Scott Jones Got Rich Inventing The Next Big Thing. Can He Reinvent Himself?
“I’m not sure I want this written all over the place.”
Scott Jones delivers this verdict not long after he settles into a booth at Chatham Tap, the sports bar on the campus of Butler University. Bags droop beneath his suddenly wide eyes, and his face is rounder than it once was in the professional headshots and file photos that regularly popped up in The New York Times, The Wall Street Journal, and Fast Company. It is an uncharacteristic thing for one of the city’s most swaggering entrepreneurs to say. The world’s business writers have chronicled his monied conquests in a career spanning more than three decades: At 25, he was a founding partner in Boston Technology, the company that made voicemail stick. He later founded Gracenote, the music search company he sold to Sony for $260 million and some of the technology that powers iTunes. He was an early investor in Art Technology Group, the ecommerce giant that Oracle would later purchase for $1 billion. And in 2005, he was the mind behind ChaCha, the human-powered, text-based search engine backed by Jeff Bezos and whose data was acquired by either Apple, Amazon, Microsoft, or Google. (Jones won’t say which one.)
Jones’s voice lowers, as if he has a terrible secret to share—the kind better left out of braggadocious and tightly lawyered press releases. “I’m in the middle of the fucking worst divorce you can imagine,” the 60-year-old tells me. “It’s not done, and we’re at rock bottom.”
Jones says he has $1,332 left in his checking account. He says he owes his parents, Barbara and George Jones, more than $1 million in loans and credit card companies some $140,000.
“People don’t know?” I ask him.
“They don’t know,” he says.
In the last five years, Jones has spent the last millions of his once-vast personal fortune of more than $400 million and has a negative net worth.
It is a stunning reversal for a man who owned an English manor house MTV dubbed the “Home of the Decade”—he beat out 323 houses, including ones owned by 50 Cent and Russell Simmons, along with the Hugh Hefner Playboy Mansion and Mariah Carey’s Art Deco apartment. Kim Kardashian presented the award. “Their teched-out masterpiece is the all-time, ultimate place to hang out,” Kardashian says in the 2009 awards episode. “Congratulations, Joneses. I got to keep up with the Joneses instead of the Kardashians.”
A six-foot-six-but-awkward basketball player who moved here from Kentucky with his parents during high school, Jones wasn’t good enough to play at North Central, so he taught himself how to build computers. A fixture on the pages of Indianapolis Business Journal and on Inside Indiana Business, Jones is a power player who bends the ear of Indiana Speaker of the House Todd Huston and who can get an audience with current Gov. Eric Holcomb or former Gov. Mitch Daniels, with whom he crusaded around the state in the early 2000s to advocate for daylight saving time. Though the spigot of his campaign contributions has recently run dry, Jones has doled out nearly a million in political donations to state Republican politicians and committees since 1999. He was pivotal in landing Indianapolis International Airport with more nonstop flights, including lobbying for those to Austin and San Francisco.
In Indiana lore, Jones ranks among the state’s most prominent movers and shakers. Think that’s business-press spin? It’s from the Indiana Historical Society’s list of Living Legends, honored for their accomplishments.
To some, Jones was once an avatar of the nouveau riche pouring into Carmel. Neighborhood children visited his kids at the mansion and played. Socialites flocked to the home for soirees. A spiral mahogany slide that took a boatmaker a year and a half to build once deposited riders to a well-stocked bar at the bottom of the run. “Some people would take the slide to get to the bar,” he once mused, “and others had to get drunk at the bar to do the slide.”
To others, including would-be and former investors from around the world, he’s the guy who, in 2013, found himself as one of the earliest main characters of Twitter when his soon-to-be ex-wife Vee Lee, a poker player who has won tournaments in Las Vegas and Atlantic City, stormed into ChaCha headquarters to accuse him of cheating on her with an employee, a charge Jones denies.
Through it all, Jones has exemplified local-boy-and-girl make-good stories advanced by Indiana’s flat power structure. “I always go into an industry that I don’t know, and I figure it out because I know that I will be able to see things that those who are entrenched won’t see,” he says. “That’s how I disrupt.”
