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A messaging app startup that raised $200M shuts down afters users were 95% fake
- vincengomes 3y agoThe name of the App is IRL. It boasts of 10M+ downloads in Google Play
- zanek 3y ago[flagged]
- pram 3y agoOh word?
- hotpotamus 3y agoI remember this being a significant plot point in "Silicon Valley". I suppose life imitates art imitating life.
- pizza 3y agoSuccession, too!
- somedude895 3y agoIt even happened before with an app called Frank, where JP Morgan fell for it: https://news.yahoo.com/jpmorgan-claims-scammed-student-loan-155000159.html https://news.yahoo.com/jpmorgan-claims-scammed-student-loan-...
- fancyfredbot 3y agoThat didn't go well for anyone involved.
- WheelsAtLarge 3y agoI guess this is the way to get rich quick now. Imagine a company with millions of fake users all created by a LLM app.
- thumbuddy 3y agoAlready happening to some extent
- RGBCube 3y agoHey, Reddit was all fake users at the start, making people think it was active and persuading them to join.
- xingped 3y agoDust to dust, ashes to ashes.
- kkielhofner 3y agoYouTube famously spent many of their first years turning a blind eye to blatant copyright infringement. Shady “growth hacking” is more the norm than not for many of these early stage social companies that have chicken/egg Metcalfe’s Law issues for user adoption.
- rchaud 3y agoYouTube had to have an informal deal worked something out with the studios. Circa 2004, the internet was awash in streaming video sites with copyrighted Family Guy and Futurama clips, which were often taken down. Then boom, one day those sites themselves go offline, and that content all moves to Youtube, where it stays up.
- maeil 3y agoYou remember the timeline very differently than I do. Dailymotion, just to give one example, was full of such content until at least 2010.
- pratchett 3y agoHow are messaging apps still getting these valuations when Telegram, signal, Whatsapp and lime chat exist?
- vinyl7 3y agoThe economy is detached from reality
- ido 3y agothis was also 2 years ago, at the peak of the madness. These days it's far less likely to get that kind of money.
- happymellon 3y agoOnly one of those doesn't require your phone number. It'll be nice when we get to the point where we can have a proper working chat app that doesn't require one. Hangouts used to be great but Google has to always make sure their chat doesn't work.
- flangola7 3y agoWithout a phone number how do you prevent abuse and spam?
- rkho 3y agoYou can purchase access to phone numbers for the purposes of verifying accounts. While phone numbers are a method to prevent easy sybil attacks, it is not effective when dealing with a determined actor.
- irl_chad 3y agoIt raises the cost for any spammer, including determined actors. More code, more complexity, plus the cost to actually rent the numbers. A lot of tech bros need to touch grass and realize that the rest of the world doesn’t mind giving their phone number to a chat app.
- valianteffort 3y agoAre softbank actually the biggest idiots in VC? It almost seems like everything they invest in is a handshake deal built on "just trust me bro" numbers.
- motoxpro 3y agoNot just SoftBank. Founders Fund too.
- fakedang 3y agoFounders Fund offloads it onto the next guy though. And very well too (looking at you, StemCentrx and AbbVie).
- rasz 3y agosomeone sure is >Masayoshi Son. He had for many years the distinction of being the person who had lost the most money in history (more than $59bn[38] during the dot com crash of 2000 alone, when his SoftBank shares plummeted),[39] a feat surpassed by Elon Musk[40][41][42] in the following decades.
- ProllyInfamous 3y agoLOL I personally know an asshat VP at SoftBank — "just trust me bruh" ! In early 2017, while being ousted from another banking system, he advised me to invest in a Retail Mall Holdings company, instead of Bitcoin (because the latter is "idiotic"). I did NOT take his advice. See CBL's returns verse BTC's.
- axus 3y agoWow, 0HQK has a very interesting chart. I wonder what happened in November 2021.
- CharlieDigital 3y agoI have brought this up in another comment, but my experience in the VC world is that it operates too heavily based on 4 types of "trust": 1) Institutional trust (Stanford, Harvard, MIT, "ex-FAANG", "ex-McKinsey", etc.), 2) Social trust (someone you know that has already established one of the three other kinds of trust), 3) Serial trust ("3-exits", "former CEO/CTO/VP of..."), and 4) Transitive trust ("Sequoia invested in X; I trust Sequoia; therefore, I should invest in X") In many cases, this trust makes perfect sense. But it seems that in more than a handful of high profile cases, these types of investments based on trust has superseded basic due diligence, skepticism, and common sense.
- re-thc 3y agoWhat was the remaining 5% real users? The employees, investors and friends and family off?
- bruceb 3y ago5% is 1m users. IRL was advertised on UFC PPV. There are some people on it just not enough to warrant that valuation.
- impissedoff1 3y ago[flagged]
- falloutx 3y agoWhy is it always Softbank getting scammed?
- cvhashim04 3y agoLack of due diligence?
