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- 🐙 From $5M to Scandal: The Fall of Octopus
🐙 From $5M to Scandal: The Fall of Octopus
How Octopus went from waste management to fraud and sexual harassment (the most dramatic public failure I've seen so far)
Admond Lee
August 25, 2024
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 co-created with Nelson who is the founder of GOOD Karma Club Newsletter and has been making waves in impact investing.
If you want to keep updated with top stories, resources, and opportunities in impact in Southeast Asia, his newsletter is for you. Join us here!
Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Octopus
⚠️ 2 Mistakes → Financial mismanagement & lack of transparency
🧠 3 Lessons Learned → Be open, not silent
🔗 The Runway Insights → How this startup got its first 15 customers
💰 Southeast Asia Funding Radar → Sleekflow secures $7M in Series A+ for global expansion
☠️ 1 Failed Startup: Octopus
🚀 The Rise of Octopus
🇮🇩 Octopus is a reverse-logistics startup in Indonesia that promised to revolutionise waste management. It was founded by Hamish Daud (CMO), a well-known Indonesian actor and TV presenter, along with his four friends (Mohammad Ichsan as CEO, Niko Adi Nugroho as CTO, Rizki Mardian as Head of Data & Analytics, and Dimas Ario as Chief People & Culture) in 2020.
The Problem — 🥫 The inefficiency of waste collection and the lack of incentives for waste collectors make waste management incredibly difficult in Indonesia.
Many waste collectors face poor working conditions and inadequate pay, which hinders effective waste management.
The Solution — ♻️ Octopus provides a solution that streamlines the waste collection process and offers better incentives for waste collectors, creating a more sustainable and profitable ecosystem.
🏭 For manufacturers — Brands and FMCG producers can track and collect their waste using Octopus’s real-time data dashboard, ensuring they don’t end up in landfills (TPA).
🧑🏻🏭 For waste collectors — They are incentivised to collect waste and ensure waste is properly processed through Octopus’s platform.
🐙 In short, Octopus connected manufacturers, waste collectors, and consumers in a seamless loop of sustainability.
 | 🚛 The idea is brilliant. Octopus tackled a massive problem in Indonesia — waste management. Thanks to Hamish Daud’s celebrity status and the promise of a cleaner, greener Indonesia, Octopus quickly gained media attention and went viral. |
From there, Octopus was unstoppable 🐙🐙🐙
In July 2022, the company secured $5 million in funding from notable investors like Openspace and SOSV, validating its business model and helping it expand its operations. At its peak, Octopus gained considerable traction (1,700 waste banks, 14,600 trained and verified collectors, 200,000+ platform users).
🇮🇩 Octopus was riding high, and it looked like nothing could derail its mission to make Indonesia’s waste problems a thing of the past.
📉 The Fall of Octopus
🦑 Well… Octopus actually started sinking 6 months after raising fund.
The downfall of Octopus began to unravel as quickly as it rose to fame due to a tangled mess of financial mismanagement (unpaid salaries), broken promises, and public scandals (fraud and misconduct).
Whistleblower — An existing employee
📌 Here’s what happened to Octopus:
☀️ The Happyness
2020 — Octopus was founded by Hamish Daud along with his four friends.
Jul 2022 — Raised $5M in funding led by Openspace and SOSV for aggressive expansion.
🥁 The Drama Started
Early 2023 — 🚨 Reports of unpaid salaries begin to emerge.
Employees get late salaries for 6 months, on top of 3 months straight of not being paid, causing frustration and unrest among the workforce.
The CEO attributed these delays to a transition to a B2B model that affected cash flow, but this explanation did little to quell the anger of employees who were struggling financially.
Jul-Dec 2023 — 🤦🏻♂️ Allegations of fraud and misconduct surfaced within the company.
🤥 Whistleblower reports indicated that the CEO had committed fraud.
Even worse, it was revealed that the CEO had lied about holding a degree from UC Berkeley — he never actually graduated from UC Berkeley.
🤯 The CMO, Hamish Daud, faced accusations of harassment and sexual assault against a former employee.
⚠️ Employees described a toxic work environment where complaints about management went unheard, leading to a culture of fear and chaos.
Despite all these issues, Octopus’s management still remained radio silent.
Jan 2024 — Octopus’s online presence was virtually dead.
The Octopus’s mobile app was inaccessible.
The Instagram account was wiped clean, leaving only a vague "Octopus will be back soon" post.
The last blog post on their website was from November 2023, indicating that the company had effectively gone silent.
Employees were reportedly put "on rest" indefinitely, with no clear direction or communication regarding the company's future.
Feb 2024 — Suddenly, Hamish resigned from his position as a CMO due to “personal reasons”.
Many unanswered questions arose:
Was he really stepping down for personal reasons, or was it to dodge the mounting allegations against him?
Was he even a co-founder?
Despite every source claiming his involvement from the start, his manager (Vitalia Ramona) suddenly denied it, stating he was just another unpaid employee (Wait, what?).
She said Hamish’s position is only CMO (employee title), and he is a victim as he has not been paid for 4 months.
Till today, nobody really knew why Hamish left.
Jul 2024 — The CEO tried to sell the business to competitors but failed.
