Stayzilla case : The other side of this story ..

As per Jigsaw, Stayzilla owes Rs 1,56,32,992 to Jigsaw agency.

Yes, it’s sad to see that Stayzilla founder has been arrested and we totally condemn the way situation has turned out be (especially with those voodoo dolls and kids picture/family threat), there is the other side of the story and a few questions.

Stayzilla's Airport Ads
Stayzilla’s Airport Ads

The other side of Stayzilla another startup.
Jigsaw media agency has been executing Stayzilla’s airport ads (like the one you see below) since Stayzilla started its operations.
As per Jigsaw, Stayzilla owes Rs 1,56,32,992 to Jigsaw agency.
JigSaw's email regarding pending payment
JigSaw’s email regarding pending payment
Stayzilla's email regarding payment due date
Stayzilla’s email regarding payment due date
Stayzilla’s Sachit has no clear answer to the payment due date “when and how we are going to clear the payable”.

“These startups get funding, they spend carelessly, they live a hunky-dory life and keep our payments on hold, and then shut shop saying we don’t have money. People doing genuine business like us have to bear the brunt,”
“I AM NOT SCARED of their tantrums, my case is genuine and will fight it in the courts and I trust the courts.”, says Aditya CS, proprietor of Jig Saw Solution and Advertising / source : The News Minute.

Having said that, Aditya CS was openly asking people in Facebook’s Chennai shopping group about Voodoo dolls. Clearly, not an easy coincidence?

Stayzilla shutdown : Few questions

Stayzilla suddenly announced that it is rebooting operations and hasn’t refunded the  money to customers who booked from them (more here and here).
When you shutdown a company, the first thing investors should do is to clear off all the pending payment. Not sure whether it was done properly in this case.
Stayzilla founding team, going by the above conversations should have given a proper timeline for payment. The last thing you want to see is this becoming another ‘AskMe’.
This is the least I’d expect from investors and founders.
Of course, what has happened is UGLY. If everything boils down to ‘I know <X> in police / politics’, then don’t expect startups to thrive in this country; and is nothing but gundaraj (plus, can we be clear over civil vs criminal charges?)
But it’s also time for all of us to look within and see what sort of startup ecosystem are we really trying to build.
Image credit : 1, 2

  1. My friend had to face something similar in a land case. When they were going to win the case the other party filed a false FIR and got them arrested. The sad part is they let the judge and the Police officers involved get away with it. Ofcourse they fell at their feet and gave them excuses that they had not other option. But they just file a fake FIR for money.
    I think the only way to stop this for everyone who thinks they should support Yogi solely because of the fake cases should
    Because unless there is fear of consequences Cops and the judiciary will not cater to such fake cases.
    They know they are doing illegal stuff but they know they will get away with it by simply pleading helplessness with the victim after the the victim has got justice. They do this because in the process from the fake case being identified and shut down they have earned a couple of lakhs (in the case of my friend a crore, but thanks to Demonetization karma bit them back)
    This is very important if we want the landscape to change. More than anything go after the Judiciary and cops involved and any other govt officers.

  2. In India, a lot of business is done on “trust”. That’s how so many vendors sign up on big flashy, ecommerce websites and “trust” them that they will be paid their dues. It is the responsibility of all these startups to factor in all liabilities in their due course of operation. These are not flashy companies who survive and pay themselves big fat salaries piggybacking on funding. They make money through profits generated by their core business activity. If any founder thinks that a vendor will back off just because the client “thinks” there was a deficiency in services (which should be discussed at the time of service delivery, rather than at bill presenting). The voodoo dolls, etc are certainly totally unwelcome and should be thoroughly investigated from a criminal standpoint – it directly amounts to intimidation. But yes – don’t expect to owe money and be treated like a gentleman. Try to default on a measly credit card bill and you’ll see what I am talking about 🙂

  3. @Ashish sinha – why you are bothering about customer money? If you buy something and company shut downs then it is equal fault of the person who made the purchase. Plus if you thing vendor was right in asking for his own money, then why afraid of going to court. There are legal means for getting of what you deserve.
    Vendor’s hesitation for not going to court is the proof that there was something wrong from the vendor as well.

