The paper's concept of 'deep façading' follows the same pattern. When a product fails to generate sustainable value or revenue in the market, founders create fake metrics to protect the book returns of early investors and attract the next round of funding. Instead of being driven by real customer value, the company's valuation is inflated by the next investor's money—creating a multi-level pyramid.
The successful hot potato is WeWork, handed off to SoftBank and public market retail investors. The failed one is Theranos.
That was all I needed to know about what was wrong about valley culture.
Look, I’m not promoting fraud at all, but having been doing seed raising for the last eight months, there have been many times where I thought the only way to compete was by fudging the numbers (because everyone else is, basically). It’s one of several reasons I left this game and am pursuing non-traditional means of funding now.
But this study validates a lot of feelings I’ve had over the last several months. There’s a ton of people that never get caught, of course.
If I ever win the lottery, I'm going to create the Joseph Welch Foundation. The foundation will give monetary awards to people who have demonstrably pushed back against corruption, lies, and bullshit.
For those who don't recognize the name, Joseph Welch is who said "Have you no sense of decency, sir, at long last, have you left no sense of decency?" to Joseph McCarthy.
Too few people remember Welch. McCarthy was the asshole but his name is remembered more. I see this as an error we have made with our societal memory. It would be better to remember Welch, and only remember McCarthy as "that red scare guy".
You might need to qualify that a bit harder or someone could quite easily point out that all of these worthless shitdribblers cause actual damage to humans. They all lie, they all continue to claim that they hold the future in their feeble sticky hands. Just to take, take, take. You seem fixated on lying being a problem but only one of these two liars causes you to feel that her case is different? Maybe the difference between the two is in the lie of the beholder.
firasd•1h ago
But there is a clear line that gets crossed if you start actually making a database of millions of synthetic users and that's what happened with 'Frank' that sold to JP Morgan and eventually the founder was prosecuted
hn_throwaway_99•50m ago
I think that's BS. User metrics are usually very explicitly defined (e.g. monthly or daily active users have always been clearly defined wherever I've worked, even if just for the sole reason that people collecting those numbers need to know what to count). User quality is definitely a gray area and estimating bot percentage has become increasingly difficult, but user metrics are not some ill-defined, fuzzy math notion.
dd8601fn•44m ago
firasd•44m ago
I may be wrong! But I am definitely giving such claims the side-eye
stanleykm•29m ago
lumost•43m ago
As part of due diligence, the buyer/investor should ask how these numbers are calculated and make their own judgement. Unfortunately I believe startups select for those who dance the border of deceptive and foolish.
zbentley•29m ago
I think that’s well within the bounds of what most people would consider to be a “lie”. The legal system has more specific definitions, though.
jdw64•43m ago
abixb•46m ago
I like Ed Zitron's reporting on the AI industry (though I disagree with him on AI's potential capabilities).
I wonder how much of AI-related revenue are because of accounting fiction rather than actual cash.
Either way, I think the stock market is as disconnected as it has ever been with actually ground reality of the US economy and industry.
Zigurd•45m ago
If she were really clever she would recruit a social media army of all the weird conspiracy theorists who think "medbeds" are real.
Of course now we know that a drop of capillary blood containing interstitial fluid and a random mix of venous and arterial blood is unsuitable for most blood tests. At least you will have googled that if you're an Elon stan preparing to tell me how they're not comparable.
umpalumpaaa•37m ago
Zigurd•30m ago
akiselev•7m ago
Everyone in diagnostic medicine knows this. That's why no biotech VC ever invested in Theranos and they had to get tech VCs and fancy board members like Henry Kissinger. A cursory glance at the proposal by someone qualified would have shut that down immediately, but tech VCs don't do due diligence anymore.