I’m not gonna lie, this NGL lawsuit is pretty juicy – TechCrunch

Anonymous question-and-answer app NGL climbed to the top of the App Store by tricking its users with questions supposedly sent by their friends and charging for useless clues as to who allegedly wrote those messages demanded. But many of the questions users receive are not from real people; they’re automatically generated – an idea NGL’s main competitor, the maker of the Sendit apps, now claims that the maker of NGL stole confidential business information, among other things, according to a new lawsuit.

In a complaint filed July 1, 2022 in the Superior Court of California, Sendit’s creator, Iconic Hearts Holdings, Inc. (formerly known as FullSenders), alleges that NGL acquired its trade secrets “improperly” as a result of a breach of duty by lawsuit defendant Raj Vir, an Instagram software engineer who had been working on Sendit on the side.

For those not keeping up with teen app trends, both Sendit and NGL are leading anonymous Q&A apps, a subset of social apps currently popular with a younger demographic. The apps have topped the app store charts for months, as anonymous apps normally do – before being imploded by bullies, lawsuits, or banned by the app stores themselves.

As of today, NGL is the #5 top non-game app in the US App Store. Since launching late last year, the company has generated more than $2.4 million in revenue, according to third-party estimates. Sendit’s apps are currently ranked #12 in social networking (Sendit) and #57 in social networking (Sendit – Q&A on Instagram) and have earned over $11 million, according to Sensor Tower data.

Both Sendit and NGL allow users to post links to their social accounts, such as Instagram or Snapchat Stories, which friends can click to send anonymous questions to the poster. (Think: “Who do you have a crush on?” and other teenage gossip.)

The recipient, in turn, receives the questions in the app’s inbox and can then post their answer on their social accounts for everyone to read. The apps monetize this activity by giving their users “hints” about the person asking the questions so they can figure out who asked what.

While NGL only focuses on anonymous questions and answers, Sendit offers two flavors of its service. The original app is aimed at Snapchat users and offers a variety of games alongside the anonymous Q&A feature. The newer app, meanwhile, brings anonymous questions and answers to Instagram. It was launched after Snapchat introduced stricter policies earlier this year that banned anonymous apps from using its developer tools. (Sendit has received an extension to comply with those guidelines, Snapchat informed us.)

However, the apps are problematic as they are proven to use deceptive tactics to trick their young users into believing that they are getting engagements from friends when they are not.

Both apps are also incredibly similar in terms of their visual design, how they work, their business model, and other aspects.

As it turns out, that may not have been an accident.

The recently filed Iconic Hearts lawsuit (see below) states that the company hired Vir to develop Sendit’s mobile apps back in September 2018. Vir then continued to consult with the company, it is said. In May 2021, Iconic Hearts began discussions with Vir to offer him a full-time position or allow him to continue as a contractor. But instead of taking the job, Vir took the company’s ideas and insights and built his own version of the Sendit app, the complaint says.

“Vir was instrumental in founding, building and launching ‘NGL – Anonymous Q&A’, an app that is nearly identical to and directly competes with the Sendit apps,” the filing reads. It also details how Vir used his friendship with Iconic Hearts founder Hunter Rice and his role as a Sendit developer and consultant to gain information about the company and its apps. (Apparently, Rice and Vir weren’t just business associates, they were friends — former high school classmates who bonded after college over their shared interest in engineering, according to the filing notes.)

During Vir’s time working on Sendit’s apps, he had access to inside information — such as which features drove the greatest user engagement and other future development plans, the lawsuit alleges. He also signed a developer agreement that prohibited him from using this information for any purpose other than his work with the Sendit apps, it said.

Rice believes Vir was never serious about the job he was offered at Iconic Hearts, the complaint further states, but instead used his constant access to build NGL, a copy of Sendit that launched on the App Store in late 2021 and soon to the App Store became App #1 in June 2022.

The filing explains how Vir had access to detailed app data and KPIs (Key Performance Indicators) and other metrics intended to help the app’s success. Because of its relationship with Sendit, Vir asked for and was granted access to all sorts of business data and metrics — like click-through rates, conversion rates, which prompts were the best performing, how they were ordered to generate virality, call-to- Action buttons, financial performance, MRR (monthly recurring revenue), churn rate, LTV (lifetime value), metrics related to average response rates, share counts, viral coefficients and much more.

Those business details included Sendit’s use of fake questions. The company had previously denied the use of bots when asked by TechCrunch.

Many users of Sendit and NGL’s apps had already suspected that some of the questions they received weren’t actually from their friends, but were generated automatically. The app stores are full of user reviews claiming that these apps trick them and then rip them off by charging for unhelpful hints — like those that only share a user’s city or what type of phone they have.

TechCrunch recently tested both NGL and Sendit’s anonymous Q&A system, generating a link for questions but then not showing it to anyone, and still getting half a dozen so-called “questions from friends” in our inboxes.

This feature is actually described in the new lawsuit as one of the many aspects of Sendit’s apps that NGL allegedly stole. Reads the complaint:

Iconic Hearts had also developed a unique system, “Engagement Messages,” that sends content to an inbox when interactions with the user have been inactive for a period of time. “Engagement Message” re-triggers a user to use the app. This creates more “shares” in the app, more density within a user’s trending network (ie more people sharing more often), contributing to an app’s saturation, the most important measure of success and growth. It took Iconic Hearts years of trying, testing, and iterating their product to fine-tune their proprietary engagement messaging system and various components of it, such as: B. the optimal period of time after which an engagement message should be sent and how the engagement message is pushed, the design of the engagement message and the content of the engagement message.

This section basically confirms users’ suspicions about the fake questions. We should think that it’s now also a burden for the app stores to take action, since none of the companies are telling their users that these “engagement messages” aren’t being sent by their friends, as the app’s description makes them believe would do.

Surprisingly, Iconic Hearts was unaware of Vir’s treachery until recently. As late as June 2022, Vir was still hiding his stake in NGL, the complaint said. The lawsuit alleges that Vir finally admitted his involvement to Rice on June 21, 2022, saying, “Okay, I’ll clear the air. I lied to your face the whole time. I build NGL”, and then, “Congratulations on becoming Head of Product at NGL.”

Huh if that’s true.

Neither party has responded to our requests for comment at this time.

It remains to be seen to what extent Iconic Hearts can legally substantiate its claims. The lawsuit seeks damages and injunctive relief. The lawsuit also names dozens of unknown defendants who may be working or partnering with NGL, who Iconic Hearts hopes the court will unveil and name.

ICONIC HEARTS HOLDINGS, INC. vs RAJ VIR; NGL LABS LLC; and DOES 1 through 50 from TechCrunch on Scribd

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