Disclaimer: This is a personal account of a series of events I was directly involved in. This is merely my perspective. Any third party accounts that would like to argue otherwise are free to say whatever they want and I won’t argue with them because I simply don’t care. This is not an attempt at Internet libel as I am merely relating my own experience as I remember it. I’ve changed most of the relevant names to protect myself from litigation but would really like to expose this guy and his wife for what they really are.

Introduction

A very personal story of mine has been brewing in my head for a long time. I have written, deleted, rewritten, and re-deleted it many times trying to find the best way to piece it together in my mind, and on paper. I have fought for closure and peace of mind for over 7 months. I finally decided just to lay it out there whether or not it makes sense.

I started an iPhone app company with my friend and room mate; and it was manipulated, stolen, and destroyed by one of the best con men I have ever met.

My room mate, Ryan (who worked as an iPhone game developer at the time), had a great idea to make OpenGLES based yoga/fitness applications. Because yoga is something we practiced, it seemed only natural to couple this with our love for animation, graphics, and programming. He put together a working prototype and we went out and got the license and development tools necessary to begin production.

Ryan had been going to a Mind-Body fitness class for a couple of months that was run by a knowledgeable, charismatic guy who had been purportedly practicing meditation, qigong, and martial arts for his entire life. This dude even got his black belt from a man trained by Chuck Norris (I can’t prove this). Ryan pointed out that using his name/reputation in the field as well as his guidance for a cut of the revenue could really help boost sales and increase our legitimacy.

Enter “Tanner” and the Zen Club

Ryan brought me to Tanner’s (his operating alias was “Sensei”) Dojo, a small gym tucked away in the wealthy suburbs of Austin, Texas. It was a rented office of about 600-700 square feet with weights, bands, punching bags, mats, mirrors, etc. As I entered I could tell it was a martial arts school, with shoes all sprawled out by the door and a sign that said “Leave your shoes, and your ego, at the door.” I tried to be on my least-arrogant behavior knowing the environment that I just walked in to.

Then I saw him. Tanner. I could tell it was him because he walked up to the front desk like he owned the place. He had a perfectly shaven flavor savor and well modeled, bowl cut with West Hollywood frosted tips. My immediate visceral reaction was “what a douche.” But remembering the sign at the door, and that we were soon going to be working with him, I set my natural conceptions aside.

After his class ended, Ryan, Tanner and I went into the adjacent office that was not leased at the moment. I later learned that Tanner had talked the property owner into letting him “squat” there (his words, not mine) so he could have privacy while classes were going on next door.

And let me tell you, this guy blew me away. He was 20 years older than both me and Ryan, but I felt like he was right there. There was no distance, no generation gap. He said all the right things. He was a mentor, friend, and brother all at the same time. I had simply never met anyone like him.

I felt like we were the luckiest guys in the world.

As we talked we discussed what type of applications we wanted to make. We showed him our portfolios, told him about our backgrounds, what we were capable of, and what we wanted from him. He was all for it. He even wanted to be a partner in our company to help us grow and watch us succeed.

One of the things Tanner stressed the most at the beginning (and this is important), was that our applications should be designed to help people first and foremost. If we made some quick cash in the process, more the better, but it was not our primary motive. (This was also during the time iFart’s success was sprayed all over the headlines of every tech outlet on the Internet, January 2009).

He related a story to us about an old mentor of his that wasn’t practicing what he preached, and it really disappointed him. He finally had to confront his mentor and ended up leaving the school. Since then, Tanner said he has been practicing contributing to society for the good of all those involved. This was right around the time the scope of the credit default swap scandal and bailouts were in full swing, so to meet someone so genuinely good was both surprising and refreshing.

Hook set, the Rabbit hole begins

Ryan and I were actively developing our Satori Yoga application. Tanner had pulled a favor from one of his students who was a professional photographer to get Tanner’s wife, Samantha, in the yoga poses we needed using a high quality CLR camera. He was doing a photo shoot for his Zen Club clothing line, and brought us in after to do our iPhone shoot. He was pulling out all the stops. He let us use his hot tub, invited us to fancy dions” – truly involving us in his world, treating us like equals, and had even called Ryan and I geniuses to the lady at the DBA office when we were reserving our business name.

The three of us would go disc golfing, drink beers together, and go to the driving range. We were like three peas in a pod. It felt so strange, yet so right that we could relate to someone significantly older than us. It must be the spirituality, the meditation, the mindset – I thought to myself. I realized that I wanted to be just as tuned in as he was. Just as good. Just as spiritual. Good things would come my way.

