4 ms·

This endorsement of Sam from 2011 is actually pretty damning, though it is so long ago if it were the only thing it wouldn't be a huge red flag: >I just saw Sa

by cma 3y ago

This endorsement of Sam from 2011 is actually pretty damning, though it is so long ago if it were the only thing it wouldn't be a huge red flag: >I just saw Sam Altman speak at YCNYC and I was impressed. I have never actually met him or heard him speak before Monday, but one of his stories really stuck out and went something like this: > "We were trying to get a big client for weeks, and they said no and went with a competitor. The competitor already had a terms sheet from the company were we trying to sign up. It was real serious. > We were devastated, but we decided to fly down and sit in their lobby until they would meet with us. So they finally let us talk to them after most of the day. > We then had a few more meetings, and the company wanted to come visit our offices so they could make sure we were a 'real' company. At that time, we were only 5 guys. So we hired a bunch of our college friends to 'work' for us for the day so we could look larger than we actually were. It worked, and we got the contract." > I think the reason why PG respects Sam so much is he is charismatic, resourceful, and just overall seems like a genuine person. https://news.ycombinator.com/item?id=3048944 https://news.ycombinator.com/item?id=3048944 I think the article mentions what may be this same incident, without saying how it was done: > Rabois noted that Altman, as a Stanford dropout, persuaded a major telecommunications company to do business with his start-up Loopt — the same quality, he said, that enabled Altman to persuade Microsoft to invest in OpenAI. From the earlier comment, it seems he persuaded the telecom essentially through fraud though maybe not legally so.

strangescript 3y ago
Every good CEO is also a Confidence Man/Woman.
- hef19898 3y ago
  No, not really. Not even remotely. Business is ruthless, that's fine. It has to stay clear of fraud and deception. And funny enough, most old school companies do, mowt of the time.
sokoloff 3y ago
I put that in approximately the same place as the founders of Reddit making alts and posting things on early Reddit or Porsche labeling its first-ever car design as Type 7. There's a deceptive "fake it 'til you make it" aspect to both, and both play towards inflating the current appearance of scale/traction/experience, but I don't find them particularly damning.
bhouston 3y ago
This is sort of par for the course in the world of early stage startups. No one wants to be your first customer as it is risky, but you need that first customer. So you "fake it until you make it." It is similar to dressing the part you want - at least when that mattered. You buy more expensive clothes than you should be able to afford so that people think you are more successful than you are, and then they are more willing to bet on you, and then you become more successful. There is nothing that is a red flag for me in the above story. I also had a prospective first client want to visit our offices so I quickly rented an office and asked my part-time contractors to all come into the office that day to fill it out. It worked! And then I could afford an office and hiring those part-time contractors as full-time employees. So it was sort of a self-fulfilling.
- jen20 3y ago
  > There is nothing that is a red flag for me in the above story. Elizabeth? Is that you?
  - refurb 3y ago
    If Elizabeth Holmes had been able to pull off some successful product that made a lot of money, no doubt all the "fake it 'til you make it" she did at the beginning (showing demos that didn't work, sending tests to outside labs and saying they were run on their equipment) would have been forgiven no doubt. Just another nostalgic Silicon Valley "hustler" story.
    - kelipso 3y ago
      She really only got into trouble because her lies became obvious and she risked people's lives. If it was some CRUD app and she didn't get enough customers or whatever, more than likely she'd have gotten money for another company.
      - shapefrog 3y ago
        > she risked people's lives She was found not guilty of that bit. The conviction and jail time is only for defrauding the investors.
ackbar03 3y ago
oh sht, this guy can persuade clients and close deals? Better keep him away from the company!
baq 3y ago
VC capital optimises for revolutionaries thus they get revolutionaries. Please note any positive connotations for the word 'revolution' should be abandoned at this point. Revolutions are short-term 100% bad and long term coin-toss bad, or worse. VCs love those odds.
- notresidenter 3y ago
  What about the industrial revolutions?
hackitup7 3y ago
I'm also neither a Sam Altman booster or detractor, but the types of activities described here (and honestly, sometimes much much worse) are very common at startups.
BeetleB 3y ago
What am I missing? The worst sin is trying to look bigger than they are? You should listen to How I Built This. Tricks like this when starting out are pretty common, be it unicorn startups or personal businesses. So common that founders are openly willing to admit to it on public radio. In almost all cases, both parties came out better. It's not as if the client is at all upset at this "fraudulent" behavior.
neilv 3y ago
I think that level of honesty isn't unusual in Silicon Valley. Personally, if I were the prospective customer, I'd be angry at being lied to, and my message to my team would probably be that we'd be foolish to depend on this startup after they've shown from the start that they're dishonest. If I were an established company, I think I'd also have our lawyers look at situation, to make sure the institutional knowledge was captured, and to see whether there's anything else we needed to do. (For example of something else to do: though I'd treat things as confidential by default, in some future n-ary relationship/deal, is there a situation in which I'm obligated to mention to a third company that we previously had negative vetting info on the other company.) But in the context of current startup culture, I don't think "fake (fraud) it till make it" is that unusual. And it's been normalized. But I still don't want to do business with dishonest startup founders -- whether it's because they're naturally lying liars, or because they're surrounded by frequent dishonesty and they're not smart enough to cut through that.
tibbydudeza 3y ago
Remember BillG sold an OS to IBM for the Intel 8086 that was not even owned or written by Microsoft at the time.
- cma 3y ago
  And somewhat ringing of these current events, his mom was on a charity board with the head of IBM.

