5 ms·

Reminds me of working for MCI-Worldcom. When you think you’re working for crooks, you probably are. Run away.

by siskiyou 3y ago

boppo1 3y ago
Tell a naive young guy more. What are the red flags?
- ansible 3y ago
  Spending money like water to make a big splash with advertising, sponsorships and such. But really, anything to do with crypto or NFTs should be a red flag at this point.
- atoav 3y ago
  I think a big one is if nobody can explain you where the money is supposed to come from. If it is all hand-wavy and nobody can explain what that company is doing get out. In the best case it was legal, but they are incompetent morons.
- danielfoster 3y ago
  I'm studying for my CFE (Certified Fraud Examiner) and can shed some light on this. As others mentioned, unexplainable business models or money coming out of nowhere are major red flags. A few others to look out for if you are applying for a job: 1. Few or no internal controls. A medium-size or larger company not having a CFO is particularly questionable. 2. People in high positions, including the CEO, lack qualifications or experience. Often the CEO will hire inexperienced or incompetent people for high-level positions because they a) won't figure out what is going on or b) can figure it out, but are too grateful for the position to say anything. Or maybe the CEO never finished college in a field where everyone has a PhD (think Elizabeth Holmes). 3. History of experienced / qualified people joining the company and leaving soon after 4. Seemingly unexplained success. 5. Extravagant spending and inappropriate workplace behavior. 6. Cult of loyalty to the CEO and/or a "circle" around this person, including close interpersonal relationships.
  - maeln 3y ago
    Well now, you just described a lot of SF startup.
    - mjburgess 3y ago
      This is a symptom of hype-based valuations. The pipeline into our collective understanding of tech is now: scifi hype pitch -> VC flood of investment -> press releases across world -> governments worry -> disappointing IPO -> malpractice -> one or more execs arrested/sacked -> media elite across world convinced new invention will destroy the world uber creates a taxi service, amazon an online mall, openai a ghost writer -- and we're all subject to an industry of VC hype men desperately trying to get those multiples above 20x by assaulting the popular consciousness with delusional BS
    - vkou 3y ago
      Most of them only have 'wild and inexplicable success' on some internal metric, they generally don't claim to have magically found a way to make billions of dollars on 'arbing btc in Tokyo'.
    - otabdeveloper4 3y ago
      Apple isn't really a startup now.
    - danielfoster 3y ago
      I thought about this as I wrote my comment! Of course a red flag is not always a reliable indicator of fraud.
      - wussboy 3y ago
        Give it time.
  - mattmanser 3y ago
    You can watch a good example of this in the Netflix mini-series on Madoff. Really shows how he did it using the steps detailed above. https://www.netflix.com/title/81466159?preventIntent=true https://www.netflix.com/title/81466159?preventIntent=true The Wolf of wall street film also shows the same pattern.
- sgammon 3y ago
  1. When you cannot explain how, mechanically the business works 2. Management is elusive, opaque 3. Employees are lax about controls, compliance, even morality If your gut says they might be criminals, they are probably criminals.
- Ekaros 3y ago
  Far reaching stories of how money is made and the numbers don't actually make any sense. Or it is all financialization. Also unrealistic profits. Without known number of paying customers and known spending.
