massive intellectual property cybercrime in Silicon Valley.
GoyaTelemarketing, submitted to Startup Chile under NDA, reviewed end of November 2011 by Silicon Valley startup experts
Close.io, launched in January 2013, started as a YCombinator pivot in late 2011
The Close.io founder
In case you're wondering about statutes of limitation
Not a single video of the founder talking about the inception of his software from 2012-2017 on the Close.io YouTube channel; these 3 interviews are on other channels
February 2013
October 2013
March 2014
Knowing how to program and knowing what to program: you can steal a man’s ideas but you can never steal his imagination. My name is Sylvain Courcoux, I’m a French internet entrepreneur, founder of the goyaPhone, and as a last resort, I’m writing to every member of the US Senate and the Governor and Lt. Governor of California about an injustice I’ve been struggling with for 5 years. My suspicions are based on tangible, time-stamped and notarized facts that point to a possible intellectual property crime committed by people within the Silicon Valley business elite.
I’m asking the Congress of the United States of America to open an investigation to determine how come Close.io, a venture-backed startup company that launched out of YCombinator, is operating a software with the same core intellectual property that I submitted under non-disclosure agreement to the Startup Chile incubator, and that was reviewed, as a fiduciary duty, by Silicon Valley startup experts for the benefits of the government of Chile and the entrepreneurs who applied. In the past, there have been controversies about the origin of the intellectual property of some tech visionaries, but they went on to build large-scale companies by building great tech products because they actually were visionaries. In this case, I’m claiming startup founders probably committed trade secret theft and investor misrepresentation and, instead of building a large-scale company, probably built their career using my intellectual property, and I’m asking the Congress of the United States to investigate this potential corporate fraud. Ultimately, there aren’t two sides to the truth, there’s just the truth. This is the notarized version of my Startup Chile application http://www.sylvaincourcoux.eu/constat.pdf , this is the video of my prototype https://www.youtube.com/watch?v=YXgK8OBQA0c and this is the video of the Close.io demo https://www.youtube.com/watch?v=55sAnbe6lXE Here’s a link to a jsFiddle that contains YouTube videos to watch: just visual facts https://jsfiddle.net/1mbc8tk2
I’ve lived in the US for about 15 years, mostly in California, and started my career in 1999 in San Jose. In 2001, because I had a work visa, I could only work for the company that had sponsored me which, after the dot-com crash, was pivoting into a mortgage company. I had a choice: go back to France or stay with that company which, at the time, meant sleeping under my desk because I barely had any money. It took me 6 months to cold-call my way out of homelessness, somewhat like in the movie The Pursuit of Happiness. I went on for 6 years, prospecting over the phone almost every day, and eventually training and managing people.
In 2007, with a co-founder, I started Krilix, an internet company that enabled local businesses to send SMS promotions to their customers and the friends of their customers. We spent 2 years defining the functionalities of a social network for local business and outsourced the software development. I pitched about 80 angel investors, raised close to a million dollars from over 60 investors, and led a team that built a sales network which, at launch, had 17 remote sales offices and 200 outside salespeople throughout the country. However, the timing was off: the website wasn’t commercially ready for the sales network and the company imploded at launch because costs far exceeded the anticipated revenue. As this was happening, I thought that instead of sending salespeople door-to-door, a better strategy would have been to hire just 50 inside salespeople and reach local businesses remotely by making a million phone calls. In the midst of chaos, I went to look for new investors and hired another software consultant to start building a phone dialer. However, the existing investors didn’t want to hear of this new strategy and I was fired from my own company. I left with the idea of using my previous sales experience to build the sales software I had always wanted when I was making cold-calls.
Instead of outsourcing the software development, I decided to teach myself programming. 9 years of university, 3 computer classes; how hard could it be? From the summer 2010 till the end of 2011, I read 5,000 pages of various computer books and built a prototype of a CRM sales software. It also happened that I was out of legal visa options and had to leave the US. I learned Spanish because I wanted to discover South America, in particular Chile. The Chilean government had just opened Startup Chile, a startup incubator that was offering a 40K grant to attract internet entrepreneurs. I applied with my prototype, it was called GoyaTelemarketing.
To help set up their startup incubator, the Chilean government hired startup experts from Silicon Valley. The board of directors of the Startup Chile incubator is mostly comprised of Stanford and Berkeley faculty members, as well as other prominent Silicon Valley startup experts. To process their startup applications, Startup Chile used an online platform called YouNoodle, a company based in San Francisco. Startup incubators and entrepreneurs worldwide use YouNoodle to process intellectual property and startup applications. In October 2011, the Startup Chile program received about 600 applications. At the time, I was living in the middle of rural Virginia and had never submitted my intellectual property to any investor because I knew there’d be a risk that someone would just lift the key functionalities and build the software.
The YouNoodle application, my website’s page and the Vimeo videos of the prototype and the personal pitch were all password-protected. The startup applications were covered by a non-disclosure agreement, as was indicated on the Startup Chile website archive https://web.archive.org/web/20111017193149/http://www.startupchile.org:80/about/faqs/. I think the Silicon Valley startup experts must have known they were providing their expertise in the form of a fiduciary duty for the benefit of the entrepreneurs and the government of Chile, and that they weren’t to take intellectual property to build a software company if they came across something they liked. My startup application was reviewed by California startup judges at the end of November 2011. No one from Chile ever logged into my website’s application page because all the IP addresses were from the US. With my career experience and my software prototype, I felt I had a good chance of being among the 50 selected projects but in the end, I wasn’t. So I moved back to Europe, and continued coding. I reapplied to Startup Chile in April 2012, but wasn’t accepted then either.