  4. Of course, what has happened is UGLY. If everything boils down to ‘I know in police / politics’, then don’t expect startups to thrive in this country; and is nothing but gundaraj (plus, can we be clear over civil vs criminal charges?)
    Say it the other way around, If people like stayzilla keep doing and repeating this things then may be a genuine startup with vibrant mind will not get funding because of the image and impression created by stayzilla in the startup funding system.

  5. Dude : that’s like jumping to a conclusion without knowing the entire story ! Read the entire piece pls – the co. did get a green signal from investors who did accounting due diligence before shutting down.

  6. Well Ashish is totally biased in this case. Please don’t try to play the victim card.
    In the name of “startup ecosystem” , you don’t get right to fail without paying your dues.
    Infact Investors should also face the music, as they also own the company. So when profits is yours, then dues also belongs to you.
    Ringing Bells CEO is also in jail for not paying their dues to vendor. Sahara chief is also in jail.
    You must go to jail, if you can’t pay your dues. Very simple.

  7. 🙂 Let me tell you this – we were the first ones to cover this and while I have been in touch with the entire volunteer team, my only attempt here is to ensure that govt intervenes (the case is murkier than what is known to the public). We need to ensure that no physical harm is done to Yogi and I think the volunteer team has ensured that.
    “THe other side” becomes important only for 1 reason -> the world won’t trust startups anymore if we treat vendors and employees like this. Given that negativity flows faster than anything – we do want to ensure that we ask the right questions. By asking these questions, I can only hope that next time a well funded startup shuts down, they ensure that they take care of pending payment (settle the case cleanly).

  8. @Ashish It was a truly rare and bold step and stand from your side to have made the first story reach out. It was amazing! Trust me. Sign of good times, sign of public awareness/uprise. We all read it and can easily make out he owed money. Of course, how would all this have happened otherwise? This “other side of the story” is totally not required. It looks like someone is trying to be politically correct. 🙂 Let’s leave it for the “politicians”. Trust me dude, all the facts we’re there LOUD and CLEAR in the first piece and kudos to you and your team for the amazing bold step and playing the true role of Media. I am your fan now and don’t let anyone tell you otherwise. Keep it up, my best wishes, always available to offer you help, do get in touch if you would like to have a good friendship or partnership for bigger things in life. Don’t give “other sides of the stories” like this. Ha ha You don’t need to, trust me, bro! In any case, hats off to you and NextBigWhat!!! You rock!!! I will tell you Next BIG What! BIGGER than you can imagine! Next BIG GOD! 😉 :* 😉 Keep watching and be in action! 🙂 Love you… & blessings from GOD. 😉 🙂

  9. Krishna : you didn’t even read the entire piece. Where did I say this was a correct thing to do? The truth is that Stayzilla did owe a LOT of money to the company (which wasn’t very clear in the earlier post and hence ‘the other side of the story’) but NO WAY acceptable for anyone to take law in their hands.
    Having said that, the shutdown of a company needs to take care of payment to vendors and importantly, customer cancellations should be refunded asap.

  10. So is Ashish Sinha trying to be politically correct by trying to put both sides of the story? C’mon dude! You are not a mouthpiece of people. Let’s get one thing V V CLEAR HERE! No one takes the law in their hands, not even the police can and there are legal repercussions for everyone, most of all the public “servants” who are nothing if they are stripped off their jobs, they can’t even earn a livelihood if thrown off their jobs. So let’s stop sucking and up and try to molly coddle everyone. Your previous post was LOUD AND CLEAR and no such nonsense can be tolerated from anyone, least of all government servants who are not scare of transgressing the law. Any civil dispute is meant to be taken to civil court, no matter what the amount 1,000 OR 1 Crore, and no one can throw objects on the other person, use filthy language to abuse someone (that too have the guts to do so on camera and even get away with it!!!). Police are only law enforcers and cannot create their own law or hold a court in their small police station premises acting as “dealers” or “justice dispensers”. Threats to harm, hurt, kill someone, disturb peace of mind of people, send threats to family etc… c’mon, is this India or it has turned goon land!!! Ashish, didn’t expect this kind of piece from you after shouting out on your forum that goons are after Stayzilla founders and they need our help. Be bit more bold and stay your ground! Root out this nonsense from this country and let’s take a STAND. No more taking BS and make sure everyone knows his or her place and his or her duty and the consequences of taking the law in his or her hands! Approach court, take help from media, don’t sit scared. It’s a fight to the END and a NOBLE END!

