4 ms·

From the footnotes: > There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and bec

by debo_ 3y ago

From the footnotes: > There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and because y is a fraud? Look at neutral opinion. Actual frauds are usually pretty conspicuous. Thoughtful people are rarely taken in by them. So if there are some thoughtful people who like y, you can usually assume y is not a fraud. I guess all those folks calling these guys "frauds" weren't "thoughtful" enough.

choppaface 3y ago
Same with FTX, VCs projected themselves as thought leaders buying into FTX and then it turned out they had never even thought
amadeuspagel 3y ago
Graham also wrote Crazy New Ideas[1] in response to criticism of Mighty, in which he claimed that if "reasonable domain experts" propose an idea it can't be crazy. [1]: https://paulgraham.com/newideas.html https://paulgraham.com/newideas.html
pge 3y ago
I wish PG was right about this, but there are plenty of examples of frauds that were not conspicuous and took in lots of thoughtful people (Bernie Madoff being one of the most obvious and public examples).
- deleted 3y ago
  [deleted]
beej71 3y ago
(Edit: I've been informed on a side channel that non-disparagement clauses can no longer be enforced. IANAL--can someone elaborate?) As someone who was a low-ranking insider at Lambda some years back, it was my perception that the people calling Lambda out presented a mixed bag in terms of veracity. Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs. With respect to this ruling, it says that students were subjected to up to $4,000 finance charges. I hadn't heard of that at all. Reading the details, it turns out that's the difference between the published upfront cost of paying Lambda versus using an ISA. The upfront cost wasn't hidden; it was published right next to the ISA cost. But because they weren't the same value, and it was probably more expensive to use the ISA, they called the difference a finance charge. Which is fine, but if Lambda had simply not allowed people to pay upfront, there wouldn't have been a "finance charge" to complain about. In other words the finance charge was already published in the rules for how the ISA would be repaid. So, factually accurate, but a strange thing to complain about, like complaining that the upfront cost of a house is lower than the mortgage cost. Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. So selling them didn't really remove any of Lambda's impetus to place students in jobs. (It did improve the cash flow situation, however, which is why it happened.) From what I saw, the goal of placing students was ever-present regardless of whether or not Lambda was currently selling ISAs. My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not. One thing I can say with certainty is that all the instructors who worked there back in the day were absolutely fucking passionate about getting students into jobs and changing the world, in that naive startup way. Some of the success stories from those early cohorts are the things I'm most proud of in my entire tech and teaching career. As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.
- sandofsky 3y ago
  > Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs. That's true. A source of confusion is that the school did hire at least one bootcamp graduate as an instructor, though he graduated from a different bootcamp. And it's worth pointing out that the marketing material promised world class instruction, and a fresh bootcamp grad with zero industry experience is the very opposite of that. For that matter, the head of the data science program was the CEO's brother, whose only industry experience was from a no-name company in Utah. > With respect to this ruling... It's a waste of time to argue the semantics of income share agreements at this point. They always operated in a gray area, which is why Lambda School hired lobbiests to try to make them officially legal. That effort failed, and the law has decided they're just another form of loans with convoluted hoops to jump through. I imagine that they got that $4,000 number from all the people who attended the program, received zero practical skills to get jobs, went on to further training (another bootcamp or even an associates degree) and still had to pay back the company because the terms of the ISAs lasted anywhere from five to eight years. > Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened. The issue is that it fooled prospective students into thinking, "Hey, if this company is able to run off ISAs, the program must work!" In fact the company made money by leaving hedge funds as bag holders. > My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not. The same is probably true of Bernie Madoff, Charles Ponzi, and Sam Bankman-Fried. When someone acts like a sociopath for long enough, people start to assume that everything they do is unethical. There is a long list of crimes that the company committed which have been verified from multiple sources. A few people on the internet getting the details wrong doesn't invalidate that. > As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance. They did the same thing to students who scrounge together the money to hire a lawyer to get out of their ISAs. These students had to any reference to Lambda School from their LinkedIn profile and tell nobody about what happened. While you did it to make money, imagine how it would feel sign away your right to free speech for fear of a $30,000 debt.
Tommah 3y ago
This is pretty poor writing by PG here. What is "neutral opinion"... fact? Or the people who answer "I don't know" in political polls? And saying "Actual frauds are usually pretty conspicuous" is silly. If an attempt at fraud were really obvious, it wouldn't trick many people. The big frauds are the ones that are outwardly plausible and therefore trick lots of people.