These days, events have been disrupting Jones. In February, AES (formerly IPL) shut off the electricity at the home he rents—this, despite the $21,000 monthly income he takes home from his coding academy nonprofit, Eleven Fifty.
What happened? “I’ve never had my utilities cut off anywhere ever, even when I was 18,” Jones says. “At no point in my life have I ever had anything shut off. Now, one reason they got it to shut off is that they were sending those bills to the old house, and I wasn’t getting them. I had no idea when I was in arrears. I was like, How could this be happening?”
A better question might be: How did the developer of three of our most ubiquitous technologies—voicemail, digital song searching, and the first virtual personal assistant—go broke?
The turn-of-the-century English country manor on West 116th Street in Carmel was perhaps Jones’s greatest creation. With seven bedrooms and 28,000 square feet spread out on 24 acres, it was also one of the loves of his life that would bleed him dry.
When he first moved into the house at the tender age of 35, Jones was a Hoosier transplant from Louisville who went to Indiana University after graduating from North Central High School. The son of a journalist and the vice president of a hospital, he planned to go to medical school, but after six years in Bloomington, he hadn’t finished his undergraduate degree. Around that time, Doug Hofstadter, an IU professor of computer science who was a Guggenheim Fellow and a Pulitzer Prize winner, secured an appointment at MIT. Jones, who was house-sitting for Hofstadter, begged the professor to take Jones with him as a graduate assistant. Hofstadter declined, instead selecting one of Jones’s friends. Undeterred, Jones followed them both to Cambridge for a week or two, and talked his way into a research scientist job at MIT’s artificial intelligence lab. He stayed there for two years, finishing his undergrad by correspondence. If Hofstadter made an impression on Jones, Jones didn’t leave one on Hofstadter. “I don’t have any recollections of interest of Scott Jones, sorry to say,” Hofstadter told me.
Two years later, in 1986, Jones started the voicemail company Boston Technology with his partner, Greg Carr. While Carr focused on the business plan, Jones concentrated on the technology. The two financed the company’s first $50,000 with credit cards. They weren’t the only voicemail operation at the time. AT&T, Northern Telecom, and IBM all had voicemail offerings. But Jones designed a new way to scale voicemail and store millions of people’s worth of calls on a disc drive.
Six years after perfecting the technology and flush with cash, Jones bought the 116th Street property. Furnished with a $9,250 Tyrannosaurus rex skull and a Steinway grand piano, the home featured an indoor basketball court, a 25-foot-long saltwater aquarium, and a knock-you-down waterfall shower. Walls hid secret passageways. A 4,000-pound brass tub sprawled across the master bathroom. In addition to gracing several MTV Cribs episodes, the Jones manse made appearances on a variety of HGTV shows and Mega Mansions. It took seven years and $20 million to build and millions each year to operate.
Meanwhile, Jones went on a hot streak. He founded Gracenote in 1998. A music-recognition company before the digital age, it racked up investments from boldfaced names in private equity, including Sequoia, Bessemer, Sony, Philips, and Samsung. The software would go on to become a pivotal part of iTunes.
Jones moved back to Indianapolis from the East Coast in 1997. The Indianapolis business community swooned. “He didn’t invent voicemail, but his patented technologies really allowed for voicemail to become prominent everywhere,” says Gerry Dick, who, when Jones returned home, was on the verge of launching the television show and digital platform Inside Indiana Business to chronicle the state’s growing entrepreneurial scene. “That was a big deal, to have a guy connected to voicemail move back and establish his home and do things in Indiana. That was a cool thing to say. ‘Hey, look. Look what we have here in Indiana.’”
Almost immediately, Jones began to remake Indiana as he thought it should be, including launching an effort to get the state on daylight saving time, traveling the state and working with former Gov. Mitch Daniels on the issue.
In 2001, after Jones’s divorce from his first wife, People named him one of America’s top 50 bachelors. (Jones has been married three times and has six children.) In 2011, he married Lee, the poker player he met on Match.com.
