0/ This is the story of the questionable but fastest growing tech startup in my small home town in Canada.

1/ My first startup was based in my hometown in Ontario, a friendly and small university city best known for its veterinary and agricultural departments.

In the neighbourhood, rumours started developing about another local startup that was growing fast.

2/ They went from zero to 300 employees in a matter of months. The founder had a special heated garage built in the office for his Lamborghini.

What did all these workers do?

I wanted to find out. Their webpage said nothing.

3/ So I called the phone number on the contact us page and asked if I could employ their services. The receptionist wouldn't help me.

4/ Then, all of a sudden there was news that the company had raised the largest round of venture investment in North America!! This was back in 2007 and they raised more than $160M as a minority investment. Massive. And still... no one could tell me what they did.

5/ A new CEO was brought in. The old CEO was described as "too quirky." But based on the stories I've heard, that was putting it lightly. His management team would hide him from investors because he would always come with some new random idea.

6/ They were making more than $100M a year in revenue, growing insanely fast. They didn't know where to put all the profit.

But still no one could tell me what they did.

7/ Years later I heard a talk from the CEO on their downfall. Which, surprisingly, was faster than their rise.

In the talk he said that weeks after the big investment, one night before bed, he checked his phone to see the company revenue dashboard.

8/ On the chart, the line broke where it went from 100M in revenue to zero over a 3 minute period.



He called IT to let them know that the graph was broken.

They told him: nope, the graph works fine.

9/ They actually went from 100M to zero in 3 minutes...

Gulp!

The following morning, he had to explain what happened to his new investors.

Fun!

10/ So, the story goes, the company was building an army of staff who were building fake landing pages to funnel traffic from one search engine to another.

11/ Every day, millions of people across the globe would search for a term, hit one of their content pages, and then click on ads. Arbitrage.

This is the story of how, at one point in time, 30% of the spam webpages on the internet came from my small hometown.

12/ I once asked their CFO for advice on how to manage payments at my startup and he said "uh, our team just collects monthly cheques from one search engine that paid us 100M per year. We pay another search engine monthly to get the traffic."

13/ Well when this company announced that they raised money, the public found out about the business, and at the same time, found out that a large search engine we all know was allowing this kind of content because it made them ad revenue.

Lots of it.

14/ Facing public pressure, the large search engine had to flip the switch to turn off the traffic. All at once.

As a result, this one company in Ontario lost ALL their revenue.

15/ The original CEO was still very very rich. Had a place in Bahamas. He literally had a box seat in every sports stadium in the US (I got invited once!). All his nieces and nephews were given access to a trust fund so they could pay for any classes or education for life.

16/ Deep within him, he had a belief that he could do anything if he set his mind to it. Who could tell him otherwise?

One day, he decided (at age 60) that he would become a professional ultimate fighter. His family begged him but he couldn't be dissuaded.

He trained for months and months under the world's greatest ultimate fighters.

Suffering brain damage, he almost died minutes after his first real match. :(

17/ But one part of the story that is not often told is that the old company that went bust was rebranded. And it kept trying to do the same thing as before. At its second peak, it was once again doing millions of dollars in revenue per year.

18/ They even discussed acquiring my small ecommerce company, telling me that they wanted to buy some businesses with more legitimate revenue so that it didn't look like all they did was spam.

19/ So I asked the CEO: waitasecond, I thought you were shut down by one of the world's largest search and ad companies. How are you still allowed to do the thing you used to do?

20/ He told me that one year, the big search company was going to miss a quarterly revenue target, so they called up his company and said: "go ahead and start doing the old spammy business again, so we can sell more ads".

21/ He described this fictional dial that big search companies had where they can increase spam and increase profit, but they have to do it carefully so people don't protest too much.

22/ He asked me not to share the last part :) But again that was many years ago and I don't think anyone cares anymore.