How One Business Survived a Media Meltdown

April 5, 2011  |  

(Inc.) — Greg Tseng, CEO of the social networking website Tagged, had just landed in Manila, on Saturday, June 6, 2009, to kick off a long-awaited vacation. As soon as he dragged his jet-lagged body up to his hotel room, though, an onslaught of phone calls, e-mails, and text messages from his co-founder, Johann Schleier-Smith, and other Tagged employees began: Something was seriously wrong with the site.

In the 24 hours since Tseng had left his office in San Francisco, thousands of complaints had been filed by users—who claimed that Tagged’s new registration process had somehow tricked them into spamming all of the contacts in their e-mail address books. For Tseng, the news was puzzling. The registration process had been extensively tested before going live. Why were problems emerging now? He asked Schleier-Smith to shut the system down and perform another series of quality tests. Meanwhile, Tseng organized an emergency transpacific conference call to get his management team and advisory board up to speed.

The new system had been live for just 72 hours. But Tseng soon discovered that he had not been fast enough in shutting it down. Coping with crisis was a new experience for Tseng, who had known little but success in his brief time as an entrepreneur. He and Schleier-Smith, friends since junior high school, founded Tagged in 2004, after graduating from Harvard and spending a couple of years studying physics at Stanford. Of course, that was the same year another Harvard kid, Mark Zuckerberg, started his networking site: Facebook. But where Facebook focused on connecting college students, Tseng and Schleier-Smith targeted the teen market. By the end of 2006, Tagged had about 12 million users.

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