On November 29th 2012, I discovered Close.io, a CRM sales software in beta. The narrative of how Close.io started goes something like this: we were at YCombinator, the most prominent startup incubator in Silicon Valley, working on SwipeGood, when we realized that startups were struggling to structure their sales force (a problem I had with Krilix) and so we pivoted and created a new business model to provide startups an outsourced sales force on-demand advisory service, and right away (meaning early December 2011) we also started developing our own internal secret sauce sales software that …. just happens to have nearly all the functionalities and user experience claims I had submitted to the Startup Chile program. This double pivot happened within a matter of days after the startup experts hired by YouNoodle reviewed my software prototype; not years or months, days after. How many outsourced sales services, sales consultants, sales advisors are there? Tens of thousands but when you’re at YCombinator, soliciting other VC-funded startups for outsourced sales consulting, everything probably becomes much easier, especially if you also have millions of dollars to make it happen.
I had submitted a trade secret was seemingly simple but that represented a lifetime of work: build a sales software that worked as a communication tool instead of a data-oriented software. The idea had a two-pronged approach, with two benefits. The task of prospecting is about making phone calls and sending emails, at the right time, to the right people. My prototype enabled salespeople to make sales calls through their web browser, in one click, as opposed to manually dialing each phone number, and send follow-up email using email templates, a real time saver when prospecting because sales emails are all very similar. Since these sales activities happened online, within the software, they were also automatically and accurately logged, and thus spared salespeople the task of manual data-entry, another real time saver compared to data-oriented CRM software where salespeople manually log their sales activity. The second major benefit of my prototype is that with all the sales history available, it later becomes possible for salespeople to do their follow-up by finding prospects based on their previous sales work; for instance, "show me all the prospects that I talked to for more than 10 minutes and that I called over 3 months ago, and who were also willing to receive an email", meaning find the prospects that I forgot about and that may be good business opportunities. This search functionality enabled salespeople to recycle their work and find sales opportunities they would have otherwise forgotten about: my software was designed to be the memory for salespeople. It was a functionality that wasn’t available in other CRMs and the Close.io video demo also states that finding leads based on previous work is something "you cannot do in any other CRM", except in my prototype. The Close.io filters add extra features, but the core concept of the search functionality is essentially the same. In short, my prototype was a CRM that worked as a communication tool and that had a search functionality that facilitated the follow-up. But somehow, the intellectual property of my prototype is about the same that also powers the Close.io.
When people in the general public think of salespeople making cold-calls, they mostly think of the cold-calls they receive but in reality, the bulk of the business world is businesses selling to other businesses. Salespeople who work in office buildings make sales calls, not so much to call strangers, but mostly to follow-up on previous leads and nurture upcoming opportunities, which is why a CRM focused on the follow-up is so critical.
Just about all the functionalities of my GoyaTelemarketing prototype are in the Close.io software. The layout and the color palette are different, some functionalities are implemented a little differently, and so to an untrained eye Close.io and my prototype may seem different but people in the software industry will know that the core functionalities of my prototype are about the same as the ones that power the Close.io. And from there, the Close.io team added and expanded their product, and raised 25 million dollars from top angel and VC investors to make it work, probably by misrepresenting the origin of their IP during due diligence.
We all have our talents, gifts and superpowers, but we all also have weaknesses. My biggest weakness is procrastination: for 2 years, I procrastinated on dealing with this problem and just kept coding my software. Sometimes I’d watch a video, read a Quora post or a blog post of Steli Efti, the founder of Close.io, bragging about his startup pivots, about the merits of the Close.io software, and it was gut-wrenching to watch essentially the same content as my Startup Chile application and about the same narrative of my career repeated at scale; could be a coincidence, but maybe not. I cold-called almost every day during a 7-year sales career and figured out how to build an innovative CRM sales software: he claims to have created a CRM sales software built by salespeople for salespeople, with just about the same core functionalities. At every job interview I’ve been to, I was always the person doing the interview and have always created my own job: he was bragging about being unemployable. I had hustled by perseverance and methodical follow-up: he was all about the hustle and the follow-up. I wrote two blog posts about the essence of sales being a matter of perseverance, asking closing questions and following-up: the core of most of his keynote presentations at startup conferences seemed to be structured around perseverance, asking closing questions and following-up, and so I stopped writing my blog. I ran around the Valley pitching 80 investors: he also has a story where he went around the Valley, possibly with my intellectual property, and pitched all sorts of angel investors, perhaps as an emulation of what he read on my Startup Chile application. But, for 2 years, I wasn’t able to do anything about it.
I started researching the issue and it wasn’t until the end of 2014 that I came across the concept of trade secret theft. If you walk in a VC’s office and pitch your intellectual property to an entrepreneur-in-residence, there’s no theft if it’s later used to build a business, because you willfully disclosed it. However, if you protect your intellectual property and someone takes it away from you against your will, it becomes trade secret theft. In the case of my application, there was a non-disclosure agreement and even though I willfully submitted my intellectual property to the Startup Chile program, the expectation was that it would be evaluated for the mutual benefit of the government of Chile and me, and not potentially recycled into another startup. And I think the startup judges must have known that.
In January 2015, I wrote a private blog post that summarized my claims against Close.io and that sought to settle this dispute for 2 million dollars or else I would contact the authorities (French income taxes were 75% at the time). I contacted a Silicon Valley IP attorney I had previously done some business with. We had a brief exchange on LinkedIn and I sent him the link to the blog post. I realized much later that this lawyer was also part of a prominent angel investor group in Silicon Valley. He spent about an hour on the phone with me, explaining that there was really nothing I could do about it, that contacting the press or the authorities wouldn’t help, and that it’d be better to just keep building my software and compete in the marketplace. I recorded a good part of the conversation. In the end, he referred me to supposedly the top IP attorney in California. We had several email exchanges and phone calls over a period of about a month but in the end, IP litigation costs over 200K just to start and without any money, there’s no IP lawsuit.
