Former colleagues and partners have been asking about Mark Mazza, Patrick Williams, and PromoCodeWatch.com and our lawsuit against them. The following provides a timeline of events and facts for the benefit of those who know us and may have questions about our ongoing litigation.
Why this article?
We've decided to go public about our legal action against Mark Mazza, Patrick Williams, and PromoCodeWatch, LLC. As our litigation has progressed, they have recently threatened to countersue us for defamation.
So, we're providing this article to provide a timeline of events and the facts about Mark and Patrick's activities which we view as fraudulent. It is our preference to be as open and transparent about this matter as possible.
We will continue to pursue our claims in court until their legal conclusion, and we look forward to defending ourselves against any allegations that Mark, Patrick, or PromoCodeWatch may make.
We're also writing this as a forewarning to prospective partners, employees, or employers of Mark Mazza or Patrick Williams. We believe these individuals defrauded us, their former employer, by stealing trade secrets and proprietary and confidential company information and materials and then used this information to compete unfairly against us in the marketplace.
If you are a current or former employee of ZipfWorks, we are using this document to shed light on the pending legal action which is a matter of public record. Please note that, as a matter of company policy, we respect the privacy of our employees. The conversations and information we've documented here were procured from these individual's computers and company accounts only as a result of this ongoing litigation.
Our lawsuit against Mark Mazza, Patrick Williams, and PromoCodeWatch LLC
In February 2017, we filed a formal complaint against PromoCodeWatch LLC and its founders. You can view a copy of the full complaint here.
Here's why we're suing them.
We allege that these two individuals left our company, took with them confidential information with them about how we built, operated, and marketed our website to create what we call a "shell" clone of our website within 2 weeks of their departure from our company.
We call their website a "shell" copy of ours, because it only resembles our website on a superficial level, in that it mimics the site structure, page structure, and concept of our site.
95% of the difficulty and resource allocation of running a real coupon website lies in creating, editorializing and maintaining content. In the online coupons industry this means adding, editing, and updating tens of thousands of coupons and coupon codes every day.
In our case, we utilize crowdsourcing whereby nearly 200,000 community members edit and update our deals, and we employ a staff of 30 full-time employees to moderate and manage this community. In other cases, companies like RetailMeNot and Coupons.com employs hundreds of employees to maintain high editorial standards. Contrast this with Promocodewatch.com, which has just 3 employees.
The online coupons industry faces a problem in it is that it is relatively easy for any company to setup a site that visually resembles RetailMeNot.com, Coupons.com or our site, but then populate that site with fake coupons and coupon codes. Then, given the importance of search engines as a source of traffic for coupon sites (as this is how most people search for them), these "shell" site operators can invest in schemes to boost and manipulate their search engine rankings and derive profits, because the search engines have yet to develop a way determine that these shell sites don't actually have real coupons.
In fact, displaying a large number of fake coupons can actually have the effect of boosting a site's rankings on search engines like Google, because if visitors are clicking to view and trying out numerous coupon codes, in a search engine's eyes, this may indicate that there is something of interest on this site (a concept known as dwell time).
This is a challenging issue to address in the coupons industry, and is among the driving reasons why, for consumers, so many coupon codes online seem to be expired or simply don't work. Currently, there is no solution for this - Google and other search engines have not figured out a way to differentiate a good coupon site from a fake coupon site.
However, in this case, we can expose the inner workings of at least one such "shell" coupon site. We're familiar with the creators of PromoCodeWatch.com (they are our former employees) and we've obtained evidence of their intentions to create a fraudulent "blackhat" coupon site after leaving our company. They discussed this matter extensively with each other while employed with us on our internal chat systems, and during the course of our litigation, we've recovered these chats as evidence. The founders, Mark Mazza and Patrick Williams, discussed leaving ZipfWorks to "throw morals and Google's judging eye out the window" and setup their own "blackhat" version of our coupon website. They even went as far as to attempt to poach our own engineers to help them with their fraudulent project, as our screenshots show.
