11 ms·

Tony Hsieh’s Friends/Family Milked Millions in His Drug-Fueled Final Months

172 points by karaokeyoga 4y ago

ada1981 4y ago
I met someone claiming to be one of Tony’s best friends who told me that he had his drug induced idea that he needed to burn himself as a death and rebirth thing. That he had a secret death cult he was trying to start. He also said that the man who ran into the Man at Burning Man a couple years ago had his final conversation with Tony before he self immolated. The guy who shared was a rather successful entrepreneur and otherwise I had no reason to suspect he was lying.
- reso 4y ago
  Jesus christ. Can you corroborate that or add any... checkable details to that in any way? I was at that burn and that was really fucked up.
  - bredren 4y ago
    I was also in that burn ring. Repeating this story, with no factual detail unnecessarily dredges up a dark and traumatic event for so many people. To suggest Hsieh would be associated with or have been influenced by the person who died that night is a shame. The burn is no Eden, and participants are not saints. However, there is a positive spirit of gifting that Hsieh did foster outside the national event. The work he did downtown Vegas was a testament to this. If anything, that is what should be remembered about Hsieh’s connection to BM.
  - ada1981 4y ago
    I can't outside what was claimed to be a first person account by a sober, successful, health oriented person. I saw little incentive for him to manufacture that story -- he could have for sure.
- steve_adams_86 4y ago
  Someone’s success in business doesn’t mean they’re a reliable source or information. You also have no reason to suspect they wouldn’t be motivated to lie. Even if they weren’t, there’s no reason to assume they had sufficient information in the situation to understand what actually happened. One thing that stands out to me: if my best friend died like this, I would have absolutely no desire to spread this information about them after their death.
  - gojomo 4y ago
    You wouldn't want to spread "this information" even if it happened to be true, and such truth might help others either navigate their grief, or recognize & head-off similar delusions in the future? FWIW, the detail about the Burning Man self-immolator sounds sketchy in a "heard it from a friend of a friend" urban-legend manner. But the idea that someone with all the other erratic behaviors & drug practices credibly-described in Hsieh's last days also had some odd & self-destructive beliefs about death is unsurprising. Such beliefs are not atypical in various mental illnesses, including those caused or aggravated by drug abuse.
    - kodah 4y ago
      If the new facts materially affect the outcome and are indeed facts, then pointing out or corroborating the truth can be helpful. If they aren't/don't then you're just agitating.
      - gojomo 4y ago
        Agreed: the dispositive factors are: "Is this true?" and "Could this truth help others?" Given the other reports of Hsieh's erratic behavior, including with regard to health practices & psychoactive drugs, & the specific manner in which he ultimately died, it's very plausible he'd developed a fascination with death & self-harm. And some people who do that also seek out others with similar fantasies, sometimes for mutual encouragement, aka, a 'death cult' or 'suicide pact'. Sad but true – and in my estimation, better to be aware of as a real possibility than reflexively deny as likely fabrication.
- deleted 4y ago
  [deleted]
- roflchoppa 4y ago
  strange, i had a buddy in high school that went to Burning Man about 10 years ago. Before going he was under the impression that he could control his drug consumption. There was a stark difference in his behavior when he came back, he was more rash in actions. After a couple months he was stuck on pills, last I saw he was not looking too hot. I hope he gets the will to get better.
- kodah 4y ago
  > He also said that the man who ran into the Man at Burning Man a couple years ago had his final conversation with Tony before he self immolated. His name was Aaron Joel Mitchell. I've supplied an article that timelines Mitchell's night. His last known interactions were with some people he knew from Switzerland. There were no drugs or alcohol found in his system. That's to say, both facts make it highly unlikely he was around Tony. https://www.rgj.com/story/life/arts/burning-man/2018/02/09/burning-man-death-details-emerge-family-friends-still-wonder-why/312798002/ https://www.rgj.com/story/life/arts/burning-man/2018/02/09/b...
  - gojomo 4y ago
    That's useful context - but both those details in the article seem like indirect hearsay, from people who don't necessarily have the whole story. For example, the drug info isn't from an autopsy, but what some unnamed UC Davis medical staff told Mitchell's grieving mother, and she relayed to the reporter. Similarly, the bit about "friends from Switzerland" is just passed on from Mitchell's friend, with no other confirming details – like, say any reports on Mitchell's last actions from those supposed people. Now, the claim Mitchell last spoke with Hsieh still sounds like a made-up urban-legend to me. But the "Mitchell's mom said" and "Mitchell's friend said" accounts from the RGJ story aren't dispositive either way. And even without drugs, or a dramatic "last talk", it's not inconceivable that Mitchell & Hsieh had met at some point, & even possibly shared a fascination (including when sober!) with fantasies of self-immolation. The world is weird. Distressed/depressed people with synergistic delusions can find each other via the internet easier than ever before.
    - kodah 4y ago