by debo_ 3y ago

choppaface 3y ago

Same with FTX, VCs projected themselves as thought leaders buying into FTX and then it turned out they had never even thought

amadeuspagel 3y ago

Graham also wrote Crazy New Ideas[1] in response to criticism of Mighty, in which he claimed that if "reasonable domain experts" propose an idea it can't be crazy. [1]: https://paulgraham.com/newideas.html https://paulgraham.com/newideas.html

pge 3y ago

I wish PG was right about this, but there are plenty of examples of frauds that were not conspicuous and took in lots of thoughtful people (Bernie Madoff being one of the most obvious and public examples).

deleted 3y ago
[deleted]

beej71 3y ago

(Edit: I've been informed on a side channel that non-disparagement clauses can no longer be enforced. IANAL--can someone elaborate?) As someone who was a low-ranking insider at Lambda some years back, it was my perception that the people calling Lambda out presented a mixed bag in terms of veracity. Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs. With respect to this ruling, it says that students were subjected to up to $4,000 finance charges. I hadn't heard of that at all. Reading the details, it turns out that's the difference between the published upfront cost of paying Lambda versus using an ISA. The upfront cost wasn't hidden; it was published right next to the ISA cost. But because they weren't the same value, and it was probably more expensive to use the ISA, they called the difference a finance charge. Which is fine, but if Lambda had simply not allowed people to pay upfront, there wouldn't have been a "finance charge" to complain about. In other words the finance charge was already published in the rules for how the ISA would be repaid. So, factually accurate, but a strange thing to complain about, like complaining that the upfront cost of a house is lower than the mortgage cost. Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. So selling them didn't really remove any of Lambda's impetus to place students in jobs. (It did improve the cash flow situation, however, which is why it happened.) From what I saw, the goal of placing students was ever-present regardless of whether or not Lambda was currently selling ISAs. My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not. One thing I can say with certainty is that all the instructors who worked there back in the day were absolutely fucking passionate about getting students into jobs and changing the world, in that naive startup way. Some of the success stories from those early cohorts are the things I'm most proud of in my entire tech and teaching career. As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.

sandofsky 3y ago
> Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs. That's true. A source of confusion is that the school did hire at least one bootcamp graduate as an instructor, though he graduated from a different bootcamp. And it's worth pointing out that the marketing material promised world class instruction, and a fresh bootcamp grad with zero industry experience is the very opposite of that. For that matter, the head of the data science program was the CEO's brother, whose only industry experience was from a no-name company in Utah. > With respect to this ruling... It's a waste of time to argue the semantics of income share agreements at this point. They always operated in a gray area, which is why Lambda School hired lobbiests to try to make them officially legal. That effort failed, and the law has decided they're just another form of loans with convoluted hoops to jump through. I imagine that they got that $4,000 number from all the people who attended the program, received zero practical skills to get jobs, went on to further training (another bootcamp or even an associates degree) and still had to pay back the company because the terms of the ISAs lasted anywhere from five to eight years. > Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened. The issue is that it fooled prospective students into thinking, "Hey, if this company is able to run off ISAs, the program must work!" In fact the company made money by leaving hedge funds as bag holders. > My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not. The same is probably true of Bernie Madoff, Charles Ponzi, and Sam Bankman-Fried. When someone acts like a sociopath for long enough, people start to assume that everything they do is unethical. There is a long list of crimes that the company committed which have been verified from multiple sources. A few people on the internet getting the details wrong doesn't invalidate that. > As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance. They did the same thing to students who scrounge together the money to hire a lawyer to get out of their ISAs. These students had to any reference to Lambda School from their LinkedIn profile and tell nobody about what happened. While you did it to make money, imagine how it would feel sign away your right to free speech for fear of a $30,000 debt.

Tommah 3y ago

This is pretty poor writing by PG here. What is "neutral opinion"... fact? Or the people who answer "I don't know" in political polls? And saying "Actual frauds are usually pretty conspicuous" is silly. If an attempt at fraud were really obvious, it wouldn't trick many people. The big frauds are the ones that are outwardly plausible and therefore trick lots of people.