We further conducted a detailed analysis of their website, promocodewatch.com, over an extended period of time and documented with hundreds of screenshots, how they posted primarily false and expired coupon codes and utilized sophisticated UI cloaking techniques to mislead their site visitors into thinking these were real coupons, verified by editors. In fact, 93% of the coupon codes we examined on Promocodewatch.com were invalid or expired. Contrast with a site like RetailMeNot, which in our latest study had only 24% of expired or invalid codes displayed, or our site at 22% expired / invalid.
Perhaps most damningly, Promocodewatch.com displayed promo codes for e-commerce stores that explicitly do not offer promo codes as a matter of store policy, such as 23andme (see screenshots). Not only did Promocodewatch.com display codes for these stores, they featured them prominently with their signature "verified" green checkmark label, and continuously changed their expiration dates each night with what appeaed to be an automated script. These techniques appear to be a coordinated effort by PromoCodeWatch to deceive their own users and search engines into thinking their website contained superior content than mainstream coupon websites like RetailMeNot (which correctly displayed no coupon codes for 23andme).
This article serves to document the details of how Mark Mazza and Patrick Williams operate their website PromoCodeWatch.com. You can read a copy of our formal complaint filed in the state of California here.
Mark Mazza and Patrick Williams discussed engaging in fraud on our internal chat systems
Mark and Patrick also behaved in ways to indicate that they shared a mutual desire to run a fraudulent business that would not respect the bounds of traditional business ethics. We recovered conversations between Mark and Patrick on our corporate messaging system in which they discussed the possibility of conspiring to create various unethical business ventures.
Here is one such conversation which occurred on August 5, 2015, three months before Mark and Patrick launched promocodewatch.com:
And another on August 27, 2015, two months before launching promocodewatch.com, in which Mark Mazza states his desire to "go blackhat so bad, just throw morals and googles judging eye out the window":
Mark and Patrick used their confidential knowledge of our strategic pivot to steal traffic from us
In 2015, we made a strategic decision to change our marketing strategy for Dealspotr, our crowdsourced coupon site. One component of this change was to migrate away from a specific type of search engine marketing strategy. To be specific, we wanted to become less reliant on a specific search engine marketing strategy which we'll call "sponsorship partnerships" and move to a more diversified strategy involving influencer marketing, content marketing, and PR.
We allege that Mark and Patrick utilized their knowledge of our shift away from sponsorship partnerships to advantage PromoCodeWatch's growth once they left ZipfWorks. We further allege that they stole our confidential contact lists to rapidly reproduce our marketing strategy with PromoCodeWatch. Our evidence to support this claim is that roughly 70% of PromoCodeWatch's sponsorship partnerships created from their inception were the exact same partnerships as ours. We are pursuing in discovery knowledge of whether Mark and Patrick utilized our contacts and marketing techniques to create these partnerships, but it seems likely given the speed at which they replicated our partnerships.
We believe that Mark and Patrick knew that replicating our partnerships, during a time that we were migrating to a new marketing strategy, would have the effect of redirecting search engine traffic from our site to their site. And this indeed is what happened, from PromoCodeWatch's inception through today, we believe that they have stolen a significant portion of our traffic.
PromoCodeWatch displays expired coupons and uses UI cloaking to make them look like valid deals
By far the most expensive and resource-intensive part of running an online coupon site is content development - namely keeping coupons verified and up-to-date for tens of thousands of stores. For example, PromoCodeWatch promotes pages for roughly 48,000 stores:
To check those 48,000 stores to ensure their coupons were up-to-date would require significant resources and manpower. For example, mainstream coupon sites such as RetailMeNot, Offers.com, and Coupons.com have dozens to hundreds of employees dedicated to keeping coupons current. In our case we use crowdsourcing and an active community of 200,000 user members to test, verify, and edit thousands of coupons each day.