      > For example, the drug info isn't from an autopsy, but what some unnamed UC Davis medical staff told Mitchell's grieving mother, and she relayed to the reporter. Kind of, but I wouldn't call that hearsay. If his mother got it from someone credentialed, it's good info. The caveat to that is that toxicology reports can only detect what's screened for. If he were given a research chemical, for instance, or unknowingly ingested one then we'd never know. All of that is not for not though. There's some things to be learned: - if you're planning on doing a new drug or an old drug from a new supplier then test your stuff and start small. If you're messing with hallucinagens then you need a benzo on stand by. - never accept drugs from people at festivals, full stop. - always have a trip sitter that's sober
pfoof 4y ago
I just read "Delivering Happiness" two days ago and learned about Tony's death later
helpfulclippy 4y ago
It’s a real pity. I circulated in the Downtown Tech scene in Las Vegas for a little bit. I felt like it was rather culty, but I also felt he really made people believe in the town’s ability to be more than a tourist destination. At the time, the city was still quite battered from the recession, and there was quite a lot of pessimism. The energy he brought was very needed, and the community he fostered had real energy and hope and value. I made friends then that I still have now, who are very dear to me. I’ve since left town, but I was back last year and walked around the places we all used to hang out… it was very sad to me to see all traces of that community gone, but I was happy I got to be part of it, and to have seen someone with that kind of wealth try to do something to really change their city for the better. Of course, it had problems, and he was throwing money around to make it all work, and as time went on I think much of that money served to conceal those problems rather than confront them… though I never heard stories back then on the scale of what this article describes as happening in Utah. I don’t know really how to feel about the information here, other than very, very sad. I hope despite how he wound up, someone else someday is able to draw inspiration from the parts of what he did that worked and created hope and strengthened the local community, and they can move the ball forward. And I hope wherever Tony is now, he’s free from whatever drove him into such a dark place. Rest in peace.
- MichaelZuo 4y ago
  Were there any rumours about odd behavioural or personality quirks of Tony at the time? There might have been some indication if the article is true, but I'm not sure.
  - helpfulclippy 4y ago
    I didn't know him personally, so I wish I could say I had some firsthand experience. Rumor-wise, there was every story you can imagine. The guy loved the spotlight and was personally bankrolling something that was simultaneously a VC fund and an urban revitalization project, so obviously opinions went all over the board. In the end, he was a Burning Man kind of guy with huge amounts of money, vision and risk tolerance. Put that way, maybe it's not a shock that after the Downtown project collapsed he built a tiny little Bioshock-y dystopia for his clique, and blasted himself stupid with whip-its until he died. And maybe there's a better parallel universe somewhere in which the project succeeded and the right people came around him, and in that timeline's 2023, every billionaire there is cribbing notes about how to recreate what he did in their own city. Neither story is all that inconsistent from what I saw from my very, very distant vantage point as a lowly tech guy at the fringes of the whole thing.
yevpats 4y ago
R.I.P. His book delivering happiness is a good one with a shadow story about depression, and inability to find piece and happiness for oneself.
inDigiNeous 4y ago
Interesting story. Wonder what caused his downfall into insanity. Was Zappos getting a sudden influx of money, giving him too much sense of power and importance ? It's also sad that he felt he had to overachieve, our current system values achievements and work, and many times that goes really out of balance, people trying to become the next multibillionare no matter what, risking their personal health and even leaving them insane in the process like with Tony apparently. This "biohacking your way to 10x" is unfortunately very prevalent in certain circles, and I understand it, but I think as a society and especially in Silicon Valley and in the software development circles we should remember the importance of resting and taking time off. Your body and especially brain can only take so much. It is actually kind of stupid how little is talked about the importance of resting. Thinking all the time takes an immense amount of energy, trying to push that year over year, even for decades, can lead to some really unpleasant states, where you try to start self medicating and finding ways to circumvent the need for rest. I wish there was more talk about taking time off and just being, I bet it would save a lot of people from peer pressure to 10x perform all the time. I think constantly trying to overachieve is one of the sicknesses in our industry, which is not talked nearly enough about.
- gojomo 4y ago
  Both wealth and drugs can cause small personality quirks, & slight mental instability, to grow in unchecked proportions. Synergistically, especially, they can separate people from familiar moderating social situations, and introduce them to riskier situations & exploitative scenes. Having already become a multibillionaire, it's not clear to me that Hsieh was still driven by any remaining desire or "peer pressure" to "overachieve". He rather seemed unmoored from usual social pressures or limits, and thus unchecked in how absurd his 'business' dealings, personal relationships, & self-exploration could become. Had Hsieh still been seeking conventional success, or "work"/"achievements" legible to sane peers, he may have moderated his actions, or at least not cut himself off from people offering valid concerns.
- BenjaminDyer 4y ago
