5 ms·

The Ugly Unethical Underside of Silicon Valley

73 points by mef 10y ago

squozzer 10y ago
We probably should remove our rose-colored shades and assume SV - like Hollywood and Wall Street -- are a bunch of hucksters.
- eli_gottlieb 10y ago
  I don't think it's fair to say all tech startups are fraudulent, but I agree that like Wall Street, where large amounts of money meet large numbers of fraud cases, we need to improve regulations.
- FloNeu 10y ago
  Well - all the money thrown at startups without business-models does sure have a part in attracting those... i often think - even the most so called 'unicorns' are only gigantic bubbles waiting to burst. Most of them are eating up millions and fail to present a glimps on how they actually want to earn back this money someday. I sometimes think investors and startups haven't learned anything from the .com-bubble.
kafkaesq 10y ago
These vignettes aren't about the "underside" of SV. Rather, they go to the very core of what the industry is about.
alex- 10y ago
Not sure startups are seeing more scandals than other areas? Also seems strange to point to start up culture i.e. When a sportsman is caught doping we don't attack the sport. We see ethical issues in large companies e.g. Like VWs emission scandal ( https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal ) or Wells Fargo opening phony accounts ( http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/ http://money.cnn.com/2016/09/08/investing/wells-fargo-create... ). It is not hard to find stories of insider trading in banks, or corruption in oil and gas or mis-handling of private data. Arguably these larger abuses effect more peoples lives. Unscrupulous people are a fact of life. I am not sure a solution really exists, and if it does it may well be worse than the problem.
- bootload 10y ago
  "Also seems strange to point to start up culture i.e. When a sportsman is caught doping we don't attack the sport." Cycling? Looking at the history of doping in cycling you see individuals doping, then look closer and you see teams at the centre of doping. So yes, culture needs to be questioned. [0] [0] https://en.wikipedia.org/wiki/Doping_at_the_Tour_de_France https://en.wikipedia.org/wiki/Doping_at_the_Tour_de_France
objectivistbrit 10y ago
I have definitely met my share of sleazy characters in the startup world. However... No industry is immune to fraud, and the hotter the business, the more hucksters flock to it. But Silicon Valley has always seen itself as the virtuous outlier, a place where altruistic nerds tolerate capitalism in order to make the world a better place. Suddenly the Valley looks as crooked and greedy as the rest of the business world. ...I strongly disagree with the implication that unethical behaviour is due to capitalism, or to be expected in the business world. In the long run, screwing people over never works. Building a successful business requires building win-win, non-zero-sum relationships. Good people prefer to work with good people. Cutting corners, breaking contracts, fiddling numbers - anyone who does these things will eventually be found out, and no-one decent will want to deal with them. And the growing roster of scandal-tainted startups share a theme. Faking it, from marketing exaggerations to outright fraud, feels more prevalent than ever—so much so that it’s time to ask whether startup culture itself is becoming a problem. This is closer to the real root cause. Today's startup culture (and the nature of the VC game) incentivises "faking it", delusional over-confidence, and pseudo-idealism that crashes into reality in an ugly fashion. Amy Hoy and some others wrote about startup narcissism which is a big part of this: https://hackpad.com/Startup-Narcissism-sy2u5j2aTbE https://hackpad.com/Startup-Narcissism-sy2u5j2aTbE
- ThrustVectoring 10y ago
  There's actually interesting game theoretic and population dynamics going on here. There's three strategies - play nice with people who play nice, playing nice with everyone, and taking advantage of folks. If everyone spends the effort vetting people, then taking advantage of folks doesn't work, and we're in the state you suggest. But, if the vast majority of people play nice anyways, you can cheap out on enforcement/vetting and still do fine, since everyone else makes sure that exploiting people doesn't work as a strategy. But if too many people do that, that makes exploiting folks a viable strategy again... The exact game-theoretic equilibrium depends on how expensive it is to vet people and the payoffs for cooperation and exploitation. If you want to argue that screwing people over doesn't work, you need to argue for a short-run deviation in these factors from long-term trends. This is actually pretty easy - the internet is a relatively new phenomenon, and your reputation is more easily accessed and checked than ever.