In 2016, we saw evidence that rather than posting valid coupons, PromoCodeWatch was mass-posting fake coupons, so we conducted an in-depth study with screenshots to analyze their website during December 2016 through February 2017. We found that, of the 126 coupon codes we tested on their site across 31 stores, only 7% provided a valid discount.
Furthermore, we discovered that PromoCodeWatch engaged in a programmatic scheme to deceive users on their very own website. Each day, PromoCodeWatch executed a site-wide programmatic script which mass-updated expiration dates across almost all of their site's coupons in one fell swoop. This script modified the expiration dates of their coupons site-wide, moving them back by a few days at a time. This script ran even on expired, invalid, and outright fake coupons on their site.
This script had the effect of making all of their coupons (even fake or long-expired ones) appear to be current and valid, just expiring soon on a specific day in the very near future. While every coupon site will have instances of expired coupons, these tend to be isolated cases rather than widespread patterns. Further, no ethical site operator would proactively update their expired coupons to make them appear to be active.
We can only imagine that PromoCodeWatch's tactics caused thousands of visitors to click on these coupons and go through the trouble of trying to redeem them, only to find, after wasted time and effort, that such coupon code was already expired or otherwise invalid.
For Mark and Patrick, however, this was probably a way to generate revenues from thousands of coupon pages which they did not bother to update.
In chats, Mark Mazza has demonstrated his familiarity with the notion that continuing to display coupon codes after their expiration date can result in clicks (and revenues), even expressing sarcastic disdain towards our internal policy of actively removing such expired codes.
In a further scheme to deceive their own site visitors, PromoCodeWatch also displayed a green "verified" checkmark label on the coupons displayed on their site. This is a recognized symbol in the industry to used to indicate trust, that the website operator had tested the coupon and is claiming that the coupon works. PromoCodeWatch prominently displayed this green checkmark, even for coupons that were invalid, fake, or expired for over one year.
PromoCodeWatch's intent to mislead users became even more clear to us when we observed that they posted promo codes for 23andMe, a retailer that explicitly does not offer promo codes as a matter of store policy. We emailed 23andMe to reconfirm this fact, which they did:
Not only does PromoCodeWatch.com display 3 promo codes for 23andMe, they display them as "verified" at the top of their page, and they continuously alter the expiration dates of these promo codes so that they never expire.
Here's PromoCodeWatch's page for 23andMe taken on Jan 21, 2017:
Here's the same page a few days later on Jan 29, 2017. All 3 fake codes are still there (re-ordered, but they are the same codes) - see how all the expiration dates have been altered:
And again a few days later on Feb 3, 2017, see how the expiration dates for these 3 fake codes have been altered once again:
This appears to us to be an explicit a practice designed to deceive shoppers into clicking on these codes and boosting PromoCodeWatch revenues.
You can read the the full study here.
Taken together, this evidence suggests that Mark and Patrick utilized two unethical business practices to run their own website. First, they skipped the investment in the required infrastructure, technology, and manpower to operate a valid coupon website with real content in the form of real, verified coupons. Second, they went one step further and took proactive measures to actively deceive their own site visitors into thinking their fake content was real.
To summarize, as we allege in our complaint, we believe that Mark Mazza, Patrick Williams, and PromoCodeWatch engaged in the following fraudulent conduct:
- Mark Mazza and Patrick Williams met each other while working for us. Neither had prior industry experience in the affiliate marketing or online coupons areas.
- From internal chat records, we have reason to believe that they had an openness to running an online venture that did not respect the bounds of good business ethics
- We know that Mark had detailed inside knowledge of the Competitive Search Position Replacement effect
- We believe that Mark and Patrick utilized their knowledge of the Competitive Search Position Replacement effect and used it to unfairly divert traffic from our website to theirs.