Sometime during this period, I joined Zen Club. It was the mind-body fitness class Ryan had met Tanner through. Its a mix of meditation, interval training, weight training, and stretching. (In hindsight, I believe it to be no more than an overpriced ($150 a month) repetitive work out with trite spiritual messages designed to make you feel good about yourself.) You read that right, we were bringing a revenue opportunity to our business partner, and paying him $150 a month for a guided gym membership (and Ryan even ended up paying Tanner a full $40 for his meditation DVD series). But I’m getting ahead of myself.

The First Sign of Trouble, and the Smooth Talking Begins

We would constantly have meetings with Tanner. He would call them probably 2 or 3 times a week. Despite the fact it was originally Ryan’s idea, and the two of us were doing most of the work, it seemed as though Tanner was running the show somehow. Ryan and I were working as hard as we could to get all of the graphics and bootstrapping done so we could really hit the ground running. Within 3 weeks, we had created an entire OpenGL framework that would really allow us to harness the power of the iPhone in a way that most non-game application developers didn’t bother with. Tanner’s third, non-developer eye helped us create something a little more polished as he wasn’t married to the code and graphics like Ryan and I were.

During one of the many meetings the three of us had, Tanner began talking about revenue splits (way before we even finished the Yoga application). Because the IP “technically” belonged to Zen Club, the company would get its own share.

Wait. Wasn’t he already getting a cut because he was a partner? Wouldn’t giving Zen Club a cut be effectively paying him twice, despite the fact he doesn’t even know how to write code? Did he think I was stupid? This began to worry me, especially since we didn’t even have a contract in place. I knew this was an amateur mistake (even at the time), but because I felt like I could trust him completely, I thought I was just being paranoid. The entire business was supposed to be a “spiritual revolution of goodness in the world”, why would he screw me over?

I came to him open and honest with my concerns in an important meeting late one night at my and Ryan’s house. If we were going into business together we needed all emotions out on the table. I told Tanner I didn’t think he was really pulling for this company. I told him I felt like he wanted to maximize his profits by taking a partnership cut, and paying out to Zen Club, and that once revenue dried up and the iPhone App boom was over, the company would dissolve and he would take his profits and continue with his seemingly successful gym business.

He told me of course he was pulling for it, he was a partner and had already invested so much time and energy into it (and even some money – he paid $300 for a manual on how to make money on Twitter and gave it to me). He told me I was living in fear, I didn’t know how to recognize success. That I could trust him. Ryan wasn’t much help – he had known Tanner for 4 or so months before I ever met him and was already completely convinced by his charisma. This left it 2 against 1. Because I hadn’t invested any money into it beyond my iMac for development (which was mine), and programming was something I loved – I continued, worries quelled.

The Secret, The Master Teacher, And the iZenStudent Daily Meditations

For the uninitiated, there was a cult classic hit movie “The Secret,” that came out not to long ago. It was a self-help phenomenon. The basic tenet was that you attract everything that happens into your life, be it positive or negative, by your thoughts. The first time I watched the movie, my naive jaw hit the floor – “it was just so true” I convinced myself.

I could instantly recall where negative thought patterns manifested exactly what I was trying to avoid, and that positive visualization had brought me everything that was right in my life to fruition. It was the basis of all of the spiritual teachings I had been learning during my time at Tanner’s Zen Club. I truly was a spiritual maverick ready to make a difference in the world. I started positive visualization, created a vision board – nothing could freaking stop me from success as long as I was focused.

I was having severe back problems during this time, and because Tanner supposedly had a back injury he had healed with meditation and qi gong, he found this as a perfect opportunity to regain my trust after my previous skepticism about his intentions. Helping me with breathing, visualization, and actually even a little Active Resistance Training and massage (no, really) I felt just as close to him as I did before he tried siphoning money through our application revenue back into Zen Club. (In the end none of this helped and I ended up in back surgery, but that is a different story for a different day).

And then it happened. The law of attraction “worked”.

Through some business connections I am to this day not really clear on, we landed a phone call with Joe Ansaldi – master teacher from The Secret, proven business guru and multi-millionaire. And he was interested in working with us on our iPhone Applications. To cut a long process, long coding nights, long pitch planning sessions, web site creation, and meditation short – he was instantly interested and we were now using his endorsements and ideas to sell our iPhone Apps.

Joe. Freaking. Ansaldi.