I spent a few more months procrastinating and thought that since I couldn’t afford a lawsuit, I’d simply blow the whistle about my dispute, ask Close.io to cease and desist, and crowdfund a lawsuit if need be. Before going public with the dispute I went to see a French notary to protect the electronic evidence of my claim because I thought someone could delete my Startup Chile application in order to cover things up. At the end of September 2015, the Startup Chile application on the YouNoodle website and the entire software prototype with the code, the goyaPhone logo and the user interface was all saved and time stamped: the Youtube video of my GoyaTelemarketing prototype along with the online application is what I submitted in October 2011, although the prototype video is actually the one I submitted in April 2012. I early 2012, I got a new SSD drive for my laptop and hadn’t backed up the prototype video of October 2011 before reformatting the old hard drive; I tried to recover the 2011 prototype video with a data recovery service but they weren’t able to do so. Rewriting my blog post and filming the hour-long speech that explained my claims took about 2 months total. I showed facts and ended with a simple non-monetary demand: "you close, we’re done; want to do it?" If they were willing to acknowledge my claims as the truth and close their software then this seemed to me like a fair outcome. Everything was press-ready mid to late October 2015.
I wasn’t sure about this legal strategy so I started cold-calling IP attorneys throughout the US, with the same pitch. "Hi, I’m calling because I think a Silicon Valley startup committed trade secret theft and I want to blow the whistle on it, ask them to just close for nothing in exchange, and crowdfund a lawsuit if it doesn’t work. Is this OK? Can you help me with a lawsuit on contingency?" I made about 200 calls: lots of voicemails but I spoke to about 50 lawyers. The German phone company doesn’t keep phone records for very long but it’s a known fact that the US government keeps the meta-data of overseas calls. Most calls were really short conversations that lasted about a minute or so but about dozens resulted in longer exchanges. I even had a conversation that lasted about 10-15 minutes with a lawyer at their law firm, someone who had skipped the conflict check and who knew everything I was about to do. All other conversations with were lawyers with whom I did conflict check. Some lawyers referred me to colleagues, and some saw my password-protected blog post with the video speech. But overall, it was the same problem: no money, no lawsuit. I tried lawyer referral services of county bar associations but that doesn’t work when you’re overseas. I also sent my blog post to 3 journalists but lawyers explained that no lawsuit meant no press coverage. However, several lawyers mentioned that going with a public disclosure exposed me to a risk of lawsuit and that a more traditional approach would be to contact the Close.io directly. 2 months of work to prepare a public release of this dispute but instead, it seemed like a direct approach was going to be better and less risky. This was a big risk to me because a lawsuit is expensive to fight against when you’re a defendant: you’re in Germany facing a lawsuit on the other side of the world and you can’t fight back because you don’t even have the money to afford the train ticket to the airport. And so it seemed safer and more conventional to contact the Close.io rather than go with a public disclosure and risk a lawsuit.
In haste, on October 29th 2015, I wrote a short email to the Close.io stakeholder. I sent it twice to make sure all the stakeholders received it. When you’re writing a letter seeking to settle a legal dispute, you should just show the facts, reference your claim to a tort in the Civil Code, and make a monetary demand. Do not explain the benefits of settling versus the risks of not settling, let their lawyer explain it. I did the exact opposite. I showed the facts (prototype + application) but I also gave them the password to the blog post, which at the time was about 30 pages in print to explain the USC 1832 trade secret theft claim, I showed the 50-minute video speech, a shorter video trailer and I explained why it’d be better to settle than let this dispute go unresolved. I didn’t ask for the money. I asked them if they could propose a settlement option that could resolve this dispute to avoid it from worsening into a full-blown lawsuit that I would crowd fund according to my plan of a public disclosure. By definition, it’s not often that you hear of legal disputes that get settled confidentially, but it’s a common business practice. They didn’t reply and the statutes of limitations expired. It was pretty awful because it then felt like there was nothing left I could do.
In January 2016, things got worse. About 2 months after contacting the Close.io, wondering why they didn’t reply, I discovered the concept of extortion and blackmail. This was really bad: I went from a situation where I had a legal claim to a situation where for the first time I might have broken a major law, unknowingly so. I wrote about it on Quora https://www.quora.com/What-is-some-legal-advice-that-everyone-in-the-United-States-should-know-and-be-aware-of/answer/Sylvain-Courcoux-1 : never explain what will happen if you can’t settle a legal dispute. You might think of it a friendly courtesy, but it’s actually an illegal threat. When people think of laws that cover threats, most would think of an illegal threat, such as using a gun or a baseball bat, but explaining that failure to settle means that the dispute will eventually be taken to the public or law enforcement is actually an illegal threat, even if the actions are themselves legal. It felt so unfair because I never intended to break any laws, which is why I asked lawyers about it in the first place: I knew ignorance of the law is no defense. I spoke to 50 lawyers, explained what I was confronted with, what I wanted to do, and out all these lawyers, I remember there was just one lawyer who used the word extortion in a conversation that lasted about a minute, but it sounded like it was a kind of lawsuit, and so I kept on dialing. It also means that all the other lawyers, from the first two who saw the initial private blog post, to the ones who just heard the quick-pitch, to the ones who evaluated my claim to consider contingency representation, to even the one who worked for their law firm, not one was able to lift a finger, and point it to a Wikipedia page. If I had known there’d anything potentially illegal about how I wrote things, I would have written them differently because I would have then known that writing anything that could open a cause of action against me would be totally counter-productive to my interests; but the lawyers who heard and saw chose to keep quiet, even though they knew. Priced out of justice, and mislead. In the following few months, I discovered what depression really means. But I kept on coding, living in fear, with a deep feeling of injustice: how was I now going to call the authorities about the Close.io?
On July 19th 2016, I went to Stuttgart for a startup pitch battle. We were 10 entrepreneurs in competition for three tickets to pitch in September to a large audience at a German startup conference. On the panel were five German startup experts. I went first because of alphabetical order and opened with a simple question: "how do you find a customer?" I knew I had a strong pitch because I was solving a large scale problem with a software product that was technically deep, and after years of work, almost finished. https://twitter.com/PirateGlobal/status/755451712245264384 When we were all done pitching, several people from the audience came to congratulate me but, when the competition judges came back with their decision, I wasn’t in the top 3. Why? I went and asked what I could do to improve my pitch: "nothing, you had the best pitch, but your software is the same as Close.io". Verbatim. That’s how similar that intellectual property is. That felt really unfair. I left because it seemed pointless to argue but I knew then that I had to call the FBI about the Close.io problem. As I was leaving, I noticed a quote from Hegel on the building of the Stuttgart train station: daß diese Furcht zu irren schon der Irrtum selbst ist. I asked a bystander what it meant: fear of making a mistake is the mistake. I left Stuttgart with the idea of overcoming my fear and finally contacting the authorities.