- marcus0x62 3y agoAnybody who has seen a Masayoshi-son presentation and then gives SoftBank capital to invest deserves whatever loss they take. https://www.businessinsider.com/13-slides-softbanks-vision-for-next-300-years-2017-10?op=1 https://www.businessinsider.com/13-slides-softbanks-vision-f... https://finance.yahoo.com/news/golden-geese-unicorns-inside-eccentric-210015332.html https://finance.yahoo.com/news/golden-geese-unicorns-inside-...
- stanford_labrat 3y agoi don't understand how a presentation like this (and by extension, the company) can somehow accrue nearly 70 billion in market cap. perhaps it is so genius i cannot even comprehend.
- marcus0x62 3y agoPerhaps. Or perhaps nobody wants to admit publicly that they don’t get it either, and don’t want to miss all that sweet, sweet, alpha that gets generated when SoftBank figures out how to enable telepathic communication. There may also be a fair amount of The Common Knowledge Game[0] going on. 0 - https://www.epsilontheory.com/harvey-weinstein-common-knowledge-game/ https://www.epsilontheory.com/harvey-weinstein-common-knowle...
- sam1r 3y agohttp://archive.today/liPtm http://archive.today/liPtm
- costanzaDynasty 3y agoEveryone on and around social media wants new and better forms of social media. I think the average person thinks social media is the drizzling shits but if they have to use it, they'll just stick to the large platforms.
- thephyber 3y agoI think some users certainly act as you describe, but I suspect the majority of users will follow the early adopters after they identify and popularize a better mousetrap. The history of social media platforms suggests to me that users are fickle and have no strong connection to any platform. Friendster, MySpace, Facebook each had their moment and then most users either left the platform or spend more time on other platforms. We are in an interesting phase where lots of different new platforms are experimenting with differentiation strategies. There is a whole ecosystem of “political right” social media (Truth Social, Gab, Parlor, Rumbl, etc). The federated social media platforms are selling the “you won’t lose access to everything due to moderation/banning” niche. I’m sure there are Web3 (the blockchain one) social media platforms, but I can’t be bothered to look into their details.
- autokad 3y agoI always felt like the big switch from myspace to facebook came because facebook had a lot of games and apps that you could play and use on the platform. ironically, because facebook took such a big cut, all those apps have gone away. for facebook to be displaced, an app has to offer something else facebook isn't offering, and most new apps offer less - going for the simpler approach. I think that's a loosing strategy myself. I remember how long I used msn messenger just because it had the email tied into it at the time. You need to offer more, not less.
- tomsmeding 3y agoThat's easy. Everyone on about computers as a thing wants newer and better computers. The average person thinks computers are crappy and stick to the large platforms if they have to use them. s/computers/furniture/, or kitchen ware (cooking), or any other daily thing that some people have significantly above-average interest in. This also goes for software: word processors, machine learning frameworks, browsers.
- sharadov 3y agoI interviewed there a couple years back and a lot of things seemed really fishy. They did not give answers to a lot of my questions. So my spidey sense was right!
- jasonlotito 3y agoFake it till you make it, right?
- jarym 3y ago> “Oh, man, the number of times I’ve been asked why my company isn’t growing as fast as X and then found out X was a fraud all along.” This, in sports, finance, startups - everywhere. Dirty players skew the dynamics of any system leading to worse outcomes for those that choose to remain honest. We need the supposed ‘smartest guys in the room’ to be less dumb and do due diligence and we need strong consequences for founders that misstate their company’s position.
- smartest-on-hn 3y ago[flagged]
- myth2018 3y ago> We need the supposed ‘smartest guys in the room’ to be less dumb Indeed. Many don't quite understand technology, and investors are no exception. There are smart ones, but those not necessarily make good investments -- they may simply look for good future exits and leave the bomb on the laps of the next suckers.
- cyanydeez 3y agoWelcome to wealth inequality consequences #356433
- suction 3y ago[dead]
- mejutoco 3y agoReddit famously started with a lot of fake users. I think the founders mentioned it in an interview. Even the Swedish guy from the show Succession was inflating his numbers. And those attributed clicks from Facebook (especially fb) and Google, better not to look too close.
- pests 3y agoThanks for the spoiler. :(
- beezlewax 3y agoHappens in the show Silicon Valley too.
- han-tyumi 3y agoReddit is a little different as their intention was to populate the platform with content in the early days [1], not to mislead investors with fake metrics. Mind you that Huffman and Ohanian did this manually, while founders today can use LLMs to fill their platforms with bots that can interact "naturally" with users. I wonder how many are already doing it. [1] https://www.youtube.com/watch?v=zmeDzx4SUME https://www.youtube.com/watch?v=zmeDzx4SUME
- kevinventullo 3y agoI have no real proof, but based on the volume of replies/likes I get on throwaway comments, I strongly believe TikTok does this.
- Havoc 3y ago>funding round led by SoftBank Vision Fund 2 Oh dear. I wonder if there will be a Fund 3
- lizknope 3y ago> Two years ago, a messaging app startup called IRL reached a $1.2 billion valuation > Earlier this year, a former employee alleged that IRL—the name stands for “in real life”— had fired him after he voiced concerns that many users were bots It's hilarious that "In Real Life" was 95% bots.
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