Employees weren't paid. They were never transparent about finances, and there was no more funding. Even when there was no more money, they refused to shut down the company because they couldn't afford to pay severance.
💀 As of this writing, so far there’s no word whether the company is still operating or not, so we shall see.
🐙 But there’s one thing for sure — What started as Indonesia’s great hope for waste management ended as another startup that couldn’t keep its promises. And in the end, Octopus sank under the weight of its own tentacles.
Do you think Octopus can still bounce back? Reply and let me know!
Want to learn more about Octopus’s downfall?
⚠️ 2 Mistakes
Mistake 1: Financial mismanagement & lack of transparency
💸 Octopus secured $5 million in funding in July 2022, but the company still managed to fall into a dire financial situation after 6 months.
By early 2023, reports surfaced that employees had not been paid for months, leading to frustration and unrest within the company.
The CEO blamed the delayed salaries on a transition to a B2B model that affected cash flow, but the underlying issue was probably poor financial planning and resource allocation with unrealistic expansion.
This financial chaos ultimately undermined employee morale and trust in the leadership.
🤫 As financial troubles mounted, the leadership remained silent, providing vague explanations that did little to address the concerns of employees and stakeholders.
The absence of clear communication and transparency regarding the company’s financial health and internal issues caused rumours, created distrust, and damaged the company’s reputation.
Mistake 2: Toxic work environment
Whistleblower — Someone whose close friend worked at Octopus
The toxic work culture within Octopus was another significant mistake.
As more and more allegations of fraud, harassment, and misconduct emerged, Octopus’s management simply ignored employees’ complaints and allowed the issues to snowball.
This hostile environment, combined with the financial instability, led to chaos and disillusionment among employees, causing the company’s downfall.
🧠 3 Lessons Learned
Lesson 1: Prioritise financial planning & accountability
Octopus raised $5 million in July 2022 and subsequently couldn’t pay its employees after 6 months. That means the monthly burn was close to $1 million in Indonesia.
How? I don’t know. The burn was unreasonably high and it wasn’t sure where the money was spent.
💰 But one thing is for sure — the money raised from investors is their trust toward your execution as a founder and the potential value that your company can create in the future. Never abuse the trust.
🌟 Key Takeaways:
🙏🏻 Spend your investors’ money wisely
As a VC-backed founder, it’s easy to think that you can always raise money in the next round if you don’t have enough money.
It might be true a few years ago, but not in today’s climate. Assume you can’t raise another round for the next 2 years.
Cut the unnecessary fats. Work remotely instead of renting a fancy co-working space. Automate first, hire only as the last resort to delegate. Spend the marketing budget wisely.
💟 Take care of your employees
We all know that running a business is risky, so when shit happens, it’s important to be transparent and open to your employees.
Tell them what happened, why it happened, how critical the problem is, how it affects them, and how the company will take care of them (with minimum impact).
The last thing you want is to leave them hanging without paying salary or giving them any information about what’s going on.
Lesson 2: Be open, not silent
Transparency is essential to building trust with employees, investors, and stakeholders. When things go wrong, staying silent or offering vague explanations can cause more harm than good.
🌟 Key Takeaways:
🤝🏻 Host regular town hall meetings (monthly / quarterly)
It might seem more like a chore to you as a founder. But trust me, it’s probably the most important internal meeting to keep everyone in sync.
These meetings would serve as a platform to update employees on the achievements, future goals, the challenges the company is facing, and the steps being taken to address these issues.
It’s ok to deliver bad news as long as you’re open to sharing with employees and have taken steps to solve the problems.
Lesson 3: Integrity is everything
You don’t need a degree from a prestigious university (i.e. UC Berkeley, Stanford, Harvard) to become a founder. Heck, most VCs I know don’t really focus on the founder’s education credentials — unless you’re building a deep tech startup.
So I don’t understand why Octopus’s CEO had lied about holding a degree from UC Berkeley. If you lose money, you can earn it back. But if you lose your integrity, you lose everything.
🌟 Key Takeaways:
🌱 Be authentic from the start
Always present accurate information about your qualifications, experience, and capabilities. If you lack certain credentials, focus on showcasing your real strengths, skills, unique insights, and the value you bring.
If you're pitching to investors and don't have an Ivy League degree, highlight your relevant experience, past successes, and deep understanding of your market instead.
🫡 Own up to mistakes promptly
When you realise you’ve made a mistake, acknowledge it quickly and transparently.
Taking responsibility doesn’t just show maturity and mitigate damage, it also fosters this positive culture in your company.
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
Sleekflow secures $7M in Series A+ for global expansion (Link)
Every Half Coffee, a Vietnamese startup, raises from OpenSpace & DSG (Link)
Growsari lands $5M to empower 1.3M sari-sari store owners in Philippines (Link)
NEBU, an AI-driven DevOps-as-a-service platform, raises SGD 110k pre-seed funding from Antler (Link)
Amilo, a SG-based logistics firm, acquires Sivadon Logistics in Thailand to accelerate growth (Link)
Bering Lab, a legal AI translation startup, bags $2.3M in Pre-Series A to expand beyond Korea (Link)
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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
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Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
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