I wanted to make sure that the criminal complaint wasn’t going to be a repeat of the mistake I made when writing the civil settlement emails, so I went back to cold-calling more lawyers. Intellectual property lawyers, criminal lawyers, the pro bono programs of major law firms, boutique firms, former US attorney prosecutors: no money, nothing. The process is called a criminal referral and the cost was around 10K because of the time it’d take to first evaluate everything I had written and then the time to write the complaint professionally. However, something interesting happened with the last US lawyer I spoke with. He was a former US attorney and after hearing everything, he asked me a seemingly simple question: "the similarity of the two software and the matching timeline could just be considered circumstantial; do you have any other independent evidence that could corroborate what you’re saying?" On the spot, I couldn’t think of a good answer, and we ended the conversation on this baffling point.
I thought about it for a good fifteen minutes: do I have a second track of evidence that could confirm probable cause. The same intellectual property, the same marketing message, a timeline that matches to the days, but do I have anything else? And then it hit me: yes, yes, yes, I do! I have a second track of independent and fact-based evidence: the YouTube channel of Close.io. The Close.io strategy was to do content marketing and there are over 900 videos on the channel, mostly of the founder Steli Efti. There are four elements that corroborate my claim.
First, I remember very clearly that in 2013 Steli Efti did several videos bragging about his double pivots extraordinaire that led to the Close.io software and then several videos of him bragging about the benefits of the Close.io software. These videos were painful to watch and were probably part of the reason I started procrastinating. Maybe some people from the public or within the Close.io team will remember the founder doing at the very least one video about the inception of his company and his software in 2012 and 2013. However, if you go to the Close.io Youtube channel, there’s not a single video about the inception of Close.io from that time period; not one. Isn’t it strange? So there could be two reasons: he never published any such videos, or they were all deleted. Now if he had published videos about the genesis of Close.io, why would a founder, through a deliberate and willful act, delete all the videos about the inception of his company? Maybe to cover things up.
The second element to look for is the 2013 videos of the founder talking about the inception of his company on other YouTube channels. Here are 3 segments of the Close.io founder talking about how his company started. 1) https://www.youtube.com/watch?v=jyPWi-EsI2I&t=12m45s ,2a) https://youtu.be/u0qfz3903pQ?t=7m18s 2b) https://youtu.be/u0qfz3903pQ?t=14m50s 3a) https://youtu.be/a9DCGT_fZ0s?t=1m45s , 3b) https://youtu.be/a9DCGT_fZ0s?t=8m10s I think that experts in body language and interrogation techniques will most likely agree that the founder is likely lying on camera, on three separate occasions. There are other videos of him at conferences where he’s giving keynote addresses and there too, I think there are clusters of deception when he’s talking about the inception of his software in public; here’s one: https://www.youtube.com/watch?v=t-K2DHi99oI This speech of him at Tedx is worth watching while keeping in mind the backdrop of my claims: https://youtu.be/NrUw4S76jFQ?t=2m2s The August 2016 lawyer exchanges ended with a positive because even if it wasn’t conclusive proof, I finally had a second track of independent evidence that reinforced my suspicions. There are two more elements in the Close.io video channel that also reinforce my suspicions, but I only noticed them more recently.
However, I still had the problem of filing the criminal complaint. And so… I procrastinated some more because of the fear of having to file it myself. There was a trade show in September and then in October I was coding and couldn’t start, November flew by quick and so came early December 2016. The problem is that trade secret theft is a federal crime with a 5-year statute of limitation that starts running at the time the offense is committed, but I just couldn’t pull the trigger and start writing the complaint. The fear of having written the settlement emails was overwhelming because during the summer of 2016, the founder did a lot of videos about winning, victory, and seemed really confident and so my fear was that he had gone to the FBI with my 2 emails and got immunity. I didn’t know that for sure but that was my fear and I just couldn’t file the complaint. It felt so unjust. But then, on December 29th 2016, I noticed that the statutes of limitations for trade secret theft under California state law start running from the time discovery!! From despair came hope: I had another 11 months to file because I discovered Close.io on November 29th 2012. That was a big relief and so my New Year resolution was to do the criminal complaint myself, and on time.
I started writing the complaint in January 2017, explaining everything and asking for immunity. The process was slow. I also wanted to include all the email exchanges I had with lawyers to show my good faith so I started compiling them. When I was finished, the PDF file was 510 pages: about 150 pages prior to sending the settlement emails and then hundreds of pages after. I recently noticed I missed an email and should have also included the LinkedIn exchange with the first lawyer. As I was writing the complaint, at one point, I went to the California AG website to look at the complaint form: 3,000-character limit. After several weeks, I had written a dozen pages, and everything had to be condensed and rewritten.
On April 27th 2017, I finally managed to file the criminal complaint to the California AG. It was short and I added a link to a webpage where I had the videos of the prototype and the founder as well as the PDF with all the email exchanges. At the last minute, I didn’t include the password because it was written that the information I was submitting could also be transferred to Close.io and I thought it’d be better to wait for a reply before sending all the evidence. In the complaint, I explained the problem of the settlement emails, asked for immunity and asked the California Attorney General to investigate how the Close.io started. I sent the complaint and spent the next few days waiting, bracing for the worse but hopeful people in the justice system would see the possible injustice I was describing. A few days later, I got an email back: basically, contact a lawyer to resolve your dispute. I was baffled because I explained I couldn’t afford the hundreds of thousands it costs for IP litigation. After years of fear, I finally contact the justice system, and, nothing. I thought that maybe the complaint wasn’t clear enough so I wrote a second one in May 2016 and this time, no reply. Why?
