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Karma's big moment marred by claim about clients

Karma, which allows users to share their mobile hot spot with the public, said it was working with American Airlines and Uber, despite not having authorization to say so.

A company called Karma has developed what it's called the "social telecom." The only issue is, its big unveiling took a hit recently after Karma mentioned two companies it has worked with but hasn't actually signed on.

At TechStars yesterday, Karma took the stage to show off its 4G hot spot. The small box, which costs $69 and runs on Clearwire's network, offers users pay-as-you-go WiMax 4G service in 80 cities across the United States. For each 1GB of data used, Karma charges $14. In addition, the hot spot is made to be open, so people can jump onto the network, log in with their Facebook account, and get 100MB of free browsing. To make it right with the hot spot's owner, Karma credits the owner 100MB of free data.

The idea itself sounds rather interesting. And it could be a game changer in the mobile space. However, what was supposed to be a grand unveiling ushering in a new era of "social telecom," turned into a nightmare for Karma, as CEO Robert Gaal said on stage that the company has partnered with American Airlines and Uber, an on-demand car service provider, to help get its service off the ground.

The issue is, those deals haven't been struck. And Uber CEO Travis Kalanick made that clear in a tweet yesterday, saying Gaal "lied on stage at Tech Stars demo day in order to get funding." Soon after, Gaal clarified the gaffe in a Tumblr posting called "Mea culpa."

"We apologize profusely for claiming Uber and American Airlines are working with us -- a statement we never received explicit permission to use," Gaal wrote. "And we apologize to TechStars and the whole TechStars community. We did not mean to overstate anything or unfairly take advantage of the network and the opportunities it has opened up for us."

Gaal didn't clarify why he mentioned Uber or American Airlines. However, he did say in his post that Karma has started connecting with major brands, including some that it's in "early stage talks" with, and others that have started "pilot programs."

Kalanick didn't say why he believes Gaal used the mention of those clients to gain funding.

Gaal said at TechStars yesterday, according to TechCrunch, that his company has so far raised $1 million from a host of angel investors.