  I agree totally with your point about learning to rest. I am a startup founder, do way too many hours, plus family life, social, volunteering etc. The funny thing I am just back from a two day break (viewing universities with my daughter) and that hard stop caused me to get some virus, it always happens. Work so hard to the point you need to stop, stop, get ill. I can't be the only one. Aside from that, it's hard for people lots of people to know when to rest when you have this moronic grind culture buzzing in the background. I despise this crush it, work more, do more things attitude in the start up / tech scene. I would have hoped with a better understanding of peoples mental health this would have vanished by now.
peteforde 4y ago
This is just inestimably sad. His book, "Delivering Happiness" had a massive impact on how I built my companies.
gojomo 4y ago
There's only the testimony of the financial manager (Tony Lee) to imply that Tony Hsieh's brother Andy was "seeking to exploit his brother rather than protect him". So I think it remains plausible that Andy was, in truth, trying to preserve some assets to return to brother, in the hopes there'd eventually be some bottoming-out, possible rehab, & return-to-sanity.
- 55555 4y ago
  There’s the tequila pitch too, but yea, I’d like to be optimistic as well. This whole story is so depressing.
rippercushions 4y ago
> He vowed that anyone who spent his money would be entitled to a 10 percent commission on the amount they spent. If someone booked out a restaurant and spent $1,000 on the tab, for example, they would earn $100. If they recruited someone to live in Park City, they would be entitled to a 10 percent commission on that person’s annual salary. And if someone could source a real estate deal and spent $1 million on the property, that person would earn $100,000. This is, quite literally, the stupidest incentive scheme I've ever heard of.
- gojomo 4y ago
  Oddly, it's not that different from other commission/finder's-fee systems. (It's also not totally different from the "commission" many governments collect via sales taxes: "everything happening within our nexus owes us 5-10% of the total spend".) If in fact the ultimate spender is reasonably confident that their actual spend decisions fit their values, but they generally aren't finding enough things to spend on, it could even make sense! But of course if the spend-decisions are unhinged/reckless, then this system makes them 10% more wasteful.
  - TedDoesntTalk 4y ago
    It incentivizes the purchaser to overpay.
    - gojomo 4y ago
      Totally agreed, but still, finder's fees sometimes work that way – because the actual amount truly paid is considered the least-fakable proxy-signal of value delivered. Similarly, utility-style government regulation often caps profits (or profit-like 'overhead' like salaries) as a percentage of expenditures. This creates an incentive for doing things in an expensive manner. It's kinda dumb, and has been understood as a problem driving excessive costs in regulated industries for many decades. But the same thing was written into 2010's ACA ("Obamacare") as an "80/20 rule": insurers must pay out 80% of what they take in on certain preferred health expenditures, like medical procedures. So, the only legal way to grow the absolute size of the 20% an insurer must use for 'overhead' (including administrative salaries & profits) is to increase the totals paid for health services. That is, insurer management/shareholders can benefit when hospitals/providers charge them more. If the federal government habitually makes this mistake, can we blame Hsieh?
exolymph 4y ago
A tragic tale. It is morbidly fascinating from the outside, the results of combining mental illness with lots of money. I hope his family and other loved ones can find peace and closure at some point.
zpeti 4y ago
One of my mentors was an absolute business genius, who around the first dotcom bubble built many many products, many that were very successful. Then around 27 he started going pretty wierd, and 10 years down the line it turns out he's paranoid schizophrenic, and either takes drugs which greatly dimishes his energy and smartness, or he goes crazy. Many of the crazy money spends and similar of Hsieh sound familiar, it's like the genius just gets more and more wacky ideas until they both get exploited but also destroy themselves. It's such a crazy story for me personally. There's also so many of these around. There's something about genius up until about ~27 years old that then can go completely insane. Seems to me to be linked to the whole 27 club [1] too. Seems like something really changes in our brain chemistry around then. [1] https://en.wikipedia.org/wiki/27_Club https://en.wikipedia.org/wiki/27_Club
pembrook 4y ago
I find it fascinating how permissive openness to new ideas and challenging convention in people like Hsieh is likely both responsible for their success and also their downfall. Even though Hsieh had moved on from Silicon Valley after the first dot-com boom, it's a characteristic I'd apply to the Bay Area in general. Makes me wonder if the line between the folks attempting to disrupt the status quo with their startup and the folks living in tents and experimenting with drug cocktails in the tenderloin isn't in fact razor thin. And conversely, I wonder if by "cleaning up" places like SF, you might also kill the permissive attitudes that make the Bay Area the place to go when you want to birth a new idea.
- mjklin 4y ago
  SF is a port city and like all port cities has been permissive towards the vices that sailors tend to engage in.
soufron 4y ago
Wow. That gives a lot of perspective on the lack of hindsight from silicon valley apologists who presented Tony and his company as models for everyone to follow. And of course on his book "delivering happiness".
- rchaud 4y ago
  The SV culture of mythologizing human beings as a 10X this-or-that is definitely something that needs to end.
pjc50 4y ago
The reads like an elder abuse story, except the guy was 46.