In June 2017, I was in Lyon and I had the idea of going to Interpol. I went to the building but they don’t take complaints from the public: I was redirected to the French police. I filed a complaint with the French authorities and gave them a USB key with all the evidence but the police officer who took the complaint told me that since the dispute was occurring in the US, there wouldn’t much they could do. I left the police station thinking that I had to find another California jurisdiction and I decided to contact the Santa Clara County district attorney. On June 21st 2017 I sent a very short email with just the essentials and mailed a USB key with all the evidence, in particular the PDF with all the email exchanges.
In early July 2017, I had a major major discovery: the legal concept of mens rea. In criminal law, in order to be found guilty, you need to have both broken a law and have a malicious intent and state of mind. In other words, the difference between law and justice is that law is about what’s black and white, and justice is about what’s fair and not fair. In my case, I can prove that I had no malicious intent in sending the settlement emails: I thought I was doing the right thing. There’s ignorance of the law, which is when someone does something without prudent and prior research and breaks a law because of carelessness, and there’s mistake of law. In my case I was mistaken into thinking there was nothing illegal about what I was doing because I had asked lawyers and of those who reviewed my blog posts, I had the reasonable expectation that if there had been anything illegal they would have told me. I asked specifically, that was part of the reason I contacted lawyers. When I sent the settlement emails, I had the same intent and state of mind as a lawyer, settling an intellectual property dispute, but just not the same skill and information. So at that point, in early July 2017, I had some relief in knowing that there was at least a legal concept that I could build a defense around, if need be. Of course, still no certainty because guilt or innocence is determined by a court, but at least there was hope I had some ground to stand on.
In July 2017, seeing that the Santa Clara District Attorney had received the USB key but not hearing anything back, I wrote another complaint via email. This time I wrote in more details, hoping that someone would launch an investigation at the county-level. But still, nothing. Imagine you have a major legal problem, you call 911, and there’s nothing. Why?
In August 2017, I decided that I was going to contact every state and federal law enforcement agency that could investigate my claims. The trade secret theft statutes of limitations had expired at the federal level but were still running at the California state level. Statutes of limitations for securities crimes committed against financial institutions run for 10 years. And when multiple people are involved, the statutes of limitations for conspiracy run for as long as the conspiracy runs. I started writing a very in-depth complaint that explained everything in hopes there would be an investigation on the origin of the intellectual property of Close.io: it took me several weeks to write. Even though I had reassurance that lack of mens rea would be of some protection for my deeds, I still had fear. In particular, because of the videos of the founder where he was talking with high confidence about victory and of high moral principles, I really feared that the Close.io founders went to the FBI with my settlement emails, explained everything, and were granted immunity. That would explain why I had not received a reply from the California AG and the Santa Clara district attorney.
On September 13th 2017, the complaint was finally ready. It was 13 pages long, and I had no idea if the Justice system was going to rescue me or crucify me. I sent it online to the FBI, the California AG, the REACT force, the Norcal Cyber Crime Unit, the SEC, the DOJ CCIPS and the DHS IPR Center. It took a few hours to send it to all the agencies. I also sent the DOJ and DHS two CDs with all the evidence I had. I felt that sending this complaint would finally bring closure to this situation. About a week later, I received a reply from a Santa Clara Sheriff on the REACT force: they didn’t have jurisdiction. That was the only reply I received but I thought it would take a few more weeks to hear back, time for the investigators to sift through all the content. But now it’s been five months, and I haven’t heard anything back from anyone.
At the end of September 2017, I decided I was also going to contact IP lawyers in Paris to see what would be possible from France. I summarized the facts on a webpage, with videos of my prototype, the Close.io overview, the founder answering interview questions and this time just a few lines of text. I started emailing and calling the top law firms. The good news was that IP litigation in France costs a fraction of what it costs in the US but the bad news was that French lawyers are barred from taking cases on full contingency. I went to see one lawyer in Strasbourg, but same problem: no money, no lawyer, no justice, same story.
In October 2017, I asked a question on Quora about a pressing issue: statutes of limitations. The more I waited the bigger this problem became and I thought then that the expiration at the state level was November 29th. However, as the lawyer on this Quora questions answered https://www.quora.com/If-a-victims-files-a-criminal-complaint-with-the-CA-attorney-general-does-that-stop-the-statutes-of-limitations-of-the-crime-from-expiring , for frauds, the statutes of limitations in California run 5 years after discovery by the Attorney General, not by the victim. So it looks like the statutes of limitations for the trade secret theft at the State level may have merely just begun because I first filed in April 2017.
In late 2017, I noticed something strange on the YouTube channel of Close.io. The founder had been posting a video almost every day for the past few years but for over a month, soon after I filed the long criminal complaint, nothing new: he had gone quiet. Then, it started again and for the first time in years, the founder did a video explaining how the Close.io started. In 2016, Steli Efit did a very vivid video about the gift of honesty https://www.youtube.com/watch?v=L6JMwNJatL8 and that led me to assume he went to law enforcement with my settlement emails and disclosed that the Close.io started with the IP of my Startup Chile in exchange for transactional immunity. And so I thought that the reason he never posted a video about the inception of the Close.io was that he didn’t want to disclose to the public the story he had told law enforcement. But finally, after years of waiting, on a video he posted in December https://www.youtube.com/watch?v=oUucWqjDZL4, he persisted with the story of the pivots extraordinaire, which means that if he had received some form immunity with the story of the double pivots, there would be a chance it would be nullified if an investigation actually confirmed my claims.
