[conspire] Silicon Valley IPO ethos

[Rick Moen]

Opinion piece at Slate.com by financial columnist Felix Salmon points
out an uncomfortable truth:  The local startup culture is founded on a
tacit agreement to commit fraud and chicanery (not universal, but
certainly prevalent).  

https://slate.com/business/2018/06/elizabeth-holmes-deserves-prison-but-her-indictment-wont-make-silicon-valley-any-less-reckless.html

The article starts with the news item about now-imploded medical-tech
startup Theranos's founders Elizabeth Holmes and Sunny Balwani finally
getting indicted, on many criminal charges involving wire fraud -- but
then points out they're the tip of the iceberg (many supporting links
available at the original are omitted here):

  Look, for instance, at the long list of startup scandals enumerated by
  Erin Griffith in her December 2016 Fortune article about “the ugly
  unethical underside of Silicon Valley.” Theranos was there, of course,
  but so were, among many others, Hampton Creek; Zenefits; Lending Club;
  Skully; ScoreBig; Rothenberg Ventures; Faraday Future; Hyperloop One;
  and, of course, Uber. Most of those companies ended up embroiled in
  nasty civil lawsuits, but none of them, except for Theranos, ended up
  with criminal charges.

  Holmes and Balwani are being charged with wire fraud, much of which
  boils down to “investors wired you money from out of state when they
  bought shares from you, and you lied to them when you sold them those
  shares, and that’s wire fraud.”

  There’s a reason that prosecutors love to charge individuals with wire
  fraud: It’s one of the easiest crimes to prove. You show the lie, you
  show the wire, and boom—that’s all the jury needs. But the fact is that
  if a U.S. Attorney’s office spent two and a half years examining just
  about any Silicon Valley startup, it would be able to find lies, and
  wires, and therefore wire fraud. Silicon Valley, as Griffith showed in
  her article, is in many ways built on lies, including lies from such
  luminaries as Larry Ellison (a Holmes mentor) and Steve Jobs (a Holmes
  idol). Look at the early history of just about any boldface Silicon
  Valley name, from Bill Gates to Mark Zuckerberg, and you’ll find
  scandals, lies, and the kind of behavior that no one likes to admit to
  in polite company. Silicon Valley’s closets are positively bursting with
  skeletons, and almost everybody in the ecosystem knows it.

The, so to speak, money shot:

  What’s more, they’re all OK with it. If founders lie and make it, then
  everybody gets rich and all is forgiven. If founders lie and fail, then,
  well, most startups fail, and at least they tried everything within
  their power to succeed, including breaking the law.

Exactly.  I saw this exact ethos on full display at one startup I
walked away from in disgust, and am sure that's not unusual at all.

Conclusion of that paragraph:

  That’s why venture capitalist and Holmes mentor Tim Draper will defend
  Holmes to this day:  She exhibited exactly the kind of drive and ambition
  that he wants to see in all founders.

Context:  Theranos was a deliberate total fraud:  Its alleged
revolutionary blood testing technology never worked in the first place, 
and insiders at the firm merely lied about this, faking data, for about
twelve years until the story got blown open by _Wall Street Journal_
reporter, John Carreyrou, whose book on the subject, _Bad Blood: Secrets
and Lies in a Silicon Valley Startup_, came out last month.


FWIW, this is the same Timothy Draper who recentlyy paid a couple of
million dollars to get a California constitutional amendment on the
November 6, 2018 ballot to divide California into three states
(https://www.oag.ca.gov/system/files/initiatives/pdfs/17-0018%20%28Three%20Californias%29_1.pdf),
which ballot proposition I'll analyse in upcoming coverage of the
November ballot at http://linuxmafia.com/~rick/vote.html .

In a nutshell:  There's no point wasting time debating whether the
measure's objective is desirable or not because (1) if passed, it would
be immediately voided as a 'revision' of the state constitution
professing to be a mere 'amendment', and (2) the US Congress would 
never consent, anyway, for political reasons:
http://www.businessinsider.com/how-california-could-become-three-states-cal3-ballot-measure-2018-6

There have been literally hundreds of abortive efforts to split up
California over the state's history, none before getting as far as the
voters.  The most recent of these failures was a 2004 effort, also by
Draper, who spent $5.2 million on a ballot initiative seeking to divide
the state into _six_ pieces.  The group claimed to have gotten 1.3
million signatures, above the 808.000 signatures then required to make
the ballot, but Secetary of State Kevin Shelley found that about 40% of
them were illegitimate, and disqualified the initiative.


Note:  My coverage of the June 5th primary now includes election outcomes.
http://linuxmafia.com/~rick/election-2018-06-05.html

-- 
Rick Moen             "Gosh that takes me back... or is it forward?
rick at linuxmafia.com   That's the trouble with time travel - you never can tell."
McQ!  (4x80)                                                  -- The Doctor