172 points by karaokeyoga 4y ago

ada1981 4y ago

I met someone claiming to be one of Tony’s best friends who told me that he had his drug induced idea that he needed to burn himself as a death and rebirth thing. That he had a secret death cult he was trying to start. He also said that the man who ran into the Man at Burning Man a couple years ago had his final conversation with Tony before he self immolated. The guy who shared was a rather successful entrepreneur and otherwise I had no reason to suspect he was lying.

reso 4y ago
Jesus christ. Can you corroborate that or add any... checkable details to that in any way? I was at that burn and that was really fucked up.
- bredren 4y ago
  I was also in that burn ring. Repeating this story, with no factual detail unnecessarily dredges up a dark and traumatic event for so many people. To suggest Hsieh would be associated with or have been influenced by the person who died that night is a shame. The burn is no Eden, and participants are not saints. However, there is a positive spirit of gifting that Hsieh did foster outside the national event. The work he did downtown Vegas was a testament to this. If anything, that is what should be remembered about Hsieh’s connection to BM.
- ada1981 4y ago
  I can't outside what was claimed to be a first person account by a sober, successful, health oriented person. I saw little incentive for him to manufacture that story -- he could have for sure.
steve_adams_86 4y ago
Someone’s success in business doesn’t mean they’re a reliable source or information. You also have no reason to suspect they wouldn’t be motivated to lie. Even if they weren’t, there’s no reason to assume they had sufficient information in the situation to understand what actually happened. One thing that stands out to me: if my best friend died like this, I would have absolutely no desire to spread this information about them after their death.
- gojomo 4y ago
  You wouldn't want to spread "this information" even if it happened to be true, and such truth might help others either navigate their grief, or recognize & head-off similar delusions in the future? FWIW, the detail about the Burning Man self-immolator sounds sketchy in a "heard it from a friend of a friend" urban-legend manner. But the idea that someone with all the other erratic behaviors & drug practices credibly-described in Hsieh's last days also had some odd & self-destructive beliefs about death is unsurprising. Such beliefs are not atypical in various mental illnesses, including those caused or aggravated by drug abuse.
  - kodah 4y ago
    If the new facts materially affect the outcome and are indeed facts, then pointing out or corroborating the truth can be helpful. If they aren't/don't then you're just agitating.
    - gojomo 4y ago
      Agreed: the dispositive factors are: "Is this true?" and "Could this truth help others?" Given the other reports of Hsieh's erratic behavior, including with regard to health practices & psychoactive drugs, & the specific manner in which he ultimately died, it's very plausible he'd developed a fascination with death & self-harm. And some people who do that also seek out others with similar fantasies, sometimes for mutual encouragement, aka, a 'death cult' or 'suicide pact'. Sad but true – and in my estimation, better to be aware of as a real possibility than reflexively deny as likely fabrication.
deleted 4y ago
[deleted]
roflchoppa 4y ago
strange, i had a buddy in high school that went to Burning Man about 10 years ago. Before going he was under the impression that he could control his drug consumption. There was a stark difference in his behavior when he came back, he was more rash in actions. After a couple months he was stuck on pills, last I saw he was not looking too hot. I hope he gets the will to get better.
kodah 4y ago