by cma 3y ago

strangescript 3y ago

Every good CEO is also a Confidence Man/Woman.

hef19898 3y ago
No, not really. Not even remotely. Business is ruthless, that's fine. It has to stay clear of fraud and deception. And funny enough, most old school companies do, mowt of the time.

sokoloff 3y ago

I put that in approximately the same place as the founders of Reddit making alts and posting things on early Reddit or Porsche labeling its first-ever car design as Type 7. There's a deceptive "fake it 'til you make it" aspect to both, and both play towards inflating the current appearance of scale/traction/experience, but I don't find them particularly damning.

bhouston 3y ago

This is sort of par for the course in the world of early stage startups. No one wants to be your first customer as it is risky, but you need that first customer. So you "fake it until you make it." It is similar to dressing the part you want - at least when that mattered. You buy more expensive clothes than you should be able to afford so that people think you are more successful than you are, and then they are more willing to bet on you, and then you become more successful. There is nothing that is a red flag for me in the above story. I also had a prospective first client want to visit our offices so I quickly rented an office and asked my part-time contractors to all come into the office that day to fill it out. It worked! And then I could afford an office and hiring those part-time contractors as full-time employees. So it was sort of a self-fulfilling.

jen20 3y ago
> There is nothing that is a red flag for me in the above story. Elizabeth? Is that you?
- refurb 3y ago
  If Elizabeth Holmes had been able to pull off some successful product that made a lot of money, no doubt all the "fake it 'til you make it" she did at the beginning (showing demos that didn't work, sending tests to outside labs and saying they were run on their equipment) would have been forgiven no doubt. Just another nostalgic Silicon Valley "hustler" story.
  - kelipso 3y ago
    She really only got into trouble because her lies became obvious and she risked people's lives. If it was some CRUD app and she didn't get enough customers or whatever, more than likely she'd have gotten money for another company.
    - shapefrog 3y ago
      > she risked people's lives She was found not guilty of that bit. The conviction and jail time is only for defrauding the investors.

ackbar03 3y ago

oh sht, this guy can persuade clients and close deals? Better keep him away from the company!

baq 3y ago

VC capital optimises for revolutionaries thus they get revolutionaries. Please note any positive connotations for the word 'revolution' should be abandoned at this point. Revolutions are short-term 100% bad and long term coin-toss bad, or worse. VCs love those odds.

notresidenter 3y ago
What about the industrial revolutions?

hackitup7 3y ago

I'm also neither a Sam Altman booster or detractor, but the types of activities described here (and honestly, sometimes much much worse) are very common at startups.

BeetleB 3y ago

What am I missing? The worst sin is trying to look bigger than they are? You should listen to How I Built This. Tricks like this when starting out are pretty common, be it unicorn startups or personal businesses. So common that founders are openly willing to admit to it on public radio. In almost all cases, both parties came out better. It's not as if the client is at all upset at this "fraudulent" behavior.

neilv 3y ago

I think that level of honesty isn't unusual in Silicon Valley. Personally, if I were the prospective customer, I'd be angry at being lied to, and my message to my team would probably be that we'd be foolish to depend on this startup after they've shown from the start that they're dishonest. If I were an established company, I think I'd also have our lawyers look at situation, to make sure the institutional knowledge was captured, and to see whether there's anything else we needed to do. (For example of something else to do: though I'd treat things as confidential by default, in some future n-ary relationship/deal, is there a situation in which I'm obligated to mention to a third company that we previously had negative vetting info on the other company.) But in the context of current startup culture, I don't think "fake (fraud) it till make it" is that unusual. And it's been normalized. But I still don't want to do business with dishonest startup founders -- whether it's because they're naturally lying liars, or because they're surrounded by frequent dishonesty and they're not smart enough to cut through that.

tibbydudeza 3y ago

Remember BillG sold an OS to IBM for the Intel 8086 that was not even owned or written by Microsoft at the time.

cma 3y ago
And somewhat ringing of these current events, his mom was on a charity board with the head of IBM.