4 ms·

Previously discussed: https://news.ycombinator.com/item?id=26898266 https://news.ycombinator.com/item?id=26898266 If a company promises more than they can deli

by cbsks 5y ago

Previously discussed: https://news.ycombinator.com/item?id=26898266 https://news.ycombinator.com/item?id=26898266 If a company promises more than they can deliver, is it a scam? What if they believe that they actually can deliver it?

DetroitThrow 5y ago
Theranos believed in what they were originally taking investors over. I don't see why this is not a similar case of fraud if investors have not been informed about current expectations of their original promise.
- chrisco255 5y ago
  The difference with Theranos is they were promising people tangible medical results. Clearly, if a metaverse startup convinces a bunch of VCs to back them and the venture fails, that risk was known from the beginning.
  - ska 5y ago
    I don't think the point was what the tangible result would be, or risk of failure. Everyone putting money into an early venture knows that there is a good chance they just kissed it goodbye. The problem is when said venture later lies about progress, or otherwise obfuscates, especially to get more money. That's certainly what Theranos did, and I think what GP was suggesting happened here.
  - qzw 5y ago
    They also collected $64K from a Kickstarter while boasting about having "secured the majority of our funding from some of the best investors in Silicon Valley." So arguably they did promise some tangible results to some non-professional investors/potential players. Of course, by now everyone should know that Caveat Backer is the unofficial motto of Kickstarter.
  - orzig 5y ago
    Moreover, they were making claims about the then-present, not just the clearly unforeseeable future
- baby 5y ago
  Theranos was lying and faking demos. Also the founder had little knowledge in the field.
aeturnum 5y ago
I do think calling this a "scam" is difficult to defend from an intent perspective, but it does not appear like it has any realistic chance of succeeding. At some point projects cross a line from being optimistic to being negligent and deceptive. YC should know better and I think using hyperbolic rhetoric is a legitimate counter to a company that seems to be sleepwalking into failure with other peoples' money.
- sanxiyn 5y ago
  I am all for investor protection, but "other people" here are supposed to be accredited investors. Caveat emptor etc.
  - bcrosby95 5y ago
    And people on kickstarter. But it would probably get no play here if it were just another pie-in-the-sky kickstarter game rather than being backed by YC. They did say they were backed by SV investors in their kickstarter, though, I'm not sure if that had anything to do with their success there.
  - aeturnum 5y ago
    I can see why you would say that other investors should do their own research, but many people view a YC investment as a vote of confidence in the company in question. Your view makes me curious about how you think about the role of an incubator. Like...are there any lines YC could cross? Does their investment in a company reflect on them at all? What value do they provide other than seed money to companies?
    - sanxiyn 5y ago
      YC provides seed money. No one should rely on YC for due diligence.
      - avisser 5y ago
        > JobCompany (YC W20) Is Hiring and you want to join! This website trains people to rely on the YC endorsement. I understand if you don't think people should, but I agree with the sentiment YC has some responsibility to do a better job vetting.
wmf 5y ago
I would hope that one of the services provided by YC is a reality check to convince startups like this to stop overpromising.
- krapp 5y ago
  No one ever threw millions of dollars at founders with modest goals and realistic expectations. Every startup has to be changing the world, disrupting the status quo, innovating the next big thing.
gameswithgo 5y ago
The answer to your question in isolation is no. However people with some experience in game development would largely agree that these people can't have believed they were going to deliver it, and YC certainly should have known.
- TechBro8615 5y ago
  I’m sure they believe they can do it. You underestimate the confidence of privileged youth.
  - koonsolo 5y ago
    It is indeed possible that a total newbie in gamedev can think they can build an MMO on their own, it happens all the time. But that adult investors fall for this, is beyond belief.
serf 5y ago
>If a company promises more than they can deliver, is it a scam? I think I can squeeze water out of rocks. Pay me now to do it, and i'll figure it out. Everyone around tells me I can't, but I know I can. >What if they believe that they actually can deliver it? I absolutely believe I can do it if I set my mind to it. Fund my company so we can find out. Do you see any possible issues with this style of transaction?
- sanxiyn 5y ago
  Do you plan to license the technology or build water plants yourself? What is your advantage relative to desalination?
  - RapidFire 5y ago
    The minerals of course! Squeezing water from rock means its natural organic Mineral Water™ and it's sustainable too!
DonHopkins 5y ago
Is Peter Molyneux a scammer? Or just a pathological liar who believes his own hype? He made some fantastic games in the past, but then... https://en.wikipedia.org/wiki/Peter_Molyneux https://en.wikipedia.org/wiki/Peter_Molyneux The Lesson of Peter Molyneux https://techcrunch.com/2015/02/15/the-lesson-of-peter-molyneux/ https://techcrunch.com/2015/02/15/the-lesson-of-peter-molyne... Peter Molyneux - Dreamer? Or Con Man? https://www.youtube.com/watch?v=62-J4KDMAIk&ab_channel=Shott1e https://www.youtube.com/watch?v=62-J4KDMAIk&ab_channel=Shott... Peter Molyneux Interview: "I haven’t got a reputation in this industry any more" https://www.rockpapershotgun.com/peter-molyneux-interview-godus-reputation-kickstarter https://www.rockpapershotgun.com/peter-molyneux-interview-go... >RPS: Do you think that you're a pathological liar? >Peter Molyneux: That's a very... >RPS: I know it's a harsh question, but it seems an important question to ask because there do seem to be lots and lots of lies piling up. >Peter Molyneux: I'm not aware of a single lie, actually. I'm aware of me saying things and because of circumstances often outside of our control those things don't come to pass, but I don't think that's called lying, is it? I don't think I've ever knowingly lied, at all. And if you want to call me on one I'll talk about it for sure.