Lee’s background captured Jones’s attention. Lee was born in a refugee camp after the Vietnamese rescued her mother from the Khmer Rouge in Cambodia, but grew up in Philadelphia. “How many 90-pound Asian women can walk into the Bellagio high-stakes room and sit down with a bunch of middle-aged white men and take all their money in an hour?” Jones says.
In 2005, Jones founded ChaCha, a text-based service that Jones frequently explained was “like calling a smart friend.” You could text a question and get a response in minutes. Though the concept drew an investment from Bezos, there were problems with the idea. “It was predicated on the idea that smartphones were terrible for the internet,” a former employee told me, citing the difficult-to-use Blackberry, which was ascendant at the time. “[Jones] launched this idea that was brilliant, but the iPhone came out next year. Batteries got better. Speeds got better.”
Still, that didn’t slow down Jones. In a community where people with money typically keep it close to the vest, the entrepreneur cut a different figure. He once held what was Indiana’s largest-ever fundraiser for then-Gov. Daniels in 2008 at the 116th Street estate, raising $1 million in one night. Daniels rode into the fundraiser on his Harley; attendees retired to Jones’s private theater. Jones hired Ray Charles to perform at his 40th birthday party. When he would land at the airport in Indianapolis back from a business trip or vacation, he would have two different aides-de-camp arrive: one to pick him up and whisk him back home, and another to take care of collecting his luggage from the baggage carousel in order to save him precious time. Back at home, he had two IT staffers, a chief of staff, and personal accountants to attend to his affairs, not to mention a fleet of other household staff who were charged with preparing the guest quarters for the arrival of business associates such as Bezos, who stayed there as he was investing in ChaCha. “I think [Jones] enjoyed the spotlight that was on him,” Dick says.
Jones held legendary Super Bowl parties at his mansion, and it wasn’t uncommon for a Pacers player to show up. He was equally over the top in his philanthropy, funding the roller coaster at the Indianapolis Zoo. For Christmas, he was known to send out gifts to a network of more than 400 contacts. One year, he gifted copies of Al Gore’s Oscar-winning documentary, An Inconvenient Truth.
Then, in 2013, things began unraveling for Jones professionally and personally. Though ChaCha was backed by some of the world’s biggest venture capital firms and investors, the service was struggling to find a business model. It was answering billions of questions via text messaging, the web, and smartphone apps, but the company wasn’t profitable.
That July, Jones’s personal life spilled into the headlines. Lee took to Twitter to accuse Jones of having an affair with a coworker in a spat that lit up the internet and made headlines across the globe. “It’s been over 24 hours since I found out the love of my life was capable of deceit,” Lee wrote on her blog. “We weren’t a story book match made in heaven… But I honest to god love him with all I know.” Lee approached the woman at work. “I confronted her @chacha in her office in front of everyone and asked if she was sleeping with my husband. She didn’t deny it, just hid:-/,” one tweet in the thread read. Across Indianapolis, followers hung on her every character as she let fly with bawdy accusations. “You blew him for a michael khors bag? Bitch I would’ve got you a MK bag just to leave us be… Jeeesh.”
The woman sued Lee over tweeting about the alleged affair and won an undisclosed settlement in 2015.
The episode tanked Jones’s credibility with investors, as he tells the story, but year after year of ChaCha’s losses didn’t help. “All my investors said, ‘Well, did you?’” he says of the alleged affair. “It was the ‘Me Too’ thing before ‘Me Too’ was around. And absolutely not. Even my attorney asked me. My attorney for decades said, ‘Well, did you?’ My investors at the time, which were some of the top players in the world, said, ‘We believe you, but my partners will not let us have anything to do with you anymore.’”
By 2016, his marriage on thin ice, Jones decided to pull the plug on ChaCha and focus on Eleven Fifty, a startup coding academy named after the address of his mansion. He started the 501(c)(3) nonprofit with a $2 million donation from his Scott A. Jones Foundation, a catchall charity he developed. (Jones used the same foundation to fund the Dinosphere exhibit at The Children’s Museum of Indianapolis.) High school and college graduates could go through a part-time or full-time multiweek coding course and double their salary. As of 2019, according to its own data, the nonprofit boasts a $54,000 starting salary for graduates with a 70 percent placement rate.