Needless to say – we listened to Joe. The days of the Satori Yoga application were long gone. We were now working on a series of iPhone applications based on Joe Ansaldi’s Daily Meditations. We coined our name, iZenStudent, and were “on our way to making millions”.

Yet somewhere along the way, and I can’t exactly discern when, the dynamics of our triad partnership had changed. We started reporting to Tanner like he was a boss, not a guide. Ryan had been completely indoctrinated into Tanner’s world view and became an echo of his ideas and mantras. The Secret’s doctrine had the propensity to blame the victim. Ryan even tried to convince me that my herniated disc pain was actually in my head. This mentality made negotiating and brainstorming an absolute nightmare.

Meetings and business decisions were completely useless. Prudent business outlooks I offered along with the positive vibes of our “synergistic” style were ignored by both Tanner and Ryan as negative vibrations. In the end it always came down to Tanner’s ideas, parroted by Ryan, in direct opposition to me (even if my suggestions benefitted us as a whole). I had always been the voice of prudence during the operation – the least “spiritual” of the three (or at least that’s how I had been cornered to feel), some negative naysayer.

Knowing there was about to be the potential for some serious cash on the table, coupled with the working vote-count monopoly Tanner had acquired, I demanded that we get a contract set up, get some lawyers in on the deal, and get legit.

I also suggested that we get a helping hand from my girlfriend who had done business taxes and books before so we can keep everything straight. I wanted to start keeping track of expenses and logging hours. Tanner immediately shot that down saying “getting loved ones involved in business always ends up messy” (this becomes important later).

The Invisible Lawyer and the Boilerplate Contract

Upon demanding a contract, Tanner instantly offered a lawyer who owed him a favor in return for free classes, who was “the best partnership lawyer in Austin,” who could draw us up a contract at no cost. “Sweet!” I thought, considering I didn’t have the money for the consulting or the fees involved in drawing it all out.

I never saw the guy. Not even once. I couldn’t even find the “best partnership lawyer in Austin” on Google.

Weeks later, after endless questions and arguments about the stalling (all while Ryan and I spent late nights coding, neglecting life duties like cleaning the house, doing the dishes, and paying attention to my girlfriend), Tanner finally delivered a “contract” for us to sign.

Luckily for me, my girlfriend is a very intelligent tax consultant/accountant, with one of the best intellectual property expert witnesses in the country as a father. Needless to say, I had someone with my best interest in mind who could read legalese.

It was a completely boilerplate contract that anyone with access to the internet could have either downloaded or created using a service like LegalZoom. I sent the changes that were suggested by my girlfriend, who I trusted more than anyone else at this point, to Tanner for review. That was the last I heard of it.

By this point, my skepticism was mounting, but Tanner tried one more maneuver to get me sold. He informed Ryan and I that he was talking with Joe Ansaldi (which he had started doing more often without us) and he could possibly be interested in seed funding us – get us out of our day jobs to develop full time. We discussed it late one night in the abandoned office he was still squatting in, and we came up with a number. $250,000.

I went back to my girlfriends place the next night and did some numbers, comparing it to our current salaries, splitting it up three ways, taking away tax and operating costs, etc. I realized that walking away from my comfortable and rewarding corporate job on nothing less than a complete gamble was a waste of time. And financially dangerous.

Tanner tried to convince me I was living in fear. That I was not taking necessary risks for greatness.

What he failed to realize was that I knew if the runway ran out, I’d be left with no income and no job in a down market. He, on the other hand, would still have his Zen Club and an army of participants willing to pay $150 a month. The spiritual renegade was over – this was certainly not for the good of all those involved, as Tanner had preached and “practiced” every day of his life. He was trying to walk me off a cliff on a gamble that would screw me and Ryan if we failed, while leaving him down only a couple hundred bucks. “Oh well, thats business.”

It had become obvious to me that this was a low-overhead operation and if Tanner could get us to quit our jobs, our best bet would be to work as hard as we can on iZenStudent to make it successful. The iPhone millionaires kept showing up in the headlines, a lage incentive for Tanner to drive us – and really the only thing keeping us motivated despite the fact it had been 4 months and we weren’t any closer to a contract or a product.

This wasn’t even taking into account the countless articles of App Store submission nightmares and developers going unpaid for sold applications.

I Quit! And That’s When the Fun Begins

Tanner had kept me running for the carrot on the string long enough. We had a meeting a couple days later where I told Ryan and Tanner I was no longer interested in working on iZenStudent. Tanner was obviously working us like dogs, for free, at the expense of our own life balance, for his direct benefit. He didn’t seem upset. Rather, he was probably elated considering I was a complete thorn in his side ever since I became wise to him, despite the fact that Ryan was still working enthusiastically as if the cash had already arrived (which is what Tanner tried to teach us both to become successful – Step 2 of the law of attraction is to feel as though what you wish for has already arrived).

