In my previous post, "Former CEO of the Failed Microworkz Has Failed to Learn the Lesson of Truthfulness," I wrote about Richard Keith Latman and his new book, "The Good Fail: Entrepreneurial Lessons from the Rise and Fall of Microworkz." That post, written from my standpoint as a partner in QVerity, a company that provides training and consulting in deception detection and critical interviewing techniques, took the form of a behavioral analysis of my interview with Latman. My conclusion: If the interview was a test of Latman's truthfulness, he failed it miserably.
There's a lot more to the story than I was able to convey in my behavioral analysis, so a follow-up is in order. In the interest of convenience, here's the quick background I provided in my previous post:
Microworkz was a company that Latman founded in Seattle in the 1990s to sell low-cost PCs. Latman bit off way more than he could chew, and the company began taking orders and accepting payments for PCs it couldn't deliver. Microworkz died a very messy death in 1999, leaving a lot of extremely unhappy people who had paid for computers they never received. The Washington state attorney general's office filed a lawsuit against Latman, alleging deceptive business practices, and won a $1.5 million judgment against him. Latman filed for bankruptcy and never paid up. He was subsequently indicted by a grand jury for bankruptcy fraud, and a guilty plea got him house arrest and five years' probation, which ended last year. This March 2006 Seattle Times article provides more details.
Latman, who went by "Rick" when all of that bad stuff was happening, subsequently adopted the persona of "Keith Latman" as a means of putting the past behind him and reminding himself on a daily basis that he had become a new and improved version of himself. After interviewing him, I was reminded of the line from Shakespeare's "Romeo and Juliet": "A rose by any other name would smell as sweet." Only in this case, I concluded that a thorn by any other name is just as barbed.
Let's start with the fact that the press release for Latman's book states, "A good fail' is a failure that has a learning value greater than the offset collateral damage." I brought that statement up during my interview with Latman: "OK, but if I paid you for a computer that I never received, and I never got my money back, I'm delighted you learned something that you could use to start a new, successful business," I said. "But I'm the collateral damage, so those are pretty hollow words. What's your response to that?" Here's what he said:
Well, one, there isn't a person that you'll be able to source that has paid money and not received a computer. And if you can, that would be great, because I'd like to know who that is. We went through the list from the [Washington state] attorney general, which if you have read those articles, it was about a hundred people. I personally purchased computers for every person that we could find. So over the course of the last 10 years, the people who are "collateral damage," most of them-I'd say 99.9 percent of them-either received a refund from their credit card agency because they disputed their charges, or they received a PC. The people that actually have been left holding the bag, if you will, were people that bought Microworkz computers and didn't have a warranty. And for that, we certainly feel bad about it. I think that any business has a risk of failure, and I think that when you're trying to pioneer something, and you're trying to bring a computer to market that was at the time half to a third the price of the big guys, there was risk in that model. So I think 99.9 percent of the people who wanted something from Microworkz either got their money back or got a computer. But if your article can source a couple more, we'd be happy to get in contact with them.