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>Considering that BS, stretching of capabilities, and so on are commonplace in the startup world, the point isn't whether Holmes crossed the line (she did), but

by jasode 5y ago

>Considering that BS, stretching of capabilities, and so on are commonplace in the startup world, the point isn't whether Holmes crossed the line (she did), but rather, how exactly that line is repositioned by this precedent. I really don't see the line being repositioned at all because typical founder bs and Holme's fraud have a clear difference: - bs is often overinflated promises of the _future_ that don't come true ; E.g. Musk overpromises fully-self-driving cars next year blah blah blah - fraud is often lying about the _past_ with falsified documents etc. E.g. Holmes deliberately fabricated "military contracts" that didn't exist and forged papers with supposed Pfizer endorsements to trick investors to wire money. Likewise, Madoff faked the so-called fund's audited statements showing profitable trades. Therefore, convictions of wire fraud charges are easier to prosecute. Holme's guilty convictions really have no relevance to the pie-in-the-sky overconfidence of founders. Therefore, unrealistic projections will continue to be made. Is there any credible evidence showing Elon Musk falsified documents and fabricated income to trick investors into SpaceX/Tesla?

bumby 5y ago
Maybe someone with a legal background can weigh in more intelligently, but skimming through the US Code that she was actually convicted of doesn't make any distinction between past and future. Most of it is centered around claims of material fact (i.e., not subjective) and intentional and realized damage. I think some of the grey area with Musk is the marketing of the product, like terming it "autopilot" which has a very specific connotation in the public perception. I'm granting that's not fraud in the same sense as the Theranos case, but I think it (probably deliberately) walks into a grey area of ethics. I think the damage claim is readily apparent but the intentional claim may be more difficult, in part because I don’t think there is a standardized definition of “autopilot”, even if it knowingly means something specific to the general public. If I create an EV model named the "ThousandMiler" but put an asterisk in the manual that says it's only capable of 500 miles, maybe that's not fraud but it's skirting the line.
wiz21c 5y ago
> pie-in-the-sky overconfidence of founders I always wonder do they really are overconfident, or are they so because somehow they think they would miss opportunities if they are less overconfident than their competitors ? It sounds much like advertising always selling you things using very ambiguous wording in order to make you dream. For me that's just lying.
- bumby 5y ago
  This is a documented bias in civil projects and one of the factors of why they are notoriously over schedule and over budget. An optimism bias leads naive project managers to gauge cost and schedule on best case scenarios. Less naive managers then have to give equally optimistic projections, just to have a hope of getting funded even if they know the projections are wrong.

by jasode 5y ago

bumby 5y ago

Maybe someone with a legal background can weigh in more intelligently, but skimming through the US Code that she was actually convicted of doesn't make any distinction between past and future. Most of it is centered around claims of material fact (i.e., not subjective) and intentional and realized damage. I think some of the grey area with Musk is the marketing of the product, like terming it "autopilot" which has a very specific connotation in the public perception. I'm granting that's not fraud in the same sense as the Theranos case, but I think it (probably deliberately) walks into a grey area of ethics. I think the damage claim is readily apparent but the intentional claim may be more difficult, in part because I don’t think there is a standardized definition of “autopilot”, even if it knowingly means something specific to the general public. If I create an EV model named the "ThousandMiler" but put an asterisk in the manual that says it's only capable of 500 miles, maybe that's not fraud but it's skirting the line.

wiz21c 5y ago

> pie-in-the-sky overconfidence of founders I always wonder do they really are overconfident, or are they so because somehow they think they would miss opportunities if they are less overconfident than their competitors ? It sounds much like advertising always selling you things using very ambiguous wording in order to make you dream. For me that's just lying.

bumby 5y ago
This is a documented bias in civil projects and one of the factors of why they are notoriously over schedule and over budget. An optimism bias leads naive project managers to gauge cost and schedule on best case scenarios. Less naive managers then have to give equally optimistic projections, just to have a hope of getting funded even if they know the projections are wrong.