Did Ozy Media co-founder Samir Rao have a key role in its collapse
Earlier, this week Samir Rao was asked to step down by Ozy Media. A co-founder, he was the chief operating officer of the Mountain View, California based startup. Then yesterday, Ozy, which had 75 employees, suspended its operations. “It is…with the heaviest of hearts that we must announce today that we are closing Ozy’s doors,” the board of directors said in a statement to Axios.
Ozy, created what it called “the new and the next” content on a variety of topics for its website, newsletters, videos and podcasts. Some of the videos were distributed through PBS and other TV channels but most were put up on its YouTube channel. Shows included interviews with TV host Trevor Noah, politician Hilary Clinton, billionaire investor Mark Cuban, actor Scarlett Johansson, musician John Legend and other big names. It also organized an Ozy Festival in New York with ticketed entry to hear authors, musicians, sports stars and other celebrities.
This week, Ozy’s chairman, investors, advertisers and other clients and key employees cut ties with the company after a New York Times story on September 26. In the winter of 2020, investment bank Goldman Sachs was considering investing $40 million in Ozy. Goldman executives set up a call with a senior YouTube executive to verify Ozy’s viewership and other data on the video platform.
Suspecting a digital altering of the YouTube executive’s voice, Goldman contacted YouTube and found the executive had not participated in the call. Carlos Watson, Ozy co-founder and chief executive, apologized to Goldman saying Samir Rao had impersonated the YouTube executive, according to The New York Times. The story - as well as other media reports - also questioned the audience numbers claimed by Ozy for its various platforms.
Google, owner of YouTube, alerted the Federal Bureau of Investigation about Rao’s impersonation. In an email to The New York Times, Watson attributed the impersonation to Rao’s mental health crisis, adding that, “I’m proud that we stood by (Rao) while he struggled, and we’re all glad to see him now thriving again.” Watson said.
In 2013, Carlos Watson and Samir Rao, (in photo), former colleagues at Goldman Sachs’ New York office, founded Ozy with a big idea: “satisfy our desire for smarter, fresher and more diverse media.” This was for “people who are edgy and educated, hungry and observant — and tired of being handed the same menu rehashing yesterday's top stories.”
In a press release for Ozy’s The Carlos Watson Show, Rao described his co-founder Watson “as a Black man (from Florida born to Jamaican parents) who always fought against the odds — from working his way to Harvard, to hosting on MSNBC and CNN, to becoming one of the few Black CEOs in media”
Ozy attracted major investors including Emerson Collective, owned by Lauren Powell Jobs, the billionaire widow of Apple founder Steve Jobs, as well as German publishing giant Axel Springer. By April 2020, it raised a total $83 million at a valuation of about $160 million, according to Pitchbook.
Ozy was a difficult place to work, some former employees told New York Magazine and other media, and both Watson and Rao shouted at employees.
Samir Rao, son of Indian immigrants, grew up in suburban Detroit, Michigan. Following an AB in math and economics from Harvard University, he worked as an associate at Goldman Sachs from 2007 to 2011. Trained in classical Indian music, he is an amateur composer of advertising jingles.
Apparently, Samir Rao has shut down his LinkedIn and Twitter pages.
The rise and fall of Ozy, with a cast of Ivy league educated founders and big-name investors, politicians and celebrities, is similar to numerous, recurring Silicon Valley tales, most recently that of Theranos, which claimed it was revolutionizing blood tests and which had another Indian American Ramesh Balwani as its president.
As a New York Times reporter noted, the “one nagging question in this era of spectacular booms and busts is where, exactly, the line is drawn between fake-it-til-you-make-it hype (Tesla!) and possible fraud (Theranos!). That line is often blurry and comes into focus only in retrospect. Early fluffery can be excused by later success.”