Within 2 weeks of quitting, the website I built from the ground up on the domain that Ryan purchased was moved to a similar (however less intuitive) domain that was under Tanner’s control. My iZenStudent e-mail and ftp accounts were deleted (along with all of the records within). Tanner named himself CEO of iZenStudent on the website without discussing it with Ryan at all, and got his wife, Samantha (remember her?), in as COO and creative director (whatever happened to leaving loved ones out of business?)

Ryan was one of my closest friends for 2 years, I felt as though I needed to warn him. Tanner always had a way with spinning his words, and Ryan was really good at believing him. I wrote Ryan a long, descriptive e-mail trying to outline everything Tanner had done up to this point – including, but not limited to, trying to double pay himself through Zen Club, going from a partner interested in helping people first and foremost to convincing us we were just steps away from millions of dollars, moving the website off a domain Ryan controlled, and naming himself CEO of the operation. His response was little more than a proverbial middle finger to our relationship. He trusted Tanner and his ability to lead “iZenStudent to the App Store stratosphere” over his best friend.

Defeated on that front, I wrote another long, descriptive e-mail to Tanner, telling him I was aware of everything he was doing. I told him I thought he was not practicing any of the spiritual tenets he preached, and was – very simply – a manipulative con man. What happened next?

First, I was banned from his online Zen Club community (I’ll let you speculate why).

Tanner then e-mailed Ryan, saying, that due to my behavior and “drama,” that iZenStudent was done. It was over. No more. He was just going to end the “millions of dollars everyone was going to make” because my e-mail hurt his feelings.

A day later Tanner contacted Ryan again – saying he would give Ryan one more chance at iZenStudent, if Ryan promised that I would no longer be a problem.

Here, Tanner created a lose-lose-win situation. First, it almost immediately destroyed any remants of the relationship I had with Ryan because Tanner painted a picture that I was the cause of iZenStudent’s near death experience. Two, it made Ryan’s compliance as a sign of complete loss of control of the company he originally founded. To add a cherry on top, it got me completely out of the way so he could continue to manipulate the situation without further interference.

Ryan could no longer afford to pay rent (due to the layoff) and had to move back in with his parents. I moved out and got my own apartment. The iZenStudent website that I created slowly morphed into a tacky quick-fix-for-all-your-problems promotional page, and I can only now vaguely recognize the products we were producing (minus some of my code and original artwork which is obviously there either pixel for pixel or in direct spirit thereof).

In The End

I recently met up with Ryan (now 6-7 months after that last altercation) to catch up now that the steam had settled. He related to me that the eventual contract that did end up getting inked gave Ryan a whopping 5% of the company for the 11 applications he made after I had left. Apparently, Joe Ansaldi said Ryan should be lucky to get even that (I believe this was probably due to how Tanner framed Ryan’s involvement – as just a developer). Tanner and Samantha cited in the contract over 10 thousand dollars of business expenses to fly to the west coast to meet with Joe Ansaldi, all the while staying at 5 star hotels and renting BMWs.

If Ryan really wanted to, he could take them to court over it. Hell. If I wanted to, I could take them all to court for my back wages. I have all of the digital proof sitting on this very laptop. In the end its not worth the effort and it would be too soon if I ever saw Tanner or his wife again.

To this day I simply can’t believe that someone out there exists who would con and manipulate people like this. I’ve definitely lost my innocence during the process. “Shit like this only happens in Hollywood”. Oh wait, that’s where Tanner is from.

Heres a small bulleted list of some of the things that happened throughout the 5 months I was working with Tanner and involved in the Zen Club that rubbed me the wrong way:

Tanner started a Sunday Meditation class, where you could sit on pillows and discuss meditation and go through guided lessons. The next week – you couldn’t use the pillows unless you bought them for $30.

He created a series of seminars – from foam rollers, to qi gong, martial arts, etc. that cost $40 to attend. These were things that were supposed to be offered as part of the overpriced Zen Club bootcamp ($150 a month). He heavily recruited Zen Club members during lessons and made me feel uncomfortable a number of times when I declined.

In fact – the entire Zen Club is kind of run like a cult. There is a definite in-out club mentality and if you were negative or somehow challenged Tanner’s lessons or views it would piss him off. Everyone wears the same black workout clothes, and while not required, I was questioned numerous times from his assistant as to where my black Zen Club shirt had gone when I failed to wear it.