by cbsks 5y ago

DetroitThrow 5y ago

Theranos believed in what they were originally taking investors over. I don't see why this is not a similar case of fraud if investors have not been informed about current expectations of their original promise.

chrisco255 5y ago
The difference with Theranos is they were promising people tangible medical results. Clearly, if a metaverse startup convinces a bunch of VCs to back them and the venture fails, that risk was known from the beginning.
- ska 5y ago
  I don't think the point was what the tangible result would be, or risk of failure. Everyone putting money into an early venture knows that there is a good chance they just kissed it goodbye. The problem is when said venture later lies about progress, or otherwise obfuscates, especially to get more money. That's certainly what Theranos did, and I think what GP was suggesting happened here.
- qzw 5y ago
  They also collected $64K from a Kickstarter while boasting about having "secured the majority of our funding from some of the best investors in Silicon Valley." So arguably they did promise some tangible results to some non-professional investors/potential players. Of course, by now everyone should know that Caveat Backer is the unofficial motto of Kickstarter.
- orzig 5y ago
  Moreover, they were making claims about the then-present, not just the clearly unforeseeable future
baby 5y ago
Theranos was lying and faking demos. Also the founder had little knowledge in the field.

aeturnum 5y ago

I do think calling this a "scam" is difficult to defend from an intent perspective, but it does not appear like it has any realistic chance of succeeding. At some point projects cross a line from being optimistic to being negligent and deceptive. YC should know better and I think using hyperbolic rhetoric is a legitimate counter to a company that seems to be sleepwalking into failure with other peoples' money.

sanxiyn 5y ago
I am all for investor protection, but "other people" here are supposed to be accredited investors. Caveat emptor etc.
- bcrosby95 5y ago
  And people on kickstarter. But it would probably get no play here if it were just another pie-in-the-sky kickstarter game rather than being backed by YC. They did say they were backed by SV investors in their kickstarter, though, I'm not sure if that had anything to do with their success there.
- aeturnum 5y ago
  I can see why you would say that other investors should do their own research, but many people view a YC investment as a vote of confidence in the company in question. Your view makes me curious about how you think about the role of an incubator. Like...are there any lines YC could cross? Does their investment in a company reflect on them at all? What value do they provide other than seed money to companies?
  - sanxiyn 5y ago
    YC provides seed money. No one should rely on YC for due diligence.
    - avisser 5y ago
      > JobCompany (YC W20) Is Hiring and you want to join! This website trains people to rely on the YC endorsement. I understand if you don't think people should, but I agree with the sentiment YC has some responsibility to do a better job vetting.

wmf 5y ago

I would hope that one of the services provided by YC is a reality check to convince startups like this to stop overpromising.

krapp 5y ago
No one ever threw millions of dollars at founders with modest goals and realistic expectations. Every startup has to be changing the world, disrupting the status quo, innovating the next big thing.

gameswithgo 5y ago

The answer to your question in isolation is no. However people with some experience in game development would largely agree that these people can't have believed they were going to deliver it, and YC certainly should have known.

TechBro8615 5y ago
I’m sure they believe they can do it. You underestimate the confidence of privileged youth.
- koonsolo 5y ago
  It is indeed possible that a total newbie in gamedev can think they can build an MMO on their own, it happens all the time. But that adult investors fall for this, is beyond belief.

serf 5y ago

>If a company promises more than they can deliver, is it a scam? I think I can squeeze water out of rocks. Pay me now to do it, and i'll figure it out. Everyone around tells me I can't, but I know I can. >What if they believe that they actually can deliver it? I absolutely believe I can do it if I set my mind to it. Fund my company so we can find out. Do you see any possible issues with this style of transaction?

sanxiyn 5y ago
Do you plan to license the technology or build water plants yourself? What is your advantage relative to desalination?
- RapidFire 5y ago
  The minerals of course! Squeezing water from rock means its natural organic Mineral Water™ and it's sustainable too!

DonHopkins 5y ago

Is Peter Molyneux a scammer? Or just a pathological liar who believes his own hype? He made some fantastic games in the past, but then... https://en.wikipedia.org/wiki/Peter_Molyneux https://en.wikipedia.org/wiki/Peter_Molyneux The Lesson of Peter Molyneux https://techcrunch.com/2015/02/15/the-lesson-of-peter-molyneux/ https://techcrunch.com/2015/02/15/the-lesson-of-peter-molyne... Peter Molyneux - Dreamer? Or Con Man? https://www.youtube.com/watch?v=62-J4KDMAIk&ab_channel=Shott1e https://www.youtube.com/watch?v=62-J4KDMAIk&ab_channel=Shott... Peter Molyneux Interview: "I haven’t got a reputation in this industry any more" https://www.rockpapershotgun.com/peter-molyneux-interview-godus-reputation-kickstarter https://www.rockpapershotgun.com/peter-molyneux-interview-go... >RPS: Do you think that you're a pathological liar? >Peter Molyneux: That's a very... >RPS: I know it's a harsh question, but it seems an important question to ask because there do seem to be lots and lots of lies piling up. >Peter Molyneux: I'm not aware of a single lie, actually. I'm aware of me saying things and because of circumstances often outside of our control those things don't come to pass, but I don't think that's called lying, is it? I don't think I've ever knowingly lied, at all. And if you want to call me on one I'll talk about it for sure.