The Mike Kennedy Business Model

Scott Schreiber was one of many victims of the Mike Kennedy Business Model.

Mike had several sites and services that stemmed from an idea, either his own or that of somebody else, and he employed the same business model in most of them.

Scott outlines that for us…

There is a very clear pattern of how things progress in one of these projects, and almost anyone involved in one would have the same story.

A few years ago, I was looking for a Subaru Baja Turbo, and they have been out of production since 2006 and are not easy to find, so that meant dealing with the used car market.  I found a clean one at a dealership in Manassas and went to look it over. It was one of those buy here pay here kind of places but the truck was clean so I wrote them a check and left with it. While I was there I could not help but feel like I was on the set of some reality show, things felt scripted and contrived as if the employees were playing roles and working from a script.
I posted about this on a car forum that I am on and someone responded that I had seen a “system store” in action. As it turns out there are consultants that will come to your dealership and teach you how to process customers to get the highest number of sales with the least effort, and there is a flow chart that customers are passed along, resulting in getting them into a car or out of the door very quickly. I think that Mike has developed a system store method for utilizing talent for turning his dreams into reality.

  • Phase 1 is that he has an idea for an entrepreneurial venture, but only that, not the means or methods to make it into a real thing.
  • Phase 2 is finding the people that can, and offering them future value in the form of stock or other benefit, such as one company paying back the other. There is a lot of “WE” in this phase, you’re damn near partners and it is the two of you 51% and 49% all the way baby. The “WE” is also you working while he is learning what you know and then popping off for a wine tasting while you get the work done.
  • Phase 3 is looking for your replacement while you’re still involved, that person is given the same deal and story and never told about you if at all possible. If needed, new promises of future profits are created, “ran out of stock to sell so I created a new company” then you’re off the project. Maybe you just stop getting calls, maybe you’re called “hard to work with” or maybe the company is dissolved, but whatever method it is, your promises of future compensation are up for re-interpretation.
  • Phase 4 is denial and diminishing. Any negative aspects of the project are attributed to you while your role is continually downplayed: “Yeah he wrote a few articles but wasn’t really a part of it” or “He just made a few phone calls but wasn’t really a part of it” etc.
  • Controlling the narrative. Big time issues here, and this is not the Mike I knew. I recall one time we made up a poster to promote Retro Gaming Roundup at Expos, and part of it was quotes from our iTunes reviews. Of course we put in some of the best positives but we also had a crop of the negative reviews, just to be cheeky. One of my favourites is “There are so few retro gaming podcasts out there, it’s a shame this is one of the biggest.”
    We have never deleted posts or kicked people off our forums or Facebook, this is all new behavior, but the cause and effect is apparent. What I am seeing is a North Korea type farcical presentation of legitimacy, so absurd and easily seen through, but clearly crafted to be presented to crowdfunding as “Look we are real, have a real prototype, and have an adoring fan following” hoping that they don’t look at anything other than those sources.
  • Lying. I can only factually tell you what I dealt with. When he came up with the idea for Retro Magazine, I had recently bought part of GameGavel, which, with me being in the denial and diminishing phase he has referred to me as a “small minority shareholder”/ also known as the only one of his friends who gave him money, and I asked him if this was a separate venture or part of GameGavel and he affirmed that it was part of GameGavel so I said “Ok.”
    When he was launching it he utilized the Retro Gaming Roundup show and its media outlets heavily, on a daily basis and there was a lot of promising about how the show was going to be integrated and see advertising and representation, but when the first issue came we were nowhere to be found other than in a top ten listing. UKMike and I called him up and asked where was everything we were promised. At first it was a “Yeah you know we really had to rush to put this together and maybe in the future …..” but UKMike and I pressed him on why he had everything else done, and pointed out that we could have prepared those things but were never asked. Finally we got the email where we were addressed in a very cold sterile and stiff manner and were told that magazines simply did not do those sorts of things and that’s the way it was.
    When he had the idea for the console I asked him a similar question, is this studio (which is what it was at the time, a studio to be followed by a console by that studio) a new business or part of GameGavel/Retro and he affirmed that it was part of GameGavel/Retro and as I recall the phrase was something like “Yeah, it’s got the RETRO logo stamped right on the front of it” and I said “Ok” and this is what I believed right up until the Indiegogo of the Retro VGS.
    I stood to make money on this system if it succeeded, at that time I was still unaware of the new company that had been created about a month before the Indiegogo and the RETRO VGS assets transferred into that. Speaking for myself and two other GameGavel/Retro shareholders we were never told about that. When we found out and confronted him about it the response was absurd. He claimed that it was always going to be a separate venture but that GameGavel would benefit at arms-length by free subscriptions to the magazine and such.”

 

You can read all about it in the book Smoke And Mirrors of course.
In the meantime, check out our series of Monday Memes and Thursday Quotes.