My interview with Phoebe Gates last year was my most difficult
celebrities + (non) diligence, Phia as a proxy to fame + my new obsession with the term cookie stuffing; we can't pretend everyone wasn't waiting for a takedown
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The moment everyone’s been waiting for
I’m in Chicago for a few days and I have barely had time to settle into a martini with this Phia news blowing up my messages!
ICYSMI: Phia—the highly hyped shopping startup co-founded by Phoebe Gates was the subject of a major Bloomberg investigation last Thursday over cookie stuffing: a method where Phia’s browser extension allegedly inserted its own affiliate tracking code at checkout, allowing them to collect commissions that they did not earn, ultimately stealing from the creator who actually drove the sale.
Phia has released a statement saying it was a system glitch that has now been fixed.
Is now a good time to admit everyone was expecting something fishy like this to happen? Phia has been a topic of fodder amongst founders and consumer brand leaders since launch.
Is it me or is society’s BS detector more heightened than ever? I’m actually surprised this is happening so early in the company’s short life.
The Phia Way
In the earlier days of Slutty Founder and ahead of Phia’s launch, I interviewed Phoebe.
I suppose now I’m free to admit that it was the most challenging founder interview I’ve covered.
To first bore you and add unnecessary dissonance—Phoebe actually seems like a sweet person. She was generous in sharing a resource with me that I was desperate for at the time. I was invited to Phia’s launch party in New York City, but was unable to make it.
When I got the answers back to our interview I didn’t know what to do with them. They felt a bit sanitized and a little PR woven—much less like our one to one interactions or anything we’ve ever published.
I ultimately chose to publish the interview as it was received, allowing readers to draw their own conclusions and create their own takeaways.
Around the time of publishing, I came across the tiniest detail that alerted me as to how the Phia girls got down.
THE BURNOUTS
Alongside Phia, the shopping platform and browser extension that compares fashion prices, co-founders Phoebe Gates and Sophia Kianni had launched their podcast The Burnouts where they mostly feature out of touch celebrities 2x+ their age like Kris Jenner (one of their earliest celebrity investors) and Paris Hilton.
But when I looked into the pod’s digital footprint, its Instagram account had about 450k followers or so despite having published only a single episode. In addition to this the engagement didn’t seem to align organically at all.
It’s an open secret that public figures and celebrities purchase accounts with a large pre-existing following all the time, which is what I assumed could be happening there.
It’s all smoke and mirrors at the end of the day, isn’t it?!
But the account activity did make me think: hmm. okay You guys are playing THAT game.
I have a term for this, I call it ‘taking it there.’ It’s defined by doing what you have to do to appear magnetic by any means, usually fabricated. Today’s internet would call it LARPING. Their social media was just one piece of a bigger effort to make the numbers match the narrative they were selling.
Also worth noting is that while The Burnouts had over 400k followers, Phia itself only had a modest 5-figure following. Why were they over-indexing on The Burnouts handle?
I questioned from the beginning if these girls even really wanted to be founders.
Even more so now that it’s unclear if building towards organic product adoption was a consideration at all and not an afterthought.
The Perfect Storm
Phia feels like the inevitable byproduct of everything venture capital rewards today—privilege, manufactured hype and enough FOMO to suspend skepticism.
After all that’s what raising money is about: getting your stakeholders drunk off the fantasy. And Phoebe Gates is the ultimate fantasy. She represents access and proximity to power which moneyed people love <333 and always need more of, of course (!!!!).
The celebrity Series A round is the clearest example.
On the diligence discourse
I said in a video that I couldn’t stop thinking about the possibility that the celeb led round was a fundraising tactic in and of itself because of how differently the diligence process might look. Most celebrities are investing from a different vantage point. They aren’t expected to perform diligence in the same way a traditional venture firm might. As Julia of Full Disclosure pointed out, that wouldn’t make Phia the first brand to have raised money this way:
And they won’t be the last.
Phia brought in 30+ celebrities and influencers as investors to land their $35M round. Ironically, I think this is what backfired on them and put them under an even bigger microscope. I think the question soon became: why are so many high profile people backing an app that isn’t sticky IRL??? The most probable comment you’ll find under any Phia related video right now is ‘literally nobody uses this app.’
Oh, Honey (!)
Phia didn’t invent the cookie stuffing playbook.
Ali Kriegsman—queen of affiliate and writer (who’s business thriller The Raise is eerily similar to everything going down with Phia) who I will be getting on a tipsy Substack Live this Thursday with to discuss the matter—shared this video with me:
I can’t be alone in thinking that the President of Honey advising Phia is a remarkable detail.
In Honey’s cookie stuffing case, the court ultimately ruled in Honey’s favor after finding that the plaintiffs couldn’t demonstrate compensatory harm.
The interesting question for me is whether Honey’s previous legal outcome may have shaped how Phia thought about the boundaries of what is possible.
So what happens now?
As I shared a few days ago, I don’t agree with the talking point that this sets a poor precedent for future female founders raising money.
LAUGHS MANIACALLY IN BLACK FEMALE FOUNDER.
Maybe I could have strung my words together more nicely, but I still think that this serves as a reaction from a particular group of founders who experience a different baseline of access and rejection.
There was (likely) little to no diligence here because there was never going to be diligence on someone so initiated. This doesn’t create a new hardship, that’s BEEN the default. I’m struggling to imagine how some sort of macro change will be ushered in because of Phoebe. If anything this all shows us that the system is behaving the way it’s intended to. This isn’t a shocker to me. So forgive me if this micro attempt at a women’s empowerment movement makes it hard for me to not roll my eyes.
What will Phoebe face?
The truth is I’m mostly neutral to themes of grifting, fraud and scamming.
I literally sent my best friend a 6-minute voice note analysis last week about why scammers are some of society’s most audacious and creative people.
That said, I’m not particularly invested in Phoebe Gates facing legal ramifications for this. I think the most baffling aspect of the Phia scandal is the sheer lack of necessity driving it.
Could this land Phia in serious legal trouble? Maybe, if there is evidence that investors were intentionally misled. But who on their cap table going to jump first? As of today, no charges have been brought against Phia.
For those hopeful, I wouldn’t be holding my breath expecting punishment—or for the even more hopeful—jail time.
So what happens?
Do investors get their money back? Does Phia shut down? Does everyone swiftly move on and call it a close one?
As I touched on above, I’ve always thought of Phia as much more of a media vehicle and that the app was just a proxy to fame and visibility.
When did it become prerequisite for founders to appear on Bravo’s Watch What Happens Live? Building in public never needed to go THAT far, lol. At this point, a best case scenario could be that Phia gives investors their money back and Phoebe goes full-in on becoming a media personality as I suspect her heart desires. I actually find her funny in a way. Charming, even. There is potential for this! Especially after scandal!
Either way, I don’t see Phoebe going away anytime soon.
Ali Kriegsman and I will be going live Thursday at 4:05 PM EST to chat about the Phia scandal and this week’s happenings. Grab a drink and join us!! 💗 💖 💕 💓 💞 💘
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