But there’s another fourth thing I realized about the founder’s videos: it’s not only possible deceptions that transpire from these videos but also character. We don’t judge people by the color of their skin, the money they have or the work they do, but we do look at a person’s character. Here’s a video segment in a longer video of a psychologist talking about narcissistic personality disorder https://www.youtube.com/watch?v=YtSJUkP_yic and here’s one about the malignant type https://www.youtube.com/watch?v=x54z2pRAvtg . In short, it looks like it’s a mental disorder which, at the extreme end of a spectrum, causes people to commit big crimes. They’re usually successful individuals but their success is partly based on cheating, deception, defrauding, lying and such. I’ve compiled on the blog version of the letter and on this jsFiddle link https://jsfiddle.net/1mbc8tk2 a list of YouTube videos of the founder which professional profilers, psychologists and academics could review and provide us with an expert opinion. Here’s one to watch with the backdrop of my claims in mind: https://www.youtube.com/watch?v=Mwg4n2ZEqQA Here are two videos of him at a keynote that I think will be interesting 1) https://www.youtube.com/watch?v=CDGpqUe0T1I and 2) https://www.youtube.com/watch?v=ShisEcNiE4E
There’s a saying that the biggest trick of the devil is to make everyone believe he doesn’t exist, and that the devil’s in the details. It’s because people who cheat and who are good at it are not easy to spot: most people are fooled because, by definition, that’s how trickery and fakeness actually work. I think that if you watch the videos with the backdrop of my suspicions, which at the moment are not proven, some might see trickery and malice. The founder has talents, no doubt, but how many sales motivators, sales trainers, sales experts are there? Tons. How many use their expertise to build a software? Usually none.
According to my understanding of the theory, narcissists are expert manipulators and in this case, it’ll mean that after my request for a Congress investigation, the founder will likely unleash all sorts of personal attacks against me, and will probably try to pose himself as the victim. For instance, I expect he will loudly claim that my sending the settlement emails was the worst act ever, so that people overlook the reason why I sent them in the first place, and not press him on the origin of his intellectual property and the numerous coincidences. In other words, if my suspicions come to be proven, the person who might have built his career by defrauding me of mine would then try to portrait me as the culprit in people’s mind. According to my understanding of theory, narcissists attribute their flaws to others and claim to themselves the qualities of others. Here’s a video of the founder talking about fraud https://www.youtube.com/watch?v=YoyoZczMbtY. Here Steli Efti is very natural, some who will watch it knowing about my claim may see aggressivity https://www.youtube.com/watch?v=ZegTZn6bCws . I also expect there will be all sorts of material designed to explain the coincidences because he’s had time to anticipate. However, if a Congress investigation ultimately proves my suspicions, it would mean that the founders and their co-conspirators would have defrauded a foreign government, prominent Silicon Valley angel investors, top-tier VC investors and would have been lying and deceiving people about the origin of the Close.io software for over 5 years, including employees and including investigators if in fact there’s already an investigation underway following the September round of criminal complaints.
If my suspicions come to be proven, these videos would then become a reminder of what an impostor and a sociopath looks like before caught. Sociopaths don’t look like scary people: they look like the most amazing and charming people you’ll ever meet and they can fool quite a few people before being discovered. That’s also why I’ve been scared for years: fearful of what will happen when the similarity of the software and my claims surface. And so that’s the fourth element of independent opinion-based evidence that could corroborate my suspicions: I think that psychologists could possibly conclude that the videos of the founder potentially depict a sociopath with malignant narcissistic traits.
So that’s how I started this year: stuck in a feeling of a mind-blogging injustice against high-profile antagonists, and nothing left I could do. In 2013 and 2014 I procrastinated. In 2015 and 2016, I contacted about 80 US lawyers: hundreds of phone calls and 510 pages of email correspondence that lead to nothing because I was priced-out of justice. Intellectual property litigation costs hundreds of thousands of dollars and even lifting a finger and pointing it to a Wikipedia page was too much. I contacted the Close.io in October 2015 in an attempt to settle the dispute myself, but that turned out to be a blunder, even though I can claim it was an honest mistake because I can show I was mislead by multiple attorneys. In 2017 I contacted every law enforcement agency I could find: I’ve filed criminal complaints in April, in May, in June, in July, in September: 11 criminal complaints, and so far, nothing. Maybe there’s something happening internally but I’m assuming that if I haven’t heard back by now, then nothing’s happening and I doubt that another batch of criminal complaints would lead to a different result.
So in early January 2018, I was left wondering what else I could do. And then I realized that there was one last resort: ask Congress to launch an investigation into this potential intellectual property crime.
Here are the matters of fact: 1) just about every functionality of my GoyaTelemarketing prototype is in the Close.io software, 2) I submitted my prototype to YouNoodle, a California company, for the benefit of the Startup Chile program, under the expectation of non-disclosure agreement in October 2011, 3) the startup experts who reviewed my application knew they were providing their service as a fiduciary duty for third-parties, here the government of Chile and the startup applicants, 4) the prototype was reviewed by Silicon Valley startup experts at the end of November 2011, 5) the founder of Close.io claims to have pivoted from SwipeGood to ElasticSales within a matter of days after my GoyaTelemarketing prototype was reviewed, 6) the founder of Close.io claims to have started building their Close.io internal secret sauce software at the beginning of their pivot, 7) the founders of Close.io were at YCombinator when they had their pivots, 8) there’s not a single video of Steli Efti between 2012-2013 describing the inception of the company on the YouTube channel, 9) the founder of Close.io raised 25 million dollars from the top angel investors and venture capital firms claiming to be a visionary who had two successive business pivots.
Here are matters of personal opinion: 1) the intellectual property of Close.io is likely related to my Startup Chile application, 2) on the few 2013-2014 videos remaining on other YouTube channels, the founder is probably lying and being deceptive about the origin of the intellectual property, 3) the hundreds of videos the founder probably show sociopathic signs of malignant narcissism. These are matters of personal opinion and would have to be submitted to field-experts. If confirmed, they wouldn’t be proof but would independently corroborate the facts and my claims.
At the bottom of the bottom of the bottom of it all, there aren’t two sides to the truth, there’s just the truth. The intellectual property that powers the goyaPhone and the Close.io is almost identical and the timelines match to a matter of days: it’s either the result of the most amazing set of coincidences, or it’s an intellectual property fraud compounded with a financial fraud.
