Factory fires board observer over Cognition talks
Matan Grinberg says the advisor sat in board meetings while talking to Factory's largest competitor.
Matan Grinberg says he terminated Christopher Degnan's roles as Board Observer and Advisor to Factory, after more than a year of service, over what he calls unethical conduct involving Cognition, the company behind Devin.
It feels as though ethics is being thrown out of the window in the AI era.
Our team has 10x’d in size, while our revenue has 100x’d year over year.
Grinberg's account of the sequence is specific. Degnan had earlier told him he had a casual conversation with an executive at Cognition AI. When Grinberg questioned his intentions, Degnan reassured him that, ethics aside, he had "made too much money" and was "too lazy to go work for Cognition." Grinberg says he believed him. Then on Monday, Degnan spent time advising the Factory team on a handful of confidential board-level matters. That evening he called to say the conversation that had been described as casual and one-off was actually formal and recurring, and had been going on for weeks while he sat in board meetings and advised leadership.
Grinberg says Degnan was subject to confidentiality obligations tied to his work with Factory, and that Factory does not know the extent of what was shared. He adds that the disclosure puts Degnan's timely questions about the product roadmap and the parity gap in a new light. He also says Cognition engineers feigned interviews with Factory to pry information about its product, and, not finding what they were looking for, went after people with direct knowledge of Factory's most confidential plans.
The numbers in the same post
Buried in the middle of the statement are the growth figures. Grinberg says Factory's team has grown 10x in size and revenue has grown 100x year over year, off what he describes as overwhelming interest in its model-agnostic coding agents and its software factory product. He calls the momentum unprecedented. He also claims Cognition, which he describes as a much larger competitor, has fallen behind Factory on the capabilities that matter most to customers, namely cost, quality and security.
Treat both sets of claims as one founder's version of events. Multiples without a starting number tell you nothing about size, and a company going from a tiny base to a small one can honestly report 100x. Neither Degnan nor Cognition has responded anywhere in this source, so the only account on the record is the one from the person who did the firing.
The reason to care is less about Factory than about how thin the walls are right now. Board observers and advisors get roadmap detail precisely because the relationship is assumed to be safe, and in a market where two coding agent companies are chasing the same customers, that assumption is doing a lot of unpaid work. If you are handing confidential plans to a friendly advisor, the paperwork is the only thing you actually control.