Gone South: S4|E11 - The Silicon Valley of The South

Release Date: December 18, 2024
Host: Jed Lipinski
Publisher: Audacy Podcasts

Introduction

In Season 4, Episode 11 of Gone South, host Jed Lipinski delves into the tantalizing rise and dramatic fall of a startup incubator in Opelika, Alabama, aptly dubbed "The Silicon Valley of The South." This episode uncovers the intricate web of ambition, deceit, and redemption entwined within the community-driven Roundhouse incubator, highlighting the profound impact of one individual's fraudulent actions on a small town's economic aspirations.

Setting the Stage: Opelika's Transformation

Timestamp: [01:26]

Emily Boss, an entrepreneurship graduate from Ball State University, relocates to Opelika, Alabama, in 2012 alongside her husband. Opelika, a modest town with a population of 30,000, had recently invested heavily in a citywide fiber optic Internet network, branding itself as Alabama's first gig city with a 1 gigabit per second connection. However, the exorbitant cost of $500 per month for the service resulted in minimal adoption, leaving Opelika's economic revitalization efforts stagnant.

Emily Boss: "I was a little concerned about moving here and I was really searching for connection in my community."
([00:57])

The Birth of the Roundhouse

Timestamp: [02:14]

Emily's quest for community integration leads her to discover the Roundhouse, a startup incubator founded by Kyle Sandler, a former tech executive. Sandler's vision was to transform Opelika into a vibrant hub for entrepreneurs by leveraging the town's high-speed Internet.

Jed Lipinski: "The space she found was called the Roundhouse... founded by a former tech executive named Kyle Sandler."
([02:14])

Emily's immediate recruitment by Sandler sets the stage for what promises to be a revolutionary endeavor for Opelika.

Kyle Sandler: The Charismatic Visionary with Hidden Agendas

Timestamp: [06:49]

Kyle Sandler emerges as the driving force behind the Roundhouse. With an enigmatic background, Sandler portrays himself as a Silicon Valley savant, claiming to have been an early Google employee and a serial entrepreneur with successful exits.

Emily Boss: "He was able to use these big words that Silicon Valley kind of startup tech people would use... not the type of language that you would hear in Alabama."
([06:20])

However, Sandler's claims are later revealed to be fabrications, casting a shadow over his credibility.

The Arrival of John McAfee: A Double-Edged Sword

Timestamp: [13:55]

In a bid to elevate the Roundhouse's prestige, Sandler partners with the notorious software mogul John McAfee, who was embroiled in legal troubles in Belize at the time. McAfee's involvement brings significant media attention but also unwanted controversy.

Emily Boss: "John McAfee had an extremely powerful, commanding voice... but also, you were just kind of like, couldn't stop watching it or listening to it."
([15:05])

While McAfee's presence initially adds gravitas and attracts investors, a poorly timed photograph of him brandishing firearms outside the Roundhouse undermines Opelika's professional image.

Kyle Sandler: "I don't remember if I had told him that I went to Google or worked at Google or if other people had told him..."
([05:16])

The RecMed Startup: Hype Without Substance

Timestamp: [18:29]

RecMed, a startup incubated within the Roundhouse, becomes the poster child for Sandler's ambitious plans. Founded by 13-year-old Taylor Rosenthal, RecMed innovates first aid vending machines tailored for sporting and amusement events. Sandler capitalizes on Taylor's youthful ingenuity, orchestrating media coverage that falsely inflates RecMed's market potential.

Kyle Sandler: "We ended up doing all of the media while we're in New York."
([19:35])

Despite initial interest from major retailers like Johnson & Johnson and Walgreens, RecMed fails to secure the promised deals, revealing the lack of substance behind Sandler's claims.

The Collapse: Unmasking the Fraud

Timestamp: [25:14]

As RecMed stagnates and investor concerns mount, Sandler's elaborate facade begins to crumble. Emily Boss confronts Sandler about the dwindling funds and inconsistent narratives. A pivotal shareholders meeting exposes Sandler's deceit when he presents a fake Fidelity report to reassure investors.

Emily Boss: "That is fake. That isn't real. That isn't real, Kyle. You're not real."
([27:04])

Investigations reveal Sandler's fabricated history and misuse of investor funds, confirming his fraudulent activities.

Jed Lipinski: "He'd been convicted for attempted theft and forgery in 2010... there was no evidence he'd ever worked for Google."
([30:16])

Arrest and Consequences

Timestamp: [31:11]

After an extended investigation, Kyle Sandler is apprehended in Texas and subsequently pled guilty to wire fraud and securities fraud. He is sentenced to five years in federal prison and ordered to repay $1.9 million to defrauded investors.

Kyle Sandler: "So when I was sitting in the county jail... I wrote her a letter apologizing to her for lying to her so much..."
([33:25])

Redemption and Rebuilding: Colab Opelika

Timestamp: [34:35]

Despite the trauma inflicted by Sandler's betrayal, Emily Boss spearheads the rehabilitation of the Roundhouse into Colab Opelika. With renewed transparency and community trust, Colab Opelika flourishes, expanding its reach and supporting nearly 200 members across multiple locations.

Emily Boss: "What it is now is just like the most beautiful, most proud thing I can be of... I did."
([35:20])

Colab Opelika stands as a testament to resilience, transforming past failures into a thriving ecosystem for local entrepreneurs.

Conclusion

Episode 11 of Gone South intricately weaves the narrative of ambition turned deceit and eventual redemption in the heart of Opelika, Alabama. Through the lens of Emily Boss's experiences, listeners witness the fragile intersection of hope, trust, and betrayal within a community striving for economic revitalization. The episode underscores the importance of due diligence, community integrity, and the enduring spirit of entrepreneurship.

Notable Quotes

• Emily Boss: "He used me to do that. And that's what I felt like he robbed from me was I became very closed off from the world."
  ([34:21])

• Kyle Sandler: "I was, you know, acting as if I was truly this big tech savant that had just transplanted myself into Opelika."
  ([11:00])

• Jed Lipinski: "If you have information, story tips, or feedback you'd like to share with the Gone South team, please email us@gonesouthpodcastmail.com."
  ([35:56])

Final Thoughts

Gone South effectively captures the essence of Southern entrepreneurship's challenges and vulnerabilities through the Opelika Roundhouse saga. It serves as a cautionary tale about the allure of rapid growth and the critical need for transparency and integrity in fostering sustainable community development.