- We believe that Mark and Patrick used confidential contacts and private brokers they learned about as our employees in order to acquire backlinks at a more rapid rate than would otherwise have been possible
- PromoCodeWatch cloned our site's structure, mirrored our content and cloned our backlinks, acquiring an initial backlink portfolio with 70% overlap with ours, making it clear to us that Mark and Patrick intended to use the Competitive Search Position Replacement effect against us and to their benefit
- Without this confidential information, we believe it would have been highly unlikely for Mark and Patrick to have been able to launch a new venture in a competitive industry and reach one million monthly visitors and profitability within their first year of operation
- Mark and Patrick likely invested over $100,000 in backlinks in their first year of operation, and skipped the necessary investment in infrastructure and manpower to provide real, working coupons on their website
- They went further and took active measures to deceive their site visitors into thinking their fake or expired coupons were real
- Mark and Patrick have likely earned significant profits as a result of these fraudulent activities
- Our business has been harmed as we have lost significant revenues, and have had to layoff staff as a result.
PromoCodeWatch, in our view, is an illegitimate business which engages in fraud and intentionally harms consumers for its own unjust enrichment, and should be shut down. We believe Mark Mazza and Patrick Williams used secret, non-public information about our business, operations, and marketing to unfairly compete with us in the marketplace and steal revenues from us. PromoCodeWatch's unethical and illicit practices have resulted in lost revenues for us, and has directly impacted the lives of employees who were laid off as a direct result of their actions. We are seeking damages in the form of lost revenues since 2015 and the amounts that PromoCodeWatch and its founders saved by misappropriating our trade secrets and confidential and proprietary information.
More details on Mark P. Mazza
Mark Paul Mazza started to work for us on February 7, 2013, as a junior data entry assistant.
Mark was a hard worker and was eager to learn. Mark has an affable, disarming demeanor - he likes to talk sports and gossip about the office - and he's good about fostering relationships with people around him. I liked Mark personally, and over time I entrusted him with a lot of responsibility. He eventually learned enough to manage our affiliate advertising accounts, helped manage our overseas outsourcing team, and assisted with a range of business operations tasks.
Mark came in with little relevant experience (he was a data entry clerk at SodaStream and did sales cold calling while at Organic Online). We paid him $15 per hour to perform data entry tasks.
Mark lacked copywriting skills, which I viewed as essential in business, so I bought him a copy of the classic "Elements of Style" by William Strunk. Mark was surprised by this, I think he wasn't expecting me to invest in his development, which I do for all my employees.
Over two and a half years working for me, Mark grew under my mentorship from an entry-level hourly employee to a capable junior manager. Because I saw that he put in effort on the job, I paid him well, he eventually came to earn six figures and earned significant equity grants under me, which is far above market rate for his skillset. I had Mark talk to our advertisers, I sent him to affiliate marketing conferences, I even entrusted Mark with a company credit card. Generally, I treated Mark well.
Mark and I did weekly one-on-one meetings, during which I gave him extensive mentorship in running an online business, including building a website, the basics of search engine optimization, affiliate advertising, and how to recruit and run an outsourcing team.
I invested a lot of time and energy into Mark's development, Mark really did come to ZipfWorks with no discernible skills in online business, and his career in affiliate marketing got its foothold under my direct mentorship over two and a half years.
During his tenure with us, however, I started to notice some signs of trouble with Mark. Through conversations with members of my team, and through documentation brought to my attention, I came to learn that Mark sometimes misused his position of trust with me.
I learned of incidents when Mark shared privileged information (financial information, or sensitive HR and personnel matters) about the business with other employees who were not authorized to hear such information.
In two instances, internal messages were brought to our attention in which Mark solicited software engineers on our team to work on side projects with him, going so far as to hint that he might launch a competing product in the affiliate marketing space (in one incident he propositioned an engineer to join him to build a "shady affiliate" site.
