The Red Herring Awards Scam

(Image: brooketrout.com)

This past weekend, we’ve received a lot of emails from startups proudly telling us that they won the Red Herring Awards. Sure, Red Herring was an award brand name to be proud of in the past, but recently I’m hearing very nasty things about it. Some have even called it a scam, as told to me by a trusted source who experienced Red Herring’s bullshit first-hand.

My source’s company was nominated in the US in 2009 and 2010, and then for Asia in 2011 and 2012. He described to me how the Red Herring process works below:

[The guys from Red Herring] call you and give you a big pitch about how you were selected by some rigorous process and a special selection committee. But later I’ve learned through ex-employees that there are only a handful of folks in the organization and they’re really all just sales guys trying to convince startups to come to their conference. The CEO is the biggest sales guy of them all.

For Red Herring Award ‘winners’ that should sound familiar, no? Read on:

First, they send you an email saying that you’ve been nominated for an award and they need to set up a conversation with their CEO, Alex. He’ll never email you any info – even if you request it – he’ll only call you live. They want to make sure you’ve never been to the conference before (probably so you don’t know the scam) – even though this is something they should be able to check before they contact you.

Then Alex calls you and runs through a long congratulatory talk about how great your company is and how you made it through such a rigorous selection process, even though it is clear he doesn’t know anything about you or your business. It’s the same pitch he gives to everyone – I know because he’s given it to me three times and I know many other entrepreneurs that have heard the exact same pitch!

The killer blow is the way they sneakily work in their sales tactic…

Finally, at the end of the phone call, he says the “only” requirement for you to get the award is to come present to their esteemed panel of judges at the conference – and “of course, this means paying your own travel expenses AND a conference pass.” Before you can say anything, he always goes into some story about how some nominee from some random place (one year it was a guy from Idaho, then another year it was a mysterious guy from Kurdistan), expected Red Herring to pay for him and his family’s travel expenses.

The story is the exact same every year, just a different country. He’s really just trying to cover up the fact he wants you to pay him about $3,000 as a registration fee to attend his conference. He even goes into how “that should be nothing for a company like yourself that’s doing so phenomenally well.”

When I followed up later to see if I had to pay for the conference even if I was not going to attend – just go for the seven-minute presentation to the judges, the answer was still a resounding “yes.” Along with a long email about how great the conference was and had so many great speakers that I would definitely want to attend.