Trade secret theft is a sophisticated crime, few can pull it off. One must be in a position of access to trade secrets, then recognize the economic value of a particular trade secret and then have the ability to convert it into monetary value. Ultimately, trade secret theft is not just a matter of stealing someone’s intellectual property for monetary gain: it’s also about stealing someone’s career during the business operation of a trade secret illegally acquired. A B2B tech startup company is worth about 5 times its annual revenue. If, out of millions of salespeople worldwide, a hundred thousand pay $100 per month, that’s 120 million in annual revenue and about half a billion in valuation; software good enough for 100K users scales to more users over time. That was my motivation to learn programming and build my software, as well as the motivation of some people at YCombinator to probably steal it from me. I claim that Close.io is probably a cybercrime with a billion-dollar intent because I think some people probably saw in my prototype an opportunity to cheat and win big.
The reason some tech companies become really big is that they’re spearheaded by founders with the imagination necessary to continuously conceive new solutions to large-scale problems. The key word is continuously. Yet, after 5 years of operation, the founder built a great personal brand but has Close.io hasn’t evolved into anything else beyond a CRM? It’s like the difference between playing Mozart and being Mozart: it sounds the same but it’s not the same skill and may be part of the reason the investors funded Close.io was likely in the ability of the founder to pivot. In the end, it’s a battle of imagination, of ideas. It’s hard to know how many users there are on the Close.io but if you look at the Close.io plugin on the Chrome Webstore, there are currently 649 users. If you look at the plugins of other CRMs, some have tens of thousands of users. In any case, it doesn’t look like Close.io turned into a Salesforce-size billion-dollar company for which there’s anticipation of a hot IPO.
For over 5 years, I’ve been watching the Close.io and Steli Efti operate with intellectual property that might have been illegally taken away from me. I’ve made mistakes along the way. I also feel that I’ve been wronged and wronged and wronged. I never sought anything malicious or dishonest. This isn’t a fight I went to look for; this is a fight that came to me. On the jobs page of my website, I ask a simple question: what’s the hardest thing you’ve ever done? For me, dealing with the Close.io dispute has been by far the hardest thing I’ve done because I’m not a fighter, I’m an artist, and artists don’t make for good fighters. There are people who’ll say "well if I’d had my intellectual property stolen, I’d have reported it right away" without thinking that maybe they wouldn’t have had an intellectual property dispute in the first place, precisely that reason.
I did what Karl Marx thought would be impossible: for a man to someday own a factory with his work alone. I did what many people in the startup community think is impossible: for a single-founder with a sales background to learn how to program and build a sales software for which there is a scalable demand, a software so good it was probably stolen. I worked as a single-founder not by choice but out of necessity because I didn’t want to bring anyone on board until this dispute was resolved. I can spend months sleeping under my desk, learning how to cold-call and how to sell. I can figure out the functionalities of an innovative CRM software that can help people prospect, and be sold worldwide. I can read a pile of computer books that’s 2 feet tall and teach myself programming in a few months. In the Stackoverflow community of 8 million programmers worldwide I’m in the top 2% in terms of reputation. I can spend 7 years writing the equivalent of book of about 10 thousand pages in C# and javascript code to build the goyaPhone, I can do those kinds of thing, but if someone were to come along and steal my work, I wouldn’t fight back right. If I had handled this situation right away, I think any of the IP lawyers I talked to would have had a field day settling it upfront. I had my software and without the Close.io problem I would have built the goyaPhone in much less time, raised money again and today my life would be pretty cool. I could be in a situation when I’d probably be making over a million Euros a year but I claim that my intellectual property was probably fraudulently stolen from me, and I’ve been going through a living hell for the last 5 years. If my suspicions come to be proven, it’s like having had your career stolen.
Now the cynics are going to ask: "well Sylvain, you’ve had the intellectual property, what did you do with it?" The reality is that it takes money to build a business. I think the reason most startups fail is that they don’t build products people need: that’s how valuable intellectual property is. But then, once you have it, you need capital. I applied to Startup Chile with the hope of a 40K grant and to build my business from there. It was a new program startup program with plenty of press coverage. I had a compelling story of an ex-salesperson turned into a self-taught programmer and it would have attracted attention to my project, and I think there I would have probably found co-founders and investors, built my software into a successful business and today have a pretty nice life. But I claim that the reason I didn’t go to Chile is not that my application wasn’t good but rather because some people interfered with the natural process. I think that the judges who saw my video pitch, probably thought I’d never finish and launch my software.
So then I came to France, a country I had left long before and where I never had any professional experience in the business world. I was genuinely hopeful when I came back because France is somewhat idealized in the US. However, I’ve been hugely disappointed by its culture in terms of the entrepreneurial spirit: I wasn’t able to raise a penny, despite numerous efforts. I asked over 50 top business angels in Alsace, several public institutions, three incubators in Paris and one in Strasbourg and have always been denied. Almost everyone in the world has heard of Silicon Valley startups but, apart from startup experts, I doubt anyone in San Francisco, Santiago, Shanghai or Mumbai could name a single French tech startup. Cultural collectivism works great to create collective ventures such as a public healthcare system, a public education system, a rail network and such, but for startups, what empirically seems to work, is American individualism. If my suspicions come to be proven, it would mean that it’d be possible to get your intellectual property stolen in Silicon Valley, financed by the most renowned angel investor and venture capital firms, watch someone build a career with it: well good luck getting it financed in France. I think the reason most people on the other side of the world have never heard of a French startup is that entrepreneurship is largely subsidized and that has the undesirable side effect of favoring small tech projects instead of large-scale tech startups like in the US. There are a few large internet companies in France, but in order for someone in the general public to name even just one, there needs to be an ecosystem of thousands of large-scale companies, and for that, you need a culture that enables large-scale startups. And then of course, the results you can accomplish with 25 million dollars aren’t fairly comparable to what you can do when you have a few hundred Euros a month, even if the intellectual property is essentially the same. I taught myself programming and wrote the software, I did what I could do without the money, not to mention the stress I’m going through. I'm a workaholic: I've been working almost every single day for 7 years building the goyaPhone. I did the work of entire company as a single-founder, not out of choice but out of necessity.