> He also said that the man who ran into the Man at Burning Man a couple years ago had his final conversation with Tony before he self immolated. His name was Aaron Joel Mitchell. I've supplied an article that timelines Mitchell's night. His last known interactions were with some people he knew from Switzerland. There were no drugs or alcohol found in his system. That's to say, both facts make it highly unlikely he was around Tony. https://www.rgj.com/story/life/arts/burning-man/2018/02/09/burning-man-death-details-emerge-family-friends-still-wonder-why/312798002/ https://www.rgj.com/story/life/arts/burning-man/2018/02/09/b...
- gojomo 4y ago
  That's useful context - but both those details in the article seem like indirect hearsay, from people who don't necessarily have the whole story. For example, the drug info isn't from an autopsy, but what some unnamed UC Davis medical staff told Mitchell's grieving mother, and she relayed to the reporter. Similarly, the bit about "friends from Switzerland" is just passed on from Mitchell's friend, with no other confirming details – like, say any reports on Mitchell's last actions from those supposed people. Now, the claim Mitchell last spoke with Hsieh still sounds like a made-up urban-legend to me. But the "Mitchell's mom said" and "Mitchell's friend said" accounts from the RGJ story aren't dispositive either way. And even without drugs, or a dramatic "last talk", it's not inconceivable that Mitchell & Hsieh had met at some point, & even possibly shared a fascination (including when sober!) with fantasies of self-immolation. The world is weird. Distressed/depressed people with synergistic delusions can find each other via the internet easier than ever before.
  - kodah 4y ago
    > For example, the drug info isn't from an autopsy, but what some unnamed UC Davis medical staff told Mitchell's grieving mother, and she relayed to the reporter. Kind of, but I wouldn't call that hearsay. If his mother got it from someone credentialed, it's good info. The caveat to that is that toxicology reports can only detect what's screened for. If he were given a research chemical, for instance, or unknowingly ingested one then we'd never know. All of that is not for not though. There's some things to be learned: - if you're planning on doing a new drug or an old drug from a new supplier then test your stuff and start small. If you're messing with hallucinagens then you need a benzo on stand by. - never accept drugs from people at festivals, full stop. - always have a trip sitter that's sober

pfoof 4y ago

I just read "Delivering Happiness" two days ago and learned about Tony's death later

helpfulclippy 4y ago

It’s a real pity. I circulated in the Downtown Tech scene in Las Vegas for a little bit. I felt like it was rather culty, but I also felt he really made people believe in the town’s ability to be more than a tourist destination. At the time, the city was still quite battered from the recession, and there was quite a lot of pessimism. The energy he brought was very needed, and the community he fostered had real energy and hope and value. I made friends then that I still have now, who are very dear to me. I’ve since left town, but I was back last year and walked around the places we all used to hang out… it was very sad to me to see all traces of that community gone, but I was happy I got to be part of it, and to have seen someone with that kind of wealth try to do something to really change their city for the better. Of course, it had problems, and he was throwing money around to make it all work, and as time went on I think much of that money served to conceal those problems rather than confront them… though I never heard stories back then on the scale of what this article describes as happening in Utah. I don’t know really how to feel about the information here, other than very, very sad. I hope despite how he wound up, someone else someday is able to draw inspiration from the parts of what he did that worked and created hope and strengthened the local community, and they can move the ball forward. And I hope wherever Tony is now, he’s free from whatever drove him into such a dark place. Rest in peace.