  11. I am an outsider so forgive any ignorance on my part as to the precise nature of local laws and business practices.
    When any company provides services to another, it should undertake a level of credit risk assessment. In the case of a startup, this is normally hard to do (due to the lack of trading history, it being loss making, and the nature of its funding – e.g. A company may raise $XXm in funding but this may be subject to milestones or other contractual measures which can result in the funds not being made available).
    As such the sensible approach is to only extend a level of credit you are willing to lose. If the startup succeeds, then you are pole position to benefit from a lucrative, fast growing account. If it fails, then you shouldn’t be disappointed but not surprised (because it happens a lot).
    Other tactics might include: asking for payment in advance (either of all or some of contract value), insist on escrow, seek personal guarantees from directors or investors, ask for personal character references and/or seek additional upside provisions (equity, exclusivity, etc)
    Dealing with a startup is part transaction, part leap of faith. The rewards can be significant, but so can the downsides.

  12. if one is going to report on a blog post that of course shows only the OP side of the story it is seems reasonable to show what the other party’s response is. @Ashish did this.
    This is a developing story. His opinion was quite mild. He didn’t endorse what Jigsaw said he just said based on what is public Stayzilla could have been better at communicating.
    point #4 is just weak. Since Stayzilla has been around longer than NBW then it must be believed and how dare NBW post any other person’s point of view?

  13. “If there was an issue with delivery, why wasn’t it raised earlier? Why do we have to wait to see a day like this?”
    And you know it was not raised earlier how?

  14. @Abhishek : There are 2 things here.
    1. By this piece, I am not saying that Yogi / Inasra is wrong. It’s a conflict between two parties and I have clearly stated that this can’t be handled the way it is handled now.
    Having said that, denying an amount like that by just saying ‘conditions not met’ may not be the best solution (but then, that’s upto the two companies).
    2. His quote is reproduced as-is. By reproducing his quote, it doesn’t mean we agree/disagree with him.
    The point here is to present the other side of the case with a CLEAR message that the goondaraj won’t and shouldn’t win – but having said that, investors and founders need to address the pending payment worries from vendors.
    If there was an issue with delivery, why wasn’t it raised earlier? Why do we have to wait to see a day like this?
    FYI : I have known Inasra since the time it was launched. Met yogi when Inasra’s site was full of bugs 🙂

  15. Hi Ashish,
    Sad to see such a half-hearted and un-researched story come from you. Let me try and put some facts here, minus the ‘opinions’ that you and the Jigsaw guy have put up as a ‘story’:
    1) The deficit payment – as was explicitly communicated – will not be paid. This was made clear before Stayzilla decided to shut ops. It wasn’t paid owing to lack in service levels (which any corporate would also do) and the agency was advised by the company to take the matter in court. Consider this: You don’t pay your company’s broadband bill. Instead of sending you a notice, they send you a picture of your child with a creepy doll. And tell you – in lucid detail – what they will do to your wife.
    2) There are more emails than the one share with you and published by you. The team actually discussed and communicated to Aditya that they won’t pay (the last 15%) owing to poor service levels. If only you’d bothered to ask Aditya to share that email.
    3) Aditya’s quote ““These startups get funding, they spend carelessly, they live a hunky-dory life and keep our payments on hold, and then shut shop saying we don’t have money. People doing genuine business like us have to bear the brunt,” couldn’t be farther from truth. If bearing the brunt means abusing man and wife, bribing cops to defer FIR and make fraudulent arrests, and threatening the family, then clearly he is at the receiving end. I just pray one of your vendors never ends up ‘receiving the brunt’ with your company. And about the hunky dory life, I repeat, the judgement is getting better of him, and you.
    4) About your closing comment “the kind of ecosystem we are building”, Ashish, Stayzilla (Inasra) has been around since 2005. Then neither NextBigWhat existed, nor the ‘system’ in the startup ecosystem. I wonder if a company chose to stay around, fight, pivot, turn down multi-million acquisition deals – all this for 12 years – to eventually take some money from a vendor and live happily ever after?
    I sincerely hope this article wasn’t written to piggyback on the trend. I have respect for the reporting and editorial practices of NBW. Sincerely hope you’d continue to uphold them, Ashish.

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