If in February 2008 someone had alleged that Bernie Madoff was a fraud, no one would have believed it. But in December of that year, he was quoted as saying his asset management company was just "one big lie", and his fraud was resolved. Frauds go through a cycle: committed, operated, discovered, suspected, alleged, investigated and ultimately resolved. At the moment, everyone is innocent but there are facts that show that the intellectual property of Close.io was probably lifted from my Startup Chile application and software prototype. To protect myself from defamation, I want to state explicitly that I’m not claiming that this actually happened, but I’m claiming that, based on fact, I think this probably happened, and for this reason, and as a very last resort, I’m asking the Senate of the United States to open an investigation to determine what happened at YouNoodle, YCombinator and Close.io.
John Kennedy said that "The rights of every man are diminished when the rights of one man are threatened" because an injustice invites more injustice. Someone deprived of their intellectual property is ultimately deprived of their career. Intellectual property crimes don’t directly affect everyone but if your son, daughter, brother, great-grandson or neighbor had their trade secret and their career stolen, you wouldn’t think it’s fair. If someone cheats on their resume, what happens? Luke Wroblewski, a prominent technologist, once tweeted: "the hard part of building new products: you see it (in your head) before anyone else can". Hypothetically, if a startup incubator and startup founders were to cheat by stealing trade secrets that represented a lifetime of work, should the pretenders be praised for having succeeded at cheating by potentially having committed white-collar crimes? We’re at the beginning of the technology age and if my suspicions come to be proven, the dogma that no one steals startup ideas will be forever resolved. I think the only way for this dogma to be resolved is for something like I’m claiming to happen to someone like me because otherwise, such dispute would have probably been settled in confidence, and no one would have heard of it. If some think of turning a blind eye to what could be the biggest intellectual property crime in Silicon Valley, then I think the soul of the US justice system is in peril. The biggest injustices are always committed by people in power, and under cover of the law. The Holocaust: law enforcement carrying out lawful orders, but it was not fair, it was an injustice that was fought against and resolved. Sometimes, you have to hope on the goodwill of strangers across the world and so now, my last hope is that the lawmakers of the United States of America will see through the fog and launch an investigation and find out what happened with my intellectual property at YouNoodle, and how come it’s so similar to that of Close.io. It could be that an investigation will uncover a possible connection between my Startup Chile application and the pivots of the Close.io founder, and, if proven, it could be just an isolated incident, or it could also be that YouNoodle receives the intellectual property of startup incubators and entrepreneurs from around the world, and then recycles the nuggets into YCombinator startups. My suspicions are based on facts and there aren’t two sides to the truth, there’s just the truth. This is not a gun crime, this is not a sex crime, this is not a drug crime; this is about a plausible intellectual property cybercrime. I remember that the first words of English I learned were the Pledge of Allegiance, and it ends with "Liberty and Justice for all".
Facts and YouTube videos
Notarized Startup Chile Application - October 2011 Letter sent to the Senate, with receipt confirmations - 2/22/2018 My GoyaTelemarketing Prototype for Startup Chile - October 2011 The Close.io Demo February 2013 Interview about the Origin of Close.io - a February 2013 Interview about the Origin of Close.io - b October 2013 Interview about the Origin of Close.io March 2014 Interview about the Origin of Close.io - a March 2014 Interview about the Origin of Close.io - b The Secret That Makes Y Combinator The Most Successful Startup Hub Of The World - a The Secret That Makes Y Combinator The Most Successful Startup Hub Of The World - b Knowing Narcissism. Crucial Information about Narcissistic Personality Disorder. Sales motivation quote: Honesty is a very expensive gift, don't ... Sales motivation quote: Every shortcut has a price usually greater than the reward. - Bryant McGill How to stop sales reps from stealing from your startup How to make the transition from services to software Why creativity kills sales scalability (and how to fix it) Sales motivation quote: You may not realize it when it happens... The most important lesson I ever learned in sales by @steli from Close.io The fastest way to getting smart is looking stupid Sell It, Baby! - Close.io CEO On Startup Sales - Pioneers Festival 2015 Sales motivation quote_ You are remembered for the rules you break. - Douglas MacArthur" Sales motivation quote: To be great is to be misunderstood. - Ralph Waldo Emerson Sales motivation quote: There are no shortcuts to any place worth going. - Beverly Sills Sales motivation quote: The third time you say a thing it sounds like a lie - Harrison Ford Sales motivation quote: The struggle you're in today is developing the strength you ... Sales motivation quote: The meaning of life is to find your gift... Sales motivation quote_ Sometimes the grass looks greener on the other side ... Sales motivation quote: Saints are sinners who kept on going. - Robert Louis Stevenson Sales motivation quote: Pain is temporary. Being a bitch that quits is forever. - Ed Latimore Sales motivation quote: Never let a good crisis go to waste. - Winston Churchill Sales motivation quote: Losers quit when they're tired. Winners quit when they've won. Sales motivation quote: Leadership is doing what is right when ... Sales motivation quote_ It's easy to do anything in victory. It is in ... Sales motivation quote_ It is remarkable how much long-term advantage we have gotten by ... Sales motivation quote_ I'm not a product of my circumstances. I am a product of my decisions ... Sales motivation quote_ If you want something in life, take it! Sales motivation quote: If you ever find that you're the most talented person... Sales motivation quote_ If you are filled with pride, then you will have... Sales motivation quote_ I attribute my success to this - I never ... Sales motivation quote_ I am who I am today because... Sales motivation quote: Don’t try to be a man of success, try to be a man of value. Sales motivation quote: Amateurs sit and wait for inspiration... Sales motivation quote: A champion pays an extra price to be better than anyone else. – Bear Bryant Sale motivation quote: Everyone has a plan 'till they get punched in the mouth. - Mike Tyson Pick your poison: Why winning entrepreneurs make hard choices NYC Enterprise Sales Forum: Fireside Chat with Steli Efti by @Steli from Close.io Keep it real: Authenticity in sales How to close a deal: Ask early, ask often, and embrace the no Build A Lean Mean Sales Machine With Steli Efti - Teaser Bye Bye Bye by @Steli from Close.io
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