Mark also misused his company credit card as well as his access to our corporate PayPal account, charging late night weekend car rides on his AMEX, and purchasing personal meals for himself without authorization. The very day Mark received this corporate AMEX, he immediately discussed using it to fund his online poker account via Bitcoin with a fellow employee:
Mark and Patrick would also discuss the topic of abusing Mark's company credit card. While the following instance does not in itself prove any specific wrongdoing, it serves to illustrate Mark and Patrick's general character and attitude towards the company:
We observed a range of additional behavioral issues, including playing online poker while at work (and encouraging other employees to join him in doing so) - this chat occurred on a workday in the office around 1pm:
Mark was terminated in October 2015. This was a tough decision for me, as I had invested a lot in him. Mark knew my wife and kids, I even recall one time that bought my oldest daughter a set of stickers of Frozen princesses. There was a connection there, but I had seen enough warning signs with Mark to know that it was best to part ways.
After being terminated, Mark removed and blocked both me and my wife from his friends list on Facebook. He then proceeded to create PromoCodeWatch, recruit Patrick (whom he met at ZipfWorks), and utilize his inside knowledge of our operations to undermine us and while growing his fraudulent business.
More details on Patrick M. Williams
We hired Patrick Melvin Williams on March 30, 2015, as our UI/UX Designer. Patrick brought with him experience as a designer at 309 Media, ProductionBeast, Booz & Company, Serge Media, and Mahalo.com. Patrick, having graduated from Full Sail University, didn't come with a traditional educational background in design, but made up for it with an innate talent for marketing and an eye for design. Patrick had a strong ability to incorporate business strategy into his designs to create complete, sensible designs that meet business goals.
As current and former employees will attest to, Patrick struggled a bit with interpersonal relationships in the office. He often became visibly upset when questioned or challenged by engineers or other designers on our team. I spent significant time counseling him privately, some meetings going for two hours or more, trying to help him interface with team members on a more proactive, professional level, without taking things personally. As I do with all my employees, I invested in Patrick's development in his short tenure with us.
One unusual thing about Patrick, though, is a conspicuous lack of digital footprint. He has almost no presence on social media, not even on LinkedIn, which is very unusual for someone in the online industry. Even now, as a co-founder of PromoCodeWatch, Patrick cannot be found on LinkedIn:
In 2017, it is highly unusual that a co-founder of a technology company would not list themselves on LinkedIn. Patrick does not even appear as an employee on PromoCodeWatch's LinkedIn company profile. Back when I interviewed Patrick, I also found it odd that he left out large segments of his life and career from his resume in which he omitted his school background and his experience at Mahalo.
Update on 2/13/2018. Patrick has created a new profile on LinkedIn. He's cleaned his background out such that PromoCodeWatch is no longer listed as a part of his employment history. He's also removed ZipfWorks from his background.
However, Patrick's Crunchbase profile continues to display his PromoCodeWatch experience. Perhaps its only a matter of time until this is deleted too.
Where we're headed
For us, it's rather simple. A coupon website or app exists for one reason: to provide accurate, working coupons for shoppers, and to try to do it better than the competition. A site that posts fake coupons, masks them as real ones, and then invests in unethical marketing schemes to rank prominently in search engines, is a simple fraud, nothing more.
As for us, we're continuing to keep our heads down, focusing on providing our industry's best content. We've already largely succeeded in this regard. By building a large community of deal enthusiasts, and by creating a compelling incentive program based on gamification, we have developed, based on studies we've conducted, the industry's most complete and most accurate database of coupon codes.
We continue to execute our strategy of growing our business through community development, influencer partnerships, content marketing, and PR.
Will continue to pursue our legal claims in court against Mark Mazza, Patrick Williams, and PromoCodeWatch to stop them from competing unfairly in the marketplace while defrauding our company and their users. We believe their website was created through unjust means, and is harmful to consumers, and should be shut down. We will also seek to recover lost revenues lost to PromoCodeWatch going back to 2015 as well as damages for Mark and Patrick's unjust enrichment from their use of our trade secrets and proprietary information.
If you have any questions about this ongoing litigation, or any of the information provided in this article, feel free to contact us at zipfworks.com.