MichaelZuo 4y ago
Were there any rumours about odd behavioural or personality quirks of Tony at the time? There might have been some indication if the article is true, but I'm not sure.
- helpfulclippy 4y ago
  I didn't know him personally, so I wish I could say I had some firsthand experience. Rumor-wise, there was every story you can imagine. The guy loved the spotlight and was personally bankrolling something that was simultaneously a VC fund and an urban revitalization project, so obviously opinions went all over the board. In the end, he was a Burning Man kind of guy with huge amounts of money, vision and risk tolerance. Put that way, maybe it's not a shock that after the Downtown project collapsed he built a tiny little Bioshock-y dystopia for his clique, and blasted himself stupid with whip-its until he died. And maybe there's a better parallel universe somewhere in which the project succeeded and the right people came around him, and in that timeline's 2023, every billionaire there is cribbing notes about how to recreate what he did in their own city. Neither story is all that inconsistent from what I saw from my very, very distant vantage point as a lowly tech guy at the fringes of the whole thing.

yevpats 4y ago

R.I.P. His book delivering happiness is a good one with a shadow story about depression, and inability to find piece and happiness for oneself.

inDigiNeous 4y ago

Interesting story. Wonder what caused his downfall into insanity. Was Zappos getting a sudden influx of money, giving him too much sense of power and importance ? It's also sad that he felt he had to overachieve, our current system values achievements and work, and many times that goes really out of balance, people trying to become the next multibillionare no matter what, risking their personal health and even leaving them insane in the process like with Tony apparently. This "biohacking your way to 10x" is unfortunately very prevalent in certain circles, and I understand it, but I think as a society and especially in Silicon Valley and in the software development circles we should remember the importance of resting and taking time off. Your body and especially brain can only take so much. It is actually kind of stupid how little is talked about the importance of resting. Thinking all the time takes an immense amount of energy, trying to push that year over year, even for decades, can lead to some really unpleasant states, where you try to start self medicating and finding ways to circumvent the need for rest. I wish there was more talk about taking time off and just being, I bet it would save a lot of people from peer pressure to 10x perform all the time. I think constantly trying to overachieve is one of the sicknesses in our industry, which is not talked nearly enough about.

gojomo 4y ago
Both wealth and drugs can cause small personality quirks, & slight mental instability, to grow in unchecked proportions. Synergistically, especially, they can separate people from familiar moderating social situations, and introduce them to riskier situations & exploitative scenes. Having already become a multibillionaire, it's not clear to me that Hsieh was still driven by any remaining desire or "peer pressure" to "overachieve". He rather seemed unmoored from usual social pressures or limits, and thus unchecked in how absurd his 'business' dealings, personal relationships, & self-exploration could become. Had Hsieh still been seeking conventional success, or "work"/"achievements" legible to sane peers, he may have moderated his actions, or at least not cut himself off from people offering valid concerns.
BenjaminDyer 4y ago
I agree totally with your point about learning to rest. I am a startup founder, do way too many hours, plus family life, social, volunteering etc. The funny thing I am just back from a two day break (viewing universities with my daughter) and that hard stop caused me to get some virus, it always happens. Work so hard to the point you need to stop, stop, get ill. I can't be the only one. Aside from that, it's hard for people lots of people to know when to rest when you have this moronic grind culture buzzing in the background. I despise this crush it, work more, do more things attitude in the start up / tech scene. I would have hoped with a better understanding of peoples mental health this would have vanished by now.

peteforde 4y ago

This is just inestimably sad. His book, "Delivering Happiness" had a massive impact on how I built my companies.

gojomo 4y ago

There's only the testimony of the financial manager (Tony Lee) to imply that Tony Hsieh's brother Andy was "seeking to exploit his brother rather than protect him". So I think it remains plausible that Andy was, in truth, trying to preserve some assets to return to brother, in the hopes there'd eventually be some bottoming-out, possible rehab, & return-to-sanity.

