I struggle to understand the psychology of how founders who are clearly incompetent charlatans get second+ chances -- they couldn't do fraud successfully but investors have a faith they could do business successfully. But they still get funding (like adam neumann of wework fame) and full on "narrative tongue baths" by the business media community (like this wsj article on trevor milton).
Why? I struggle to understand the incentives + motivations here.
The past failure is in the abstract, and in the past. And anyway, they were unfairly maligned. There is an inside version of the story that they will be happy to tell you, which was clearly not their fault.
But that is neither here nor there. What is important is the now, and in the now you are in the presence of someone who is Good At Making Money. And you too, by joining forces, will be Making Lots Of Money with this charismatic person, who can clearly achieve great things and will be clearly avoiding any past missteps that may have caused their downfall right before reaching greatness (but weren’t their fault anyway).
It's hard for me to tell because I've seen this multiple times in my career (in tech). People wasting investors' money getting funding over and over while those actually building stuff get suppressed.
I swear there are some people who control a lot of money who are just having fun ruining people's lives for laughs.
There are people who spend years working for some company, betting their career on it but it turns out the whole thing was some kind of inside joke.
My view is that some companies are basically somebody's toy and the employees are part of the entertainment like a personal reality TV show for some rich person so they can play-act as a hotshot entrepreneur.
Probably it serves as some kind of inflation control mechanism. If you have a lot of money and want to spend it without driving inflation, you have to find things with extreme diminishing returns and you have to invest in people who value such things.
The reason for this is the same as why real estate is so expensive and the price of gold is so high. There is far too much capital accumulation among the ultra-wealthy, who don’t know what to do with all that money. The expertise of someone like this founder lies simply in recognizing that this is the case and that it can be monetized.
There was a great Money Stuff blurb about that w/r/t Adam Neumann. I can't find it to quote it directly, but the gist was that if you disabuse yourself of the notion that Neumann was playing a game of entrepreneurship and good-faith empire building, and instead conclude that the game he was playing was shameless capital extraction, every step and action he took suddenly makes sense.
The truly amazing thing, especially the second time around, are the supposedly sophisticated investors who fall for it. "Oh, he's learned his lesson -- he won't do it again!".
> ...if you disabuse yourself of the notion that Neumann was playing a game of entrepreneurship and good-faith empire building, and instead conclude that the game he was playing was shameless capital extraction, every step and action he took suddenly makes sense.
Sort of. I get the capital extraction part, but you also need to be a good steward of capital and make a profitable business out of it. He failed badly at the later part, and his reputation is an obstacle for the former.
Not saying you are wrong, but if I am a "capital allocator" at a16z, he would be no-go.
Some of those sophisticated investors are also engaged in shameless capital extraction. Their investment thesis is based on the "Greater Fool Theory": they're gambling that they can dump the inflated assets on another bag holder before it blows up.
Charisma and connections are pretty much all it takes. Really only connections are needed but since these people are coming back from being exposed they need charisma to assuage the concerns of their connections.
I recently invested a small amount of money in an early stage company where I had to declare I was either a 'high net worth individual' or a 'sophisticated investor'. The mutually exclusive clause seemed important to me.
Look how many people couldn't care about Epstein and the fact he was a convicted sex offender. Bill Gates didn't care and he was literally the richest person in the world at one point.
The rich VCs and billionaires and aspirational billionaires only care about doing what they want to do and don't care what the peons like us think or care about.
These fraudsters who get second chances have got blackmail. Trust me, all the people we see in the media are sharks. They only help each other if they feel a threat or have something to gain.
They are charismatic. They know how to work people.
If you've ever worked with narcissists and sociopaths, you'll soon enough discover that they will do anything to get what they want. And they are professionals at playing people.
They know what to say, how to present themselves, how to make their story, and what strings to pull on the people they try to convince.
Some investors are also willing to suspend their disbelief - thinking that if they are the first to ditch to bag, there's money to be made...as long as they're not the ones holding the bag.
Because those investors have exactly same moral and ethical framework. The fraud is just another legitimate way to make money to them. It is the same thing with Epstein or meetoo ... they were actually fine with all that and whoever complains is just pesky idiot.
I can't take mark zuckerberg seriously anymore. He's made so many missteps recently: meta-verse, meta-glasses, llama, hiring wang, meta reality labs, etc.
He should probably hire a proper "number 2" (not someone political like sandberg) -- someone who "gets" the internet, like how he did when he was a harvard geek making a hot-or-not clone in his dorm room. I'm not sure acqui-hiring the moltbook founders is the move.
That being said, I think the one silver lining is that it seems like big-tech now has a willingness to hire people who actually ship things of value, like peter steinberger. Another nail in the coffin for leetcode, I hope.
He’s still making money out of adverts on Web 2.0 platforms. A lot of money. Clearly Zuck is a brilliant businessman. That does not mean he is a brilliant technologist. He doesn’t have to be, so long as he can keep making money.
Eventually there may be a big misstep, perhaps, something big enough to bring down the company. But he’s never come close to date. He’s so good at making money from ads that he can afford to keep burning cash on fruitless projects, hiring people that don’t deliver, building infrastructure he might not need. That’s a testament to his performance as a money maker.
Meta is an advertising machine. Not something I’d want to be associated with, but you cannot deny that he has built an incredible ad machine, probably the greatest ad machine ever built - whereas Google had to deliver sophisticated and costly tech to maintain their machine (maps, google search, gmail) meta’s only technical breakthrough has been to hyperscale a php website.
> Near zero interest rates + COVID remote work + PPP loans = Booming economy
One more factor to add to the equation...when everyone went remote during COVID, all brick-and-mortar businesses had to quickly move to conducting their businesses online driving demand for SWEs.
Company wanting to hire essentially has two options: (1) hire from the pool of fresh candidates coming out of the Universities, (2) hire people who are already employed.
This means that to inflate the numbers of software engineers on the market you also have only two options: (1) have the Universities start to somehow exponentially produce the number of software engineers which the market could not amortize, (2) let go a substantial number of software engineers who now (in between 2020-2025) all of the sudden cannot find a new job anymore
(1) is a non-sense and for (2) to take place market needs to stagnate, which is what is happening. Reasons are manyfold.
> In my experience, tech employment is incredibly bimodal right now. Top candidates are commanding higher salaries than ever, but an "average" developer is going to have an extremely hard time finding a position.
This is the K-shaped economy playing out. Its a signal that the american middle class is hollowing out. Bad, very bad.
Really? Anyone here feel like the job market is thriving right now? Anyone surprised?
Bc I was like - yeah, totally, makes sense, not surprised at all.
If anything, I am waiting for that dreaded "business update" calendar invite from HR. I am already researching and taking notes on trade schools. Ready to punch that ticket any day now.
Why? I struggle to understand the incentives + motivations here.
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