73 points by mef 10y ago

We probably should remove our rose-colored shades and assume SV - like Hollywood and Wall Street -- are a bunch of hucksters.

eli_gottlieb 10y ago
I don't think it's fair to say all tech startups are fraudulent, but I agree that like Wall Street, where large amounts of money meet large numbers of fraud cases, we need to improve regulations.
FloNeu 10y ago
Well - all the money thrown at startups without business-models does sure have a part in attracting those... i often think - even the most so called 'unicorns' are only gigantic bubbles waiting to burst. Most of them are eating up millions and fail to present a glimps on how they actually want to earn back this money someday. I sometimes think investors and startups haven't learned anything from the .com-bubble.

kafkaesq 10y ago

These vignettes aren't about the "underside" of SV. Rather, they go to the very core of what the industry is about.

alex- 10y ago

Not sure startups are seeing more scandals than other areas? Also seems strange to point to start up culture i.e. When a sportsman is caught doping we don't attack the sport. We see ethical issues in large companies e.g. Like VWs emission scandal ( https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal https://en.wikipedia.org/wiki/Volkswagen_emissions_scandal ) or Wells Fargo opening phony accounts ( http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/ http://money.cnn.com/2016/09/08/investing/wells-fargo-create... ). It is not hard to find stories of insider trading in banks, or corruption in oil and gas or mis-handling of private data. Arguably these larger abuses effect more peoples lives. Unscrupulous people are a fact of life. I am not sure a solution really exists, and if it does it may well be worse than the problem.

bootload 10y ago
"Also seems strange to point to start up culture i.e. When a sportsman is caught doping we don't attack the sport." Cycling? Looking at the history of doping in cycling you see individuals doping, then look closer and you see teams at the centre of doping. So yes, culture needs to be questioned. [0] [0] https://en.wikipedia.org/wiki/Doping_at_the_Tour_de_France https://en.wikipedia.org/wiki/Doping_at_the_Tour_de_France

objectivistbrit 10y ago

I have definitely met my share of sleazy characters in the startup world. However... No industry is immune to fraud, and the hotter the business, the more hucksters flock to it. But Silicon Valley has always seen itself as the virtuous outlier, a place where altruistic nerds tolerate capitalism in order to make the world a better place. Suddenly the Valley looks as crooked and greedy as the rest of the business world. ...I strongly disagree with the implication that unethical behaviour is due to capitalism, or to be expected in the business world. In the long run, screwing people over never works. Building a successful business requires building win-win, non-zero-sum relationships. Good people prefer to work with good people. Cutting corners, breaking contracts, fiddling numbers - anyone who does these things will eventually be found out, and no-one decent will want to deal with them. And the growing roster of scandal-tainted startups share a theme. Faking it, from marketing exaggerations to outright fraud, feels more prevalent than ever—so much so that it’s time to ask whether startup culture itself is becoming a problem. This is closer to the real root cause. Today's startup culture (and the nature of the VC game) incentivises "faking it", delusional over-confidence, and pseudo-idealism that crashes into reality in an ugly fashion. Amy Hoy and some others wrote about startup narcissism which is a big part of this: https://hackpad.com/Startup-Narcissism-sy2u5j2aTbE https://hackpad.com/Startup-Narcissism-sy2u5j2aTbE

ThrustVectoring 10y ago
There's actually interesting game theoretic and population dynamics going on here. There's three strategies - play nice with people who play nice, playing nice with everyone, and taking advantage of folks. If everyone spends the effort vetting people, then taking advantage of folks doesn't work, and we're in the state you suggest. But, if the vast majority of people play nice anyways, you can cheap out on enforcement/vetting and still do fine, since everyone else makes sure that exploiting people doesn't work as a strategy. But if too many people do that, that makes exploiting folks a viable strategy again... The exact game-theoretic equilibrium depends on how expensive it is to vet people and the payoffs for cooperation and exploitation. If you want to argue that screwing people over doesn't work, you need to argue for a short-run deviation in these factors from long-term trends. This is actually pretty easy - the internet is a relatively new phenomenon, and your reputation is more easily accessed and checked than ever.