For a guy who approaches life with a “contemporary zen” view, he and his wife drove a BMW 5 series and a Mercedes Benz. Samantha once related to me that she spent over $900 in a weekend putting potted plants in their back yard. The inside of their house looks like a Orienental Decor catalogue – pulling out all stops with large decorative pieces with absolutely no function.

I have witnessed, with full admittance by Samatha, that she was driving with a glass of wine. When Tanner showed up at a FedEx where we were meeting to terminate our DBA (after I quit), he got out of his car at 5pm in the middle of the week, and killed the end of his Corona Light.

Checking the property tax records reveals that Samantha (although an alias for the purpose of this article) isn’t even her real name. Tanner (also an alias for this article), isn’t his real legal name either.

Any internet search on either of the two will not turn up anything between 1994 to 2007. Using Samatha’s real name reveals her previous acting career (despite claiming being in a zen-like meditation community for 17 years -making it 1992-, where they gave up all possessions and were training not even to enjoy their food. That said, she did tell everyone she used to act but found it weird how I could never find any information about it).

Typing all of that stuff out, I feel almost stupid that I trusted this guy with my business for as long as I did. In reality, none of these little things clicked, none of the dots were connected until months later and only after I regained some emotional clarity on the subject.

Are they a con couple? I can’t really tell. Maybe they just got greedy amist the iPhone gold rush after they realized they had two talented developers under their control who were already working for free and without a contract. I could speculate for months (and I have).

I’m ready to put this thing to rest. Typing this out and organizing my thoughts has been largely theraputic for me. I hope it serves as a warning to anyone who is going into a business partnership to remember what they say is true – its worse than marriage. Hell, its like all of the work with none of the sex. And if you meet a complete stranger who is more than willing to help you make a bunch of money – they are probably trying to screw you. I guess even the “good” people in this world can turn out to be bold face liars.

Now there’s a concept.

Keep your businesses real, and stay safe.

Epilogue

There has been quite and interet response to this article so I’m going to clarify a couple of things, as well as draw up some clearer conclusions and lessons learned.

1. I never really thought that what we were doing was revolutionary. We were creating cool looking applications on a new device and that excited me. Once we had a reputable name that had the marketing acumen, I thought that we could push a lot of $0.99 units.

2. I continued on despite what looked like a bad deal out of loyalty to my friend. His arrogance wasn’t helping, I probably stayed too long, and in the future I will definitely pick my friends a little more carefully.



3. My fascination with “The Secret” was true and simple naivety. Had I had walked around the block a couple more times I would have realized that this was complete snake oil wrapped in a snappy, marketable message.

4. “Tanner’s” relationship with Ryan rotted after the poor handling of their eventual contract and his Dojo’s attendance has been suffering as it has apparently clearly affected his charismatic performance. I’ve been told he is in a mountain of personal and business debt. This is merely what I was told by a source I trust but take from it what you will.

5. I made a lot of dumb mistakes and wanted to “play business” like it was some game and that if I sat in my room and wrote code all day the mail man would deliver a pile of money to my doorstep. I was an ass hat and I’ve learned a great deal of humility since then.

6. It was emotional, and maybe I played that up a bit here. Its a personal story and its taken a long time to get over it. Simply knowing I’ve had people read my story is enough. It was my first true business endeavor outside the safety of a large corporate structure and I got burned.

7. The company is still operating, but still haven’t managed to get even one of their 12 applications onto the app store. They have since produced zero revenue, the seed money was probably a lie from Tanner, and there’s so many cuts in the pie these days that I’d be surprised if anyone made their investment back. (As of November 9, 2009).

8. A lot of people speculate that “con man” is probably inaccurate. And after reading a lot of perspectives via personal e-mail and comments on Hacker News. I’d say that’s a fair assessment. I didn’t protect myself and Ryan and I were simply taken advantage of. The story conveys my emotions about the issue, and how terrible it made me feel.

Half of me had wished I had posted for advice earlier on (I did eventually get the advice I needed from my girlfriends Dad), I get the feeling I would have been served up a large slice of reality pie. I’m doing my best not to walk around with my head so far up my own ass this time around, seeking professional advice where needed.

Thanks for taking the interest and time to read and respond to my story. Hopefully someone avoids making the same mistakes I did.



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This entry was posted on November 08th, 2009 and is filed under Business, Learned Lessons, Reflection, Spirituality, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or Trackback from your own site.