Jones hosted students at his mansion, which was still sucking away money with its demanding maintenance and staff-intensive upkeep. “When things were getting bad with ChaCha, I was raising more capital and putting in a lot,” Jones told me. “I mortgaged my house, which I had never had to do, but I had already burned through $30 million of cash and I needed more.”
In 2017, fresh off the failure of ChaCha, Jones decided he needed a new start. Lee and their children were already living in Hawaii, more or less. In a move ballyhooed by The Indianapolis Star, Jones, still married to Lee, gave up jet-setting and moved to Hawaii. He already rented a second house there, 10,000 square feet that overlooked the Pacific Ocean. “People are much more considerate of others here, and generally just happier here, by a large margin!” Jones told the Star.
Jones had a yard sale. He put his beloved English manor for sale, listing it at $4,995,000. “Everything must go,” John Ross, Jones’s publicist, said. “This will be a nice opportunity for people to see how the other half lives.” Jones sold the T-Rex skull for $9,250. The entrepreneur gave up some of his books, including Dr. Laura Schlessinger’s Ten Stupid Things Men Do to Mess Up Their Lives. Half-empty bottles of Windex went for 50 cents.
In the newspaper interview, Jones seemed ebullient. “I’m inventing ‘my next big thing,’” Jones dished to the Star. “Not much I want to say about my next big thing,” he added, “other than to say we are making excellent progress on a stem-cell solution for strokes and ischemic events, especially during heart surgery, where mini and major strokes are a common side effect. And I am also working on a nano-technology and MEMS project that could be world-changing, but it’s still early in the incubation process!”
But the cheery article in the Star belied a bleaker reality. As Jones tried to settle into Hawaii, he says he continued to feed money to the house back in Carmel and Lee’s businesses—a swimsuit company, then a lingerie site, and a soap company. (Lee says she funded the ventures with her own money: “I grew up in poverty and I don’t expect handouts.”) Jones bartered with the bank. “I mortgaged my house and basically lost it,” he says. Jones offered a deed in lieu of foreclosure to the bank—after Jones had invested $20 million of his fortune into the mansion over a period of 20 years.
“To live there on a skeleton budget is a half a million dollars a year,” Jones says. “And when it’s operating with staff, it’s like two and a half, three million a year. You look at these other estates like Simon Estate and Lucas Estate. It’s millions of dollars a year. And I hung onto that house while I was in Hawaii, still paying everything, including those utilities that caught up with me.”
His marriage sagged under the weight of constant disputes with Lee. In 2019, according to claims in court documents, Lee wanted Jones to drop LSD together to celebrate their 10th anniversary. Jones says that was the last straw. Lee denies Jones’s version of the story and says he took a joke out of context . Both accuse one another of affairs and drug use, which both also deny. Lee beat Jones to filing for divorce. A court date looms this month. Without his own vehicle, Jones is driving his elderly father’s 2008 Toyota Tundra around Indianapolis.
According to disclosures in court financial documents, Jones’s household budget is running a nearly $5,000 deficit each month. His income from Eleven Fifty—Jones draws a $21,075 per month salary—doesn’t do enough to offset $25,639.18 in expenses. In a brief interview with IM, Lee claimed Jones is “hiding money with his parents. He claims he’s borrowing from them, but it’s money he’s given to his parents for hiding.” Jones denies this.
Jones’s presence in Indianapolis provided the veneer of external validation for which Midwesterners so deeply pine. And he, more than anyone else, capitalized on that low self-esteem. “We should be the show-me state, not Missouri,” Jones says. “In Indiana, there’s still a big dose of, ‘Well, we want to be validated by someone else. We want someone from the outside to tell us we are doing something right.’ And it’s shifting, but there’s still a big component of that. That plays into a lot of what I’ve done. Knowing that, I do try to get outside validation. Because if I say, ‘Jeff Bezos invested in ChaCha,’ that played really well in Indiana, as opposed to saying, ‘Here, I got these three relatively famous Hoosier investors.’ That’s like nothing.”
