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This is part six of a series of posts about successful fad diet site Kimkins.com and its mysterious and controversial creator, “Kimmer,” or Heidi Kimberly Diaz. My wife Catherine was Heidi’s business partner in the founding of the Kimkins.com site. You can find the first post and table of contents here.

Heidi spent July and August of 2006 alternating between manic promotion of the Kimkins.com site and periodic frustration over the demands of her members on her time and attention. By mid-August, Catherine had seen enough that her initial respect for Heidi was a distant memory and she was increasingly unhappy in the partnership. She was walking on eggshells to avoid unnecessarily triggering Heidi’s irritable moods.

This unhappiness accompanied a worry that had been forming in Catherine’s mind. In negotiating the partnership agreement, Catherine and Heidi had agreed in their contract that Heidi could buy out Catherine’s interest in the partnership at any point in the first 12 months of the Kimkins.com business for a certain lump sum. After 12 months had elapsed, the contractual buyout price would change to an amount equal to Catherine’s share of the profits for the trailing 12-month period immediately preceding the buyout.

Kimkins.com had exceeded expectations in two ways: it was both more profitable, and far more work, than either Heidi or Catherine had anticipated. Kimkins.com was more than a full-time job for both of them. The bottom line was this: because of profits that exceeded far exceeded expectations, if Heidi bought Catherine out in month 12, she would pay just a small fraction of what the buyout would cost in month 13.

By late August, Catherine had become thoroughly sick of Heidi, her moods, and the way she did business. There was no love lost; it was obvious that Heidi was only tolerating Catherine’s presence and influence in business decisions because of the work and technical expertise Catherine was contributing. A suspicion was becoming a certainty: Heidi would avail herself of Catherine’s presence as a business partner until nearly the end of the 12-month period and then buy her out.

Catherine decided to be proactive and demand a renegotiation of the buyout clause. Catherine told Heidi that she could not continue to devote all her time in return for such an undervalued interest in the business, and she requested a more equitable buyout. She felt that there was a good chance that Heidi would opt to buy her out right away, and she looked forward to getting out of the partnership. As she anticipated, and to her relief, Heidi soon announced that she was exercising her option to buy Catherine out.

The details of the transaction were set out and all the business assets were conveyed at the end of September 2006. Between her share of the site profits during her tenure and the buyout lump sum, and based on a 50-hour average workweek during the time she was involved with Kimkins.com, Catherine made just over $10 an hour for her time launching and developing the business. However, the education and life lessons she acquired were tremendously valuable.

Catherine was happy to be out of the partnership on what seemed at least to be civil terms. Heidi had made a show of being polite and gracious toward Catherine. It’s amazing how women who dislike one another can go through the motions of being nice, but Catherine had no illusions about Heidi’s real feelings. She was, however, somewhat taken aback when she realized that her Kimkins.com membership had been cut off a few days after the buyout was final. Shrugging it off as Heidi’s prerogative, Catherine moved on with other projects.

Then Heidi did something so inexplicably vindictive and downright wrong that Catherine has not forgiven her: she attempted to smear Catherine’s honesty and integrity to Kimkins.com’s most successful affiliate, Jimmy Moore.

To provide a little background, when Jimmy joined Kimkins.com as an affiliate he requested payment by check instead of PayPal. Since she knew Jimmy would be a valuable affiliate, Catherine made an exception to the PayPal-only rule and agreed to cut a check for him every month and mail it from our home in Europe. The final affiliate payments from Catherine’s last month with Kimkins went out on October 5, 2006, and Catherine mailed Jimmy’s check as usual.

On October 7, 2006 Jimmy wrote to Heidi to inquire about his affiliate payment arrangements now that Catherine was gone.

Heidi replied, with a copy to Catherine, on October 8 [emphasis added]:

She [Catherine] assured me that all affiliates were paid at the end of September. She sent me an Excel spreadsheet which I have been unable to open so I don’t have an accounting of September expenses, including affiliates. I hope everyone was paid!

Catherine responded to both Heidi and Jimmy, again October 8:

The check went out as it usually does last week to Jimmy. All the other affiliates who were owed money by the Kimkins affiliate program were paid via PayPal, even the affiliates who had not yet reached their minimum, as per our agreement Heidi. I will forward the PayPal receipts to you if you’d like since you seem to be uncertain about whether the payout took place.

Heidi, this is the first time you have followed up with me about your access issue with Google spreadsheets since you mentioned the day of the Kimkins handover transaction that you had a one-time problem logging in. I had assumed that it was resolved since I had not heard from you! Please let me know what email address you are using to access Google spreadsheets and I’ll make sure you can get in or send you a file copy instead.

I am frankly surprised, Heidi, that you would use such a tone about the issue when you have not informed me that you were still unable to get into Google spreadsheets. My receipts and books regarding Kimkins are open and if you need further documentation about ANYTHING let me know.

Jimmy, it was a total pleasure working with you! As in the past, if you do not receive your check by the third week in October let me know and I’ll get it reissued to you. The amount for September was $287.52. Heidi has possession of the affiliate program and database if you need details. If she is still using the same software, affiliates have a log in and are able to go in and see their reports at any time. I’m sure Heidi would be happy to help you out with that if you need your log in reissued.

To which Heidi replied on the same date [emphasis added]:

Jimmy, I apologize for you being in the middle. I received the password for the affiliate program and no training or guidelines. From what I see you earned $655 last month, but Catherine has a different figure. I’ll research it and make up and difference owing.

Catherine was shocked. We wondered, why would Heidi lie about such a thing? There was nothing to be gained by attempting to damage Catherine’s reputation in this way and, with Catherine in the know about many of Heidi’s lies and manipulations, it would seem that there was much to lose. My opinion is that some people are just wired that way — to react first by lying instead of telling the truth, and by being mean rather than being kind.

Catherine had had it, and after defending herself and offering full disclosure of all financial records to Jimmy (an offer that stands to this day) she wrote to Heidi on October 8:

I am really aghast at how you are behaving with Jimmy and I simply do not understand it. I have always been 100% honest and forthright in my business dealings with you and the Kimkins affiliates and I have the records to prove it, so in the end you are going to make yourself look bad to try to imply otherwise.

If this slanderous behavior continues on your part I will have no choice but to defend myself with the truth. If necessary, I will publish a full accounting of our business dealings and records (minus the members’ identifying details of course) and forward it to our affiliates, the IRS, and Social Security Disability Insurance authorities.

To the best of Catherine’s knowledge Heidi backed away from her smear campaign with Jimmy once Catherine stood up for herself in this way.

The check, of course, arrived in the mail late and was cashed by Jimmy without incident.

NEXT: Kimkins.com Part VII - Business Lessons Learned

This entry was posted on Friday, July 27th, 2007 at 11:54 am and is filed under Business, Ethics, Kimkins Diet, Kimkins.com, Internet Startups, Partnerships, Medical/Health, Diet Industry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.