Update: This article’s previous headline stated that Votem had closed and that all employees had been fired. CEO Pete Martin told Scene in an email that while the company had “kicked off a restructuring and recapitalization” plan on Friday that included “major layoffs,” Votem is still in operation and actively supporting current customers. Scene can not verify that and sources say that is not the case.
Original story: One of Cleveland’s largest blockchain start-ups abruptly closed last week due to a lack of funding. Employees at Votem, a company making innovations in online voting platforms, did not receive their most recent paychecks and were told on Friday that everyone was fired, effective immediately.
CEO Pete Martin told employees in an internal email that their jobs might not be permanently gone — he’s attempting to raise additional money — but word from (former) employees is that there’s not much confidence he will.
In late 2018, Votem acquired the California-based online voting company Everyone Counts. The roughly fifty employees based in California and around the world lost their jobs Friday as well. Cleveland’s ~20 employees are based in Tower City’s Start Mart, home of Flash Starts LLC, the early-stage start-up accelerator.
Votem had looked to be picking up momentum in the blockchain-voting space. Martin boasted of the company’s “blue-chip” public and private sector clients, including the United Nations and the Rock & Roll Hall of Fame. And in 2017, Votem processed nearly 1.9 million votes as part of the Rock Hall’s fan voting for that year’s inductions. At the time, it was considered the largest successful application of a blockchain voting platform.
“Votem authenticated each voter’s identity, provided a chain of custody, and proved itself fast, secure, auditable, and convenient,” wrote Alex Tapscott, who studied the Rock Hall voting process for the Blockchain Research Institute.
The company was also the first in Ohio to attempt an initial coin offering (ICO), the crypto version of an initial public offering. Pete Martin told Crain’s that despite the unregulated and opportunistic nature of ICOs, he was “as compliant as anyone could possibly be.” He said that by 2025, Votem’s goal was to have logged 1 billion votes in elections internationally.
Bernie Moreno, the local auto dealer and Blockland creator, is a small investor in the company. He said he owns less than a five-percent stake, and that Votem “hit a cash crunch that they were unable to get out of.” He characterized crunches of this sort as being typical for start-up companies.
“It’s very unfortunate,” Moreno told Scene. “They have a great business model that I believe can help restore confidence in voting … and save governments much-needed money.”
One local entrepreneur who preferred to remain anonymous because of their connections with Votem told Scene that the company’s fate was “exactly what [they] expected,” and that it was a bad look for both Cleveland and the Blockland initiative.
They admitted that while local entrepreneurs sympathize with the employees losing their jobs, many of them are probably greeting the Votem news with pleasure — “What’s the German word? Schadenfreude?” — because it validates many of their doubts and warnings about the hype over Blockland and blockchain start-ups generally.
This article appears in Feb 13-19, 2019.
Just like with virtually all city and county salaries, Im sure everyone was earning a six-figure salary!!! I guess its no wonder they went bust, since the taxpayers arent forking over their massive salaries!!!
Reminder that we’re talking about an extremely painful situation for the founders & team. These are people who are having one of the worst days of their lives.
Lets celebrate the fact that they tried & successfully made a dent, even if it was a struggle to find sustainability. They deserve praise, not derision.
They barely tried and didnt even come close to making a dent. Total incompetence from the leadership team and Pete Martin particular. I hope anybody thinks twice before doing business with him. He is neither competent nor, in my opinion, honest. Ex-Votem engineer
I would not normally comment on such a thing, but the correction that Pete Martin provided is inaccurate. On Friday, he explicitly laid off all Votem employees. This is documented. Unless he re-hired people over the weekend, Votem has no employees. Also, he failed to make payroll and has stiffed all of his former employees of their paychecks.
Correction to the correction for this article. Currently there are 0 employees at Votem besides Pete Martin himself. Therefore, there is no way any current customer is being supported actively. Perhaps there is a plan in place to bring on support staff but as of this moment there is no one at the wheel. Crash and burn is imminent.
Pete is a great entrepreneur and failures are part of the game. NO ONE should be quick to judge him or his business model or business acumen.
Pete is a failed entrepreneur. He has no employees and can’t even pay the people he fired their last paychecks. Go ahead and follow him off a cliff, if you want.
The original article had it correctly listed. All Votem employees were laid-off on Friday under the explicit instruction that, “you are not to return to work”. The correction is completely false. No clients are currently capable of being supported as there are no active employees save Pete Martin. Additionally, all employees that were laid-off on Friday were never paid for all work conducted during the Feb 1-15 pay period, despite assurances from Pete Martin to the company the week prior that he had six months of funding in the bank. Please retract the correction to the article until Pete Martin or the Votem board can provide actual evidence that the company is in business and that services to be provided to active and upcoming customers are not in any danger.
I’m also curious as to how Pete is currently servicing customers. To my knowledge, he does not actually know how to write code, deploy software systems, maintain IT infrastructure, and do the things necessary to support enterprise clients. Maybe he found somebody on Craigslist over the weekend?
I would wager that no engineer in this industry with any experience would ever work for Pete martin, let alone all the other necessary support (sales, marketing, operations). He lasted about 4 months in this industry, crashed, and burned everything.
Nowadays, a huckster in a designer suit can proudly claim to be an entrepreneur.