55555 4y ago
There’s the tequila pitch too, but yea, I’d like to be optimistic as well. This whole story is so depressing.

rippercushions 4y ago

> He vowed that anyone who spent his money would be entitled to a 10 percent commission on the amount they spent. If someone booked out a restaurant and spent $1,000 on the tab, for example, they would earn $100. If they recruited someone to live in Park City, they would be entitled to a 10 percent commission on that person’s annual salary. And if someone could source a real estate deal and spent $1 million on the property, that person would earn $100,000. This is, quite literally, the stupidest incentive scheme I've ever heard of.

gojomo 4y ago
Oddly, it's not that different from other commission/finder's-fee systems. (It's also not totally different from the "commission" many governments collect via sales taxes: "everything happening within our nexus owes us 5-10% of the total spend".) If in fact the ultimate spender is reasonably confident that their actual spend decisions fit their values, but they generally aren't finding enough things to spend on, it could even make sense! But of course if the spend-decisions are unhinged/reckless, then this system makes them 10% more wasteful.
- TedDoesntTalk 4y ago
  It incentivizes the purchaser to overpay.
  - gojomo 4y ago
    Totally agreed, but still, finder's fees sometimes work that way – because the actual amount truly paid is considered the least-fakable proxy-signal of value delivered. Similarly, utility-style government regulation often caps profits (or profit-like 'overhead' like salaries) as a percentage of expenditures. This creates an incentive for doing things in an expensive manner. It's kinda dumb, and has been understood as a problem driving excessive costs in regulated industries for many decades. But the same thing was written into 2010's ACA ("Obamacare") as an "80/20 rule": insurers must pay out 80% of what they take in on certain preferred health expenditures, like medical procedures. So, the only legal way to grow the absolute size of the 20% an insurer must use for 'overhead' (including administrative salaries & profits) is to increase the totals paid for health services. That is, insurer management/shareholders can benefit when hospitals/providers charge them more. If the federal government habitually makes this mistake, can we blame Hsieh?

exolymph 4y ago

A tragic tale. It is morbidly fascinating from the outside, the results of combining mental illness with lots of money. I hope his family and other loved ones can find peace and closure at some point.

zpeti 4y ago

One of my mentors was an absolute business genius, who around the first dotcom bubble built many many products, many that were very successful. Then around 27 he started going pretty wierd, and 10 years down the line it turns out he's paranoid schizophrenic, and either takes drugs which greatly dimishes his energy and smartness, or he goes crazy. Many of the crazy money spends and similar of Hsieh sound familiar, it's like the genius just gets more and more wacky ideas until they both get exploited but also destroy themselves. It's such a crazy story for me personally. There's also so many of these around. There's something about genius up until about ~27 years old that then can go completely insane. Seems to me to be linked to the whole 27 club [1] too. Seems like something really changes in our brain chemistry around then. [1] https://en.wikipedia.org/wiki/27_Club https://en.wikipedia.org/wiki/27_Club

pembrook 4y ago

I find it fascinating how permissive openness to new ideas and challenging convention in people like Hsieh is likely both responsible for their success and also their downfall. Even though Hsieh had moved on from Silicon Valley after the first dot-com boom, it's a characteristic I'd apply to the Bay Area in general. Makes me wonder if the line between the folks attempting to disrupt the status quo with their startup and the folks living in tents and experimenting with drug cocktails in the tenderloin isn't in fact razor thin. And conversely, I wonder if by "cleaning up" places like SF, you might also kill the permissive attitudes that make the Bay Area the place to go when you want to birth a new idea.

mjklin 4y ago
SF is a port city and like all port cities has been permissive towards the vices that sailors tend to engage in.

soufron 4y ago

Wow. That gives a lot of perspective on the lack of hindsight from silicon valley apologists who presented Tony and his company as models for everyone to follow. And of course on his book "delivering happiness".

rchaud 4y ago
The SV culture of mythologizing human beings as a 10X this-or-that is definitely something that needs to end.

pjc50 4y ago

The reads like an elder abuse story, except the guy was 46.