After unsuccessfully trying to sell his startup Sxip Identity to Google or Microsoft, CEO Dick Hardt is now facing a lawsuit over the insolvency of his startup. Hardt is perhaps best known for his amusing slide show explaining his company’s Identity 2.0 system. It typically started with the slide at right asking, “Who is the Dick on your site?” Investors are now asking a similar question.
Hardt is not making funny slide presentations these days. According to a complaint from investors in Vancouver, where Sxip Identity is based, Hardt raised $370,000 as a bridge loan until he could sell the company. According to TechVibes, which covered this last week:
When Hardt’s attempts to sell Sxip Identity failed, he told the plaintiffs that Sxip Identity was insolvent and that their notes has [sic] little or no value. This is where things get messy. The plaintiffs allege that Hardt failed to disclose that there were two separate Sxip entities (Sxip Identity and Sxip Network – he is CEO and President of both) and that only Sxip Identity would be a party to the notes.
Sxip Identity is indeed insolvent with a March 2008 balance sheet indicating that they owed Sxip Networks $4.7 Million and Hardt personally $275K. Sxip Identity’s total assets at the time were just under $1 Million.
That’s a pretty slick move, Dick.
Identity is still a problem that needs to be solved. Unfortunately, Sxip won’t be solving it.
Just because someone can give a good pitch, does not mean they can build a real company. Below is Hardt giving his slide show pitch at eTech in 2006.
Update: After I put up this post, I spoke with Dick Hardt. His biggest issue seemed to be with my opinion that he failed to build a a real company. Fair enough. I suggested that he e-mail me a response, which is reproduced below:
Thanks for the followup call and the offer to post a response on the article. There are some corrections contained below on facts you state, as well as additional information that I think upon examination, may lead you to change your opinion. As for responding to the lawsuit, I have attached Sxip’s statement of defense so that your readers can see both sides of the story.
“Hardt is not making funny slide presentations these days.”
Incorrect. In the past month I gave a keynote presentations at the MySQL conference, an identity conference in New Zealand and a conference on identity management trends in Hamburg. I think the Identity 2.0 message is an important one to given. I also think my presentations are still funny. The deck is now over 1000 slides and people are laughing at the appropriate spots.
“Identity is still a problem that needs to be solved. Unfortunately, Sxip won’t be solving it.”
This is your opinion, but I don’t think it makes sense when you look at the facts. Sxip is working on solving the Identity 2.0 problem. We merged our efforts into the OpenID community a couple years ago, I sit on the board of the OpenID Foundation and am active in the community. OpenID looks to be a real contender for solving the Identity problem … at least that is what I read on TechCrunch.
Additionally, our Firefox add-on, Sxipper (available at http://sxipper.com) supports OpenID and helps users manage their passwords and fill in forms with the click of a button. Sxipper continues to be actively maintained and the user base is growing 5% per week. As the product matures, perhaps you will give it a review?
“Just because someone can give a good pitch, does not mean they can build a real company.”
From comment 33: “No, not too harsh. The company is bankrupt and on top of that there are allegations of self-dealing. If it had been a real business, Google or MSFT would have been more interested.”
The company is not bankrupt.
I have successfully built and sold companies (ActiveState the best known). We had a real business with Sxip Access with solid partnerships with SFDC and Google. We sold that business to Ping Identity. Google and MSFT look at lots of real businesses and don’t do an acquisition.
I stand corrected on Hardt’s presentation habits. As for Identity 2.0, Sxip and Hardt may be making important contributions to OpenID (I don’t dispute that), but laying claim to OpenID’s achievements for Sxip is a bit of a stretch. As for my comment referring to the company as bankrupt, that was a mistake due to my misunderstanding one of Hardt’s comments below (No. 26) referring to a “reorganization” of the company and also the fact that I was responding quickly from my Blackberry on a plane ready to take off. I should have said insolvent. His statement of defense to the lawsuit is embedded below the video.