- omginternets 3y ago
  I think the hard part of this for naive young people is that you have to actually do some investigation. This should be front-and-center during your interview process. When they get around to asking if you have any questions for them, you should take that opportunity to see if this is a serious place.
- siskiyou 3y ago
  Worldcom acquired the company I worked for. I saw their culture featured all manner of players, hustlers, empire builders, untouchable princes, etc. battling for turf. Lords and serfs. The stock was supposed to always go up. "Genius" businessmen somehow figured out how to print money where others had not. The company had a mutual fund that only held Worldcom stock in the 401(k) retirement plan. That was a huge red flag for me and it resulted in many of my colleagues losing their retirement savings. I was far from the levers of power but I had a really bad feeling about the leadership and left before the crash. Since then I have always instantly liquidated all options and stock grants and put them in safer investments. That can be a hard decision to make when you see many people getting rich (perhaps temporarily, perhaps not) betting on the equity to keep improving. But I kept expenses low, saved a lot, and still retired at 49 so I'm happy with how it turned out even if I passed on some big gains.
_adzo 3y ago
Worked in crypto and I got that vibe so left. Regret it. For every SBF there are hundreds who get away with it. Tons of talentless crypto millionaires still roaming free. Look at the Axie Infinite guys plundering a whole country. Token could collapse, but there’ll be no justice and they’re sitting on at least 8 figures individually
- spaceman_2020 3y ago
  The smart ones leave an exploit in their smart contracts, exploit it themselves, then blame North Korea
  - webmaven 3y ago
    This is known as a "bugdoor".
- hagbarth 3y ago
  Wait. Do you regret leaving? Because the fraud works out for some?
  - jesterson 3y ago
    [flagged]
    - wolverine876 3y ago
      That is a weak justification, commonly used by criminals. A liar might say, 'everyone lies'; honest people don't say it. Unless we are engaging in a very philsophical discussion (possible on HN), we don't need to explain the problem in detail.
      - jesterson 3y ago
        It's not a "justification" of anything, just a question for someone who blames other people industry as fraud. Just curious about way of thinking, nothing else. And everyone lies indeed, those who deny it are either delusional or liars. It's human nature.
deltarholamda 3y ago
Worldcom had a business model that was ahead of its time. Show growth, raise stock price, use stock to buy companies, grow, rinse and repeat. It worked great until regulators disallowed the Sprint purchase because it would have put too much of the long-distance market in one company. (And as we all know, we stress a lot about choosing our long-distance carrier these days.) Then all of the somewhat shady side-deals became concerning, as WCOM was no longer growing like it was. Then people started looking more closely at the financials. Then it all went kerflooey. It was ahead of its time because it's not that different from tech companies today, only replace business growth with user growth. Profits? Ha ha ha, don't be silly.
- StressedDev 3y ago
  Worldcom was a fraud. I believe they were caught inflating their earnings (i.e. saying they made more money than they really did). This was not a business model “ahead of its time”. It’s a crime.

