How Did Linus Media Group Get it so Wrong: A Mini Case Study

Two Weeks ago, Linus Sebastian, former CEO of LMG made an appearance on an apology video. Through puffed red eyes, he acknowledged there were issues within the organisation and told his audience of 15.4 million that he made some wrong decisions and changes were imminent.

Terren Tong, the newly appointed CEO, emerged from relative obscurity to assume a pivotal role in soothing concerned stakeholders. He hastily navigated through a carefully scripted apology, likely realising the gravitas of the situation as he faced millions of viewers – only 6 weeks into the job.

Yvonne Ho, the CFO and major shareholder’s voice quaked as she told her audience that content release was going to be stopped for the first time in 12 years.

So how did LMG get here?

A week prior to the apology video, Stephen Burke of Gamers Nexus (lovingly called Tech Jesus) released a 44-minute video called The Problem with Linus Tech Tips. In it, he outlined numerous issues with content quality, accuracy, and ethics at Linus Media Group (LMG). The video provided compelling evidence of systemic problems at LMG, specifically their Linus Tech Tips YouTube channel and associated properties.

While LMG has faced some criticism of these practices previously, this video represented the first time the problems were presented in detail to a wide audience by a major credible voice in the YouTube tech space. Obviously, it went viral.

Rushing Content and Sacrificing Quality

A major theme throughout the video was that LMG seemed to prioritise quantity over quality. At circa 25 videos a week, there were frequent examples of errors, misleading data, lack of fact checking, and failure to follow up on mistakes before publishing.

Many LMG employees interviewed noted restrictive time constraints and pressure to publish constantly without time for review and improvement. As one stated, “I wish we could back off the amount and focus on quality for a bit." It was evident that LMG appeared to value rapid publishing over ensuring accuracy.

This rush to publish was the source of too many errors. Nearly every LMG review in the past year contained mistakes, with charts showing impossible or inconsistent results. In one case, a 300% benchmark increase made no sense, but LMG still used it in conclusions. They failed to double check settings between tests, allowing major variances.

LMG’s initial response was a hasty dismissal of the criticism and costly doubling down on their practices.

The most damning of these instances concerned Billet Labs. Billet Labs is a 2-man operation that sent their prototype product to LMG for review. Linus publicly tested the product with incompatible hardware which resulted in poor product performance. Despite the company's pleas, LMG refused to re-test properly and trashed the product's quality. LMG then sold the prototype (and therefore Billet Labs’ IP)!

When asked about this, Linus defended LMG’s actions - citing that they hadn’t sold it, they’d only auctioned it. And that retesting the product might cost up to 500 dollars of employee time arguing that that was not a good use of funds. The consequences of his actions were about to prove much more costly.

What Went Wrong?

LMG first started out as a one-man band. Linus Sebastian rose to fame by creating captivating videos reviewing gaming PC hardware. He was fun to watch, had a great on-screen presence and appeared to know what he was talking about. He wasn’t afraid to say it how it was and his cult following grew from tech enthusiasts to the mainstream consumer wanting to know what hardware they should drop their hard-earned cash on next.

With growth came wide eyed excitement and Linus Tech Tips became the multi-channel Linus Media Group. Earlier this year, Linus announced that his company was worth 100 million dollars. The humble kitchen, which once served as the backdrop for a tech-tips channel was soon replaced with a vast tech lab and carefully contorted studios for the LMG corporation.

The marketing was done, and the manpower recruited, but processes were not scaled in line with the growth of the company. Whilst Linus might have gotten a pass for the occasional mistake or a maladjusted opinion, LMG had a responsibility to its consumers, brands, and serious tech reviewers they shared a platform with. They were now influencing markets. They had pivoted into authoritative testing and reviews without any understanding of the importance of diligent testing - or maybe they did understand it, but they just didn’t care. The audience was split.

A quick peak under the hood would reveal to anyone with a rudimental understanding of business that LMG was on shaky ground, the waters were turbulent, and the raft was on fire. Perhaps that’s why they brought Terren Tong in to scale the company. Whatever, it was too late.

Systemic Process Failures Enabling Mistakes

Behind many of the quality and ethics issues appeared to be a lack of adequate processes and oversight at LMG. This enabled recurring problems to persist.

