😤 Aaqua's founder lied to his 175 employees

Hey Founders,

Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.

Today’s issue is about debunking a crazy lie by Aaqua’s founder. Let’s get to it! 🚀

☠️ 1 Failed Startup: Aaqua

🚀 The Rise of Aaqua

Founded by Robert Bonnier in 2020, Aaqua was a social media platform centred around passion communities — free from the spammy nature and conflicts of interest plaguing existing platforms.

• The Problem — Most social media incumbents were spammy and inherently had a conflict of interest by monetising users’ data for profits via advertisements.

• The Solution — Aaqua only used users’ data to recommend relevant content based on user’s preferences and would never monetise their data by showing advertisements.

  • Besides, Aaqua focused on creating passion communities where users could share their updates, polls, and even do live-streaming events.

♻️ The core idea behind Aaqua was to build a "circular economy" where content and interactions would be self-generating, driven by users' genuine interests and passions rather than algorithms optimised for profit.

In short, Aaqua painted that social media giants (i.e. Facebook, TikTok) were like the bad guys for users, and Aaqua was the good guy — the revolutionary and utopian social media platform where it was all about passion communities.

Robert also claimed that tech giants like Apple and LVMH were "founding partners" of Aaqua, lending credibility to the startup's lofty aspirations (more on this later).

🏃🏻‍♂️‍➡️ Because of the grand vision, Aaqua attracted top talent from leading tech companies with the promise of generous salaries, extensive leave packages, and a lucrative "General Availability (GA) bonus" of up to 50% of their annual package upon the app's public launch.

🤑 The company's compensation was among the highest in the market, with managerial roles earning $8K to $9K per month and junior positions like community managers raking in $4.5K to $5.5K monthly.

At its peak, Aaqua had 175 employees. If we assume an average salary of $6,000 per headcount with 175 employees, Aaqua was burning $1M+ every month, and the app wasn’t even launched yet. Crazy, I know 😂

📉 The Fall of Aaqua

This was when the House of Cards started collapsing.

⚠️ The first red flag appeared

Despite the grand promises and substantial funding, Aaqua's app never saw the light of day.

The first cracks began to show when the app's launch was continually delayed, and the initially promised 75% GA bonus was reduced to 50%. After 2 years of building, Aaqua’s app never launched.

Employees grew increasingly sceptical of the company's ability to deliver on its ambitious goals.

‼️ More red flags

• Robert, the founder and CEO of Aaqua, had little online presence — which was weird for a CEO working in tech.

• One employee shared that Robert wasn’t very open to speaking about the company’s state of affairs.

  • Robert had a habit of withholding information until the last minute.

• Office rental issues — There was a time when Aaqua’s employees were evicted by their landlord from their luxe Regus offices in Asia Square over a rental payment dispute. 

• Late salary payments — Employees were paid later and later.

  • Salaries were late on 2 occasions and Aaqua said it was due to some bank holidays.

• Lack of leadership & accountability — Employees who questioned Robert’s decisions were fired on the spot.

• Salaries were frozen due to a legal dispute — Robert was being sued by one of his investors (Candy Ventures), resulting in a Worldwide Freezing Order (WFO) and that employees would not be paid for July 2022.

  • 🤯 Robert lied to Candy Ventures that Apple and LVMH were backing Aaqua, which was critical to Candy Ventures’s decision to invest.

• Lack of transparency — Radio silence from Aaqua’s management.

  • Robert didn’t join a company-wide call.

  • Instead, he was represented by a group of legal consultants for Aaqua. They just repeated what had happened and that they couldn’t reveal too much.

  • 😣 Anxiety levels were sky high, morale was low, and honest communication was non-existent.

In August 2022, suddenly Aaqua declared bankruptcy and couldn’t pay months of salaries owed to its employees. Everyone was retrenched immediately. Suddenly, 175 employees became jobless after years of hard work and broken promises.

🙏🏻 When a company overpromised and under-delivered, the company wouldn’t go far — and this is what happened to Aaqua. Besides, the lack of transparency and accountability of the leadership team lured 175 employees to join but eventually left them jobless with unfulfilled dreams and broken promises.

Want to learn more about Aaqua’s downfall?

• Another Tech Startup Fails: How AAQUA Did Its Singapore Employees Dirty

• A deep dive into Aaqua’s troubles

⚠️ 2 Mistakes

Mistake 1: Overpromising & under-delivering

🤦🏻‍♂️ Aaqua painted an ambitious vision, hired 175 employees, spent millions yet failed to deliver even a single product after 2 years.

Besides, the management’s direction kept changing and the app features kept pivoting, leading to disappointment and mistrust among employees.

Aaqua is a classic example of overpromising and under-delivering, which is one of the biggest red flags for a founder (Robert).

Mistake 2: Poor leadership & transparency

🤫 Robert’s lack of communication and transparency was a major red flag. For example, he withheld information until the last minute, avoided discussing the company's state of affairs, and failed to join company-wide calls when his employees needed him the most.

And guess what? Employees were left in the dark, and critical decisions were made without clear explanations. This lack of openness created anxiety and low morale among employees.

Even worse, Robert’s poor leadership was evident when employees who questioned Robert’s decisions were fired on the spot.

🧠 3 Lessons Learned

Lesson 1: Underpromise, over-deliver

It’s better to underpromise and over-deliver than the other way around.

Why? Because when you overpromise and under-deliver, trust is broken with your customers, employees and stakeholders. Without trust, there’s no business.

Most importantly, manage expectations with achievable milestones and be transparent about progress and setbacks.

Lesson 2: Foster open communication

🤝🏻 Cultivate a culture of transparency and open communication as it’s crucial for building trust and maintaining morale. Employees also need to feel informed and involved in the company’s journey.

The last thing you want to do as a founder is to hide the bad things and only show the good things.

Lesson 3: Sustainable financial management

🔥 Be mindful of your burn rate and ensure your financial practices are sustainable. Lavish spending without a product can quickly drain resources and lead to bankruptcy — which is what happened to Aaqua.

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That’s all for today

Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.

You can always write to me by simply replying to this newsletter and we can chat.

See you again next week.

- Admond

Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.