It’s among the worst nightmares for a board of directors: Their company is rolling along nicely – growing market share, building profits, preparing to go public – when suddenly a top executive goes rogue and posts an offensive social media message or sends a noxious email that becomes public and threatens to forever associate the company with the unpleasant statements.
That’s what happened recently to Entrata, a Utah-based real estate software company that became embroiled in scandal when its founder and chairman fired off an email to business leaders and elected officials full of antisemitic screeds and unfounded government and corporate conspiracies. The email was picked up by local and national press, including the Wall Street Journal, and loudly condemned in many circles.
But what could have been a reputation killer and a disaster for the company might ultimately be a defining moment for its current leadership and, according to at least one top corporate crisis manager, may go down as a textbook example of how companies should respond when confronted with a potential catastrophe.
“It may be a bit too early to know if this is going to be a classic case study in leadership,” said Richard Levick, chairman and CEO of LEVICK, a public relations and crisis communications firm in Washington DC. “But it sure looks like it.”
That should bring a collective sigh of relief to Entrata’s executives and investors who are still deep in the crisis.
Entrata was founded in 2003 and produces software tools for property managers, offering applications for accounting, sales, utilities, lease signing and other tasks. It boasts more than 20,000 users, mostly apartment communities, according to the company’s website.
Last summer it raised more than $500 million from a private equity firm and said it planned to use the money for research, development and expanding foreign markets. It was also apparently making plans to go public. The company recently changed its platform from a manual input tool to an automatic management solution, and it estimated that the total market for its product was expanding, with the potential to reach $4.1 billion by 2027.
“It may be a bit too early to know if this is going to be a classic case study in leadership,” said Richard Levick, chairman and CEO of LEVICK, a public relations and crisis communications firm in Washington DC. “But it sure looks like it.”
In December, the company’s co-founder, David Bateman, relinquished his CEO title and duties but remained chairman of the firm’s board of directors. It isn’t clear what prompted this job change, but Bateman had a history of starting SaaS companies, building them and moving on. Previously, he founded Allegiance, which he sold to MaritzCX in 2014, and was president of the payments platform Podium.
Never a stranger to controversy nor to using social media to express himself, Bateman was active in Utah Republican politics and occasionally made local headlines for bizarre behavior. In 2018, he posted a video to his Facebook account declaring he was the target of an extortion and arson plot, accusing a state senator of offering a woman $1 million to file false sexual harassment charges against him. Authorities found no evidence for Bateman’s claims.
In 2020, Bateman was hit with a defamation suit by Trevor Milton, the founder of Arizona-based electric vehicle company Nikola Corp., who was himself later accused of fraud. Milton’s suit claimed Bateman “engaged in a malicious campaign to harass and defame” him, using a Twitter account to publish accusations of sexual harassment and even trafficking in women. Milton denied those assertions. However, he resigned as executive chairman of Nikola amid fraud allegations by a short selling firm just days after Bateman started tweeting about his behavior. Subsequently, two women filed sexual abuse complaints against Milton, alleging 15 year-old incidents. Why Bateman injected himself into the affair isn’t clear.
Those incidents were largely locally contained. The offensive email in early January, however, could not be suppressed and went viral, threatening Entrata’s reputation.
In the email, sent from his company account with the subject line “Genocide,” Bateman accused Jews of being behind a plot to kill Americans with the Covid-19 vaccine. “I believe the pandemic and systematic extermination of billions of people will lead to an effort to consolidate all the countries in the world under a single flag with totalitarian rule,” he wrote, sending the missive to a number of high-tech CEOs, as well as Utah business and political leaders, including the state’s governor.
Bateman wrote that the vaccine is a Jewish plot to “euthanize the American people,” and said it was being pushed by global “elites” like Bill Gates and George Soros who are out to depopulate earth.
Bateman wrote that the vaccine is a Jewish plot to “euthanize the American people,” and said it was being pushed by global “elites” like Bill Gates and George Soros who are out to depopulate earth.
In addition to these fairly typical antisemitic fantasies, Bateman also included the more unusual claim that “the Jews” also secretly replaced the pope with a Jewish religious leader with the election of Pope Francis.
News of the offensive email spread swiftly, leading to universal condemnation from both political and corporate leaders. But, following the crisis management edict of “tell it all and tell it fast,” Entrata acted immediately to sever ties with its co-founder and chairman.
Within hours of the email surfacing, the company said it had ousted Bateman. Posting on Twitter and Facebook, the company’s newly-installed CEO, Adam Edmunds, said he had asked for Bateman’s resignation. And he got it.
“Dave is no longer a member of the board, effective immediately,” Edmunds said. He also roundly castigated the email, saying, “To be absolutely clear, we at Entrata firmly condemn antisemitism in any and all forms.”
The fire extinguishing didn’t stop there. Entrata quickly reached out to other tech executives, Jewish organizations and local advocacy groups to say that Batemen’s views did not represent those of the company, and, in some cases, to use its resources to back that claim up.
“I expected they would offer lip service after this thing that happened,” said Rabbi Sam Spector, of Congregation Koi Ami. “But, that’s not what it was.” Spector wrote on social media that the software firm had made a “transformational” donation to the Salt Lake City synagogue.
“I expected they would offer lip service after this thing that happened,” said Rabbi Sam Spector, of Congregation Koi Ami. “But, that’s not what it was.” Spector wrote on social media that the software firm had made a “transformational” donation to the Salt Lake City synagogue.
“This is something we did not ask for, nor did they ask us to share it publicly,” he wrote. “We have chosen to announce the gift to highlight the important allyship this company has offered us.”
At about the same time, though, Bateman doubled down on his assertions, posting on Instagram what started out as an apology but then ventured into more conspiratorial fantasies. He said he had “great love” for Jewish people but his “beef is with the khabbalist (sic) central banking, secret society jews.”
That led Entrata to demand Bateman give up all ownership of the company, as he was still the largest shareholder. And again, the former chairman complied.
“The Entrata board of directors and executive team has informed David Bateman that he must divest his equity holdings promptly,” Edmunds wrote on Twitter. “Mr. Bateman has agreed to cooperate with that process.”
Neither Batemen nor the company responded to multiple requests for comment – perhaps part of their crisis management strategy. Nevertheless, the company’s response drew high marks from crisis counselors, including Levick.
“Given everything we've seen so far, I think the company gets an A for its responsiveness, its leadership, and its forward looking outlook,” he said.
Another sign that the company’s response may have succeeded is that media coverage of the affair has died down following the initial splash of interest.
“It’s not not getting a lot of pickup,” he said. “And that tells you that they made sure they cut off the head of the snake so that this story doesn't have a long tail. And they didn’t wait around to see how it was going to play. You know, crisis is not like wine, it doesn't get better with time.”