For example, every video went through an approval chain, but mistakes spotted pre-release were only addressed through on-screen text. The original faulty analysis still made it to conclusions, making approvals ineffective.

Likewise, post-release corrections were relegated to fine print comments, without taking down videos containing egregious errors. LMG doubled down on mistakes rather than conducting retests when called out publicly. Like when they posted an entire video about a gaming mouse which they heavily criticised for having a terrible friction co-efficient. It turned out that they had failed to notice that the white protective film was still on the Teflon feet of the mouse. ?There was no process to repeat the test or take down the video.

There seemed to be no standardised testing procedures either. This resulted in inconsistent, often incorrect data with no quality checks.

LMG also lacked inventory controls, accidentally auctioning off a prototype they agreed to return.

It also appeared that the company didn’t have internal processes for dealing with sexual assault in the workplace, outside of, “put on your big girl pants”, or be more “assertive”. But that’s for another day, and the merits of these complaints is now pending a third-party company investigation.

The biggest issue was that there was no process for retrospection. If an error type had been flagged in one project, there was no obvious process to ensure it didn’t happen again. Ethics and quality control were deprioritised in favour of a quick profit.

How it should have gone

If it isn’t already clear, the issue here is all about scaling responsibly. LMG missed the mark and were rightly called out for it. Here are some things LMG could have done to prevent a critical situation:

1. Stringent Fact-Checking: LMG should have instituted a rigorous fact-checking process, overseen by experienced editors, to ensure the accuracy and integrity of all content before publication.
2. Clear Approval Guidelines: Clearly defined approval responsibilities for each reviewer would have helped maintain accountability and prevent errors from slipping through the cracks.
3. Accountability Framework: Developing a transparent accountability framework that outlined who is responsible for what tasks would have prevented organisational breakdowns and confusion.
4. Regular Process Reviews: Consistent and periodic reviews of documented processes would have helped identify and rectify shortcomings before they escalate.
5. Expert Science Team: Building a robust science team well-versed in tech testing requirements and ensuring the consistency of those requirements was essential to maintain credibility.
6. Quality over Speed: Reducing the pace of content publication for the sake of improved quality control would have ensured that accurate and reliable information reached the audience.
7. Scalable HR: Establishing an internal HR team capable of scaling with the company's growth was crucial for effective personnel management.
8. Materials and Hardware Handling: Developing robust processes for the handling of materials and hardware, especially as inventory increased, could have prevented costly errors and delays.
9. Conflict of Interest Policy: Implementing a clear policy for managing conflicts of interest and ensuring unbiased reporting was essential. Investments in covered companies should have been divested or avoided altogether.
10. Media Strategy: Adopting a proactive media strategy for addressing public criticism, instead of doubling down or ignoring it, would have helped maintain trust and transparency.
11. User Feedback: Treating users as stakeholders and taking their feedback seriously was vital. Understanding the impact of user feedback on the business would have driven improvements and prevented recurring issues.

What now?

Since the viral video, Linus Media Group has pledged sweeping reforms to address concerns about quality, ethics, and company culture. In a direct video response, Chief Vision Officer, Linus Sebastian laid out numerous specific changes already underway or planned across all areas of the company's operations.

On the content side, LMG aims to boost quality control through reduced output, allowing more time for accuracy checks. Videos containing clear errors now face stricter fixes, including cancellation or reshooting. The company has published full testing methodologies and open-source gaming harnesses to increase transparency. An "error checking squad" of community members will also be invited to scrutinise videos.

Regarding business practices, LMG has committed to more transparency around sponsorships, inventory tracking, and handling complaints. The company emphasised extensive HR resources already in place but say they will continue expanding manager training and mental health coverage.

To address workload concerns, Sebastian disputed "sweatshop" claims but says he still aims to cut content workload significantly during this reform period to reduce pressure on staff.

The breadth of promised changes shows LMG is taking the matter seriously. Follow-through in coming months will prove if reforms can truly transform policies, practices, and culture to meet rising expectations.

And finally, the new CEO has his work cut out. While promising first steps are underway, substantial reforms remain needed to truly transform LMG into an outlet renowned for integrity over profits. The public spotlight demands higher standards. Consumers and partners deserve an LMG focused on ethics and accuracy above all else. The coming months will reveal if they are up to the challenge.