Reminds me of working for MCI-Worldcom. When you think you’re working for crooks, you probably are. Run away.

boppo1 3y ago

Tell a naive young guy more. What are the red flags?

ansible 3y ago
Spending money like water to make a big splash with advertising, sponsorships and such. But really, anything to do with crypto or NFTs should be a red flag at this point.
atoav 3y ago
I think a big one is if nobody can explain you where the money is supposed to come from. If it is all hand-wavy and nobody can explain what that company is doing get out. In the best case it was legal, but they are incompetent morons.
danielfoster 3y ago
I'm studying for my CFE (Certified Fraud Examiner) and can shed some light on this. As others mentioned, unexplainable business models or money coming out of nowhere are major red flags. A few others to look out for if you are applying for a job: 1. Few or no internal controls. A medium-size or larger company not having a CFO is particularly questionable. 2. People in high positions, including the CEO, lack qualifications or experience. Often the CEO will hire inexperienced or incompetent people for high-level positions because they a) won't figure out what is going on or b) can figure it out, but are too grateful for the position to say anything. Or maybe the CEO never finished college in a field where everyone has a PhD (think Elizabeth Holmes). 3. History of experienced / qualified people joining the company and leaving soon after 4. Seemingly unexplained success. 5. Extravagant spending and inappropriate workplace behavior. 6. Cult of loyalty to the CEO and/or a "circle" around this person, including close interpersonal relationships.
- maeln 3y ago
  Well now, you just described a lot of SF startup.
  - mjburgess 3y ago
    This is a symptom of hype-based valuations. The pipeline into our collective understanding of tech is now: scifi hype pitch -> VC flood of investment -> press releases across world -> governments worry -> disappointing IPO -> malpractice -> one or more execs arrested/sacked -> media elite across world convinced new invention will destroy the world uber creates a taxi service, amazon an online mall, openai a ghost writer -- and we're all subject to an industry of VC hype men desperately trying to get those multiples above 20x by assaulting the popular consciousness with delusional BS
  - vkou 3y ago
    Most of them only have 'wild and inexplicable success' on some internal metric, they generally don't claim to have magically found a way to make billions of dollars on 'arbing btc in Tokyo'.
  - otabdeveloper4 3y ago
    Apple isn't really a startup now.
  - danielfoster 3y ago
    I thought about this as I wrote my comment! Of course a red flag is not always a reliable indicator of fraud.
    - wussboy 3y ago
      Give it time.
- mattmanser 3y ago
  You can watch a good example of this in the Netflix mini-series on Madoff. Really shows how he did it using the steps detailed above. https://www.netflix.com/title/81466159?preventIntent=true https://www.netflix.com/title/81466159?preventIntent=true The Wolf of wall street film also shows the same pattern.
sgammon 3y ago
1. When you cannot explain how, mechanically the business works 2. Management is elusive, opaque 3. Employees are lax about controls, compliance, even morality If your gut says they might be criminals, they are probably criminals.
Ekaros 3y ago
Far reaching stories of how money is made and the numbers don't actually make any sense. Or it is all financialization. Also unrealistic profits. Without known number of paying customers and known spending.
omginternets 3y ago
I think the hard part of this for naive young people is that you have to actually do some investigation. This should be front-and-center during your interview process. When they get around to asking if you have any questions for them, you should take that opportunity to see if this is a serious place.
siskiyou 3y ago
Worldcom acquired the company I worked for. I saw their culture featured all manner of players, hustlers, empire builders, untouchable princes, etc. battling for turf. Lords and serfs. The stock was supposed to always go up. "Genius" businessmen somehow figured out how to print money where others had not. The company had a mutual fund that only held Worldcom stock in the 401(k) retirement plan. That was a huge red flag for me and it resulted in many of my colleagues losing their retirement savings. I was far from the levers of power but I had a really bad feeling about the leadership and left before the crash. Since then I have always instantly liquidated all options and stock grants and put them in safer investments. That can be a hard decision to make when you see many people getting rich (perhaps temporarily, perhaps not) betting on the equity to keep improving. But I kept expenses low, saved a lot, and still retired at 49 so I'm happy with how it turned out even if I passed on some big gains.

_adzo 3y ago

Worked in crypto and I got that vibe so left. Regret it. For every SBF there are hundreds who get away with it. Tons of talentless crypto millionaires still roaming free. Look at the Axie Infinite guys plundering a whole country. Token could collapse, but there’ll be no justice and they’re sitting on at least 8 figures individually

spaceman_2020 3y ago
The smart ones leave an exploit in their smart contracts, exploit it themselves, then blame North Korea
- webmaven 3y ago
  This is known as a "bugdoor".
hagbarth 3y ago
Wait. Do you regret leaving? Because the fraud works out for some?
- jesterson 3y ago
  [flagged]
  - wolverine876 3y ago
    That is a weak justification, commonly used by criminals. A liar might say, 'everyone lies'; honest people don't say it. Unless we are engaging in a very philsophical discussion (possible on HN), we don't need to explain the problem in detail.
    - jesterson 3y ago
      It's not a "justification" of anything, just a question for someone who blames other people industry as fraud. Just curious about way of thinking, nothing else. And everyone lies indeed, those who deny it are either delusional or liars. It's human nature.

deltarholamda 3y ago

Worldcom had a business model that was ahead of its time. Show growth, raise stock price, use stock to buy companies, grow, rinse and repeat. It worked great until regulators disallowed the Sprint purchase because it would have put too much of the long-distance market in one company. (And as we all know, we stress a lot about choosing our long-distance carrier these days.) Then all of the somewhat shady side-deals became concerning, as WCOM was no longer growing like it was. Then people started looking more closely at the financials. Then it all went kerflooey. It was ahead of its time because it's not that different from tech companies today, only replace business growth with user growth. Profits? Ha ha ha, don't be silly.

StressedDev 3y ago
Worldcom was a fraud. I believe they were caught inflating their earnings (i.e. saying they made more money than they really did). This was not a business model “ahead of its time”. It’s a crime.