But if Indianapolis was the perfect spot for Jones’s rise—the ideal location for a big fish in a medium-sized pond—it is also the perfect one for his fall. It’s among America’s best places to ride out both scandal and failure. Hoosiers gossip, yes, but they don’t gawk.
Matt Hunckler, a former Jones mentee who worked with him at Social Reactor, a startup within ChaCha, says he’s somewhat surprised at Jones’s financial predicament but conceded such a setback is more common outside of Indiana. “This is kind of a pattern for those genius-like people,” he says. “That is uniquely Scott.” Hunckler, the CEO of PowderKeg, which helps startups succeed beyond Silicon Valley, partners with Jones on talent development.
Dick, the business journalist, who played a role perhaps more than anyone in adding to Jones’s allure locally, declined to speculate about Jones’s financial situation. But just two years ago, Dick made a business move of his own: decoupling his own business from his longtime partner—Jones himself. For years, Dick and Jones had been business partners in Grow INdiana Media Ventures, the company behind Inside Indiana Business, which routinely platforms Jones. It’s a fact he disclosed on his show. But it’s also the perfect illustration of Indianapolis’s coziness.
Jones now counsels other entrepreneurs to avoid the kind of high-profile spending he built a reputation for. Don’t own so much that your stuff owns you, he tells them. “I was feeling like my stuff owned me at that point.”
Jones is worried that this story will ruin his chance to get public money for his coding academy. After all, he still has juice with some powerful people at the Statehouse. The Department of Workforce Development has paid about $13 million to his coding school. The state has also poured $75 million into one of Jones’s ideas: the Indiana Career Accelerator Fund, which would give financial aid to students who want to skill up in a career where they can achieve a credential in less than six months, meaning a larger pool of customers for career-credentialing programs like Eleven Fifty. Recently, he got DWD Commissioner Fred Payne to change course on how federal COVID-19 relief dollars would be handled in funding workforce-training programs like his, according to an email obtained by IM. Payne agreed to change a state-imposed deadline from September to December. Jones says he brings “trillions” of dollars to the state in gross domestic product (Indiana’s gross domestic product is $379,684,000,000).
He’s sharing what happened, Jones says, because I asked. Jones told me he’s an open book. At Chatham, I slid a summary of Jones’s finances as disclosed in court documents in front of him to verify their authenticity, which he did.
“I am transparent,” Jones says. “Most people would’ve walked out on you, but I’m pretty transparent. I’m on the table. I don’t tell people if they don’t ask.” In Indianapolis, no one ever seems to ask.
As for Jones’s next big thing? He goes into a monologue about nanotech. Later, he tells me he doesn’t want to share any more until the divorce trial is over and he has financial clarity. He reminds me that he holds 50 patents.
Jones says his will be a story with a happy ending and considers himself among “resilient entrepreneurs,” which he says is new for Indianapolis. “In places like California, entrepreneurs shoot for the moon, crash, burn, lose it all, and start all over again. All the time,” he says. “In fact, it’s a solid badge of honor. I did it multiple times. Nobody has been dwelling on the peaks or the troughs. This is just a moment in time. Resiliency matters. The willingness to bet big and swing for the fences matters. And the ability to jump back in and win again after defeat matters.”
As this story went to press, Jones texted me a question and a prediction: “the big question is whether you will end on an optimistic note, looking forward. I am certain things will go well. You asked if I would make $100 million again. I will earn between a billion and $100 billion in this next decade. Watch me.”
But when we first met at Chatham Tap at Butler where Jones has been taking meetings, the entrepreneur was more subdued. “I can’t think of anybody with a story like my story in Indiana,” Jones told me, in between sips of iced tea and over a plate of fried mushrooms. “I don’t love that story, other than the fact that failure’s not an option for me. When anybody else would look around and say they have failed, I just don’t.”
A server asked if we needed anything else, but Jones had another meeting soon so we requested the bill. I picked up the check.
Jones promised to get the tab next time.