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Comment by mikekij | Hacker News Reader

Back in early 2016, I was in awe of many of the "Unicorn" startups that were defying all odds to raise money and huge valuations, and earning the praise of the press world-wide. Zenefits, Theranos, Nant Health, Uber... clearly the founders of these companies were made of some entirely different material than I was. Their success was so awe inspiring.

Now, it seems as though ~100% of these sorts of companies are up to some shenanigans. It makes me seriously question the validity of any tech company that is lauded by the press.

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http://paulgraham.com/founders.html

"What We Look for in Founders

4. Naughtiness

Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter."

I would argue that:

1) Zenefits having software tools to specifically skirt state laws about employee certification requirements

2) Theranos lying about clinical results

3) Nant misrepresenting order data to their shareholders

4) Uber having a set of formalized HR processes that facilitate the sexual harassment of female employees

all go beyond "naughty". Plus, I don't think that PG would be excited about the financial impacts that each of those behaviors have had on the respective companies' share prices if he were a shareholder in those companies.

I think the issue is "they delight in breaking rules". Why delight in it? There's a big difference between "I'm willing to break minor rules when I have to" and "I enjoy being naughty for its own sake". I suspect its a lot easier to break big rules when you're having fun breaking small ones.

> I suspect its a lot easier to break big rules when you're having fun breaking small ones.

That sounds plausible, but I suspect the correlation is very weak. Most people follow rules in a bizarrely idiosyncratic and context-sensitive fashion. For example, taking the escalator when going to the gym to use the stair-master.

Most people don't bat an eye about crossing in the middle of a small street. It's technically against the law, but hey.

But is it fun?

What rules are fun to break?

You've never tried a petty rebellion as a kid? It's fun. Even as an adult, you can get a thrill by calling in sick and going out.

There's a reason we love to watch crime dramas.

The advice is equivalent to "we want your break the rules, but don't get caught". It's encouraging misbehavior while trying to distance from the consequences.

I think with Uber the "naughty" could be more that they'd set up shop in countries without e-taxi regulation set up, skirt around taxi laws, and become too big and valued by the community before the government would have time to react.

I really don't understand why Zenefit's script was such a big deal. Have you ever had to sit through a bunch of slides and be forced to spend x hours staring at something you can speed read through in minutes? The regulations didn't care about testing real knowledge, just time spent on the module. Anyone with a slight bit of naughtiness will hack around this.

You're overstating the case on #4.

Agreed. Would you accept:

uber having a set of informal HR processes that fail to protect employees from persistent harassment

> 4) Uber having a set of formalized HR processes that facilitate the sexual harassment of female employees

Is this publicly available information? First time I hear of it.

But some of those companies were breaking the rules that matter.

Being 23andMe selling accurate genetic information to their customers outside the purview of the FDA is being naughty. They could do it because the science was there.

In the case of Theranos, selling diagnostics that don't work is not being naughty. It isn't evading useless regulation. It is selling pseudoscience.

Unfortunately, many investors and the business press cannot tell the difference.

Agreed. 23AndMe side-stepped FDA red tape.

The thing that annoys me with Theranos was they could have found scientifically justified ways of significantly improving diagnostic efficiency but chose not to. Other startups are working on low-cost methods of providing lab tests in developing areas, without the pseudoscience.

s/pseudoscience/fraud/

Yeah, I am quite ambivalent about this 'rule'. I think you start on a slippery slope once you can rationalize this type of behavior. Also, would you be comfortable explaining your actions to a journalist/public? If not, chances are there is shadiness occurring ...

Whether you'd be comfortable explaining your actions to a journalist/public is a very poor heuristic for whether your actions are right or wrong.

The public/press distort and misreport all the time. There are plenty of reasons to be cautious there.

Please note that I wrote:

"If not, CHANCES ARE there is shadiness occurring".

I used this to nuance and to denote the fact that this is a rule of thumb, not one of the 10 commandments.

Some rules are best left unstated. By formalizing them everybody is incentivized to stretch them. By formalizing them we fool ourselves into believing that they're more objective than they really are.

A [poor] analogy would be false precision. By stating something in overly specific terms we can communicate something completely opposite of what we mean.

In the case of something like "naughtiness" there's really no decent way to communicate what the author has in mind, not even in an approximate fashion. It's not reducible to a term divorced from the messy details of real-world context. And that presumes what the author has in mind is at all consistent. Better leave it unstated and leave one's actions to speak in their stead.

The problem I have with this, is naughtiness only works if everyone else is following the rules.

and what rules matter, is retrospective. I was a big proponent of Uber initially, I felt they were doing the right thing, but clearly they have gone down a path that I cannot condone.

You need to have a respect for the rule of law and the enforcement of contracts, otherwise, people won't do business with each other or trust one another.

I am naughty.

You are up to shenanigans.

They are criminally corrupt.

Ah yes, of course, another of those irregular verbs from 'Yes, Minister' - I have an independent mind, You are eccentric, He is round the twist...

In other words he wants founders who will do shady things to make him a profit but not to the point where he loses plausible deniability.

Then it gets down to: what rules matter?

"Fire is hard, cars are hard, and if you think you can fly, start from the ground."

Rules don't matter. Ethics do.

The former exist in the service of the latter. One problem we have with contemporary US culture is condoning a sort of twisted narcissistic, psychopathic assertion that because competently breaking the rules is sometimes ethical, breaking the rules is a sign of competence.

"Don't be evil."

But when "the ends justify the means"?

The ends may justify the means in abstract, but they don't among humans.

http://lesswrong.com/lw/uv/ends_dont_justify_means_among_hum...

The means you use determine the ends you get.

"Do the right thing."

> Morally, they care about getting the big questions right

Theranos failed here big time.

So did Uber on the HR front at least.

This is effectively Raskolnikov's justification for committing murder in Dostoyevsky's Crime and Punishment. Sorry for the spoiler, but you've had 150 years to read it.

Sounds like a good way to back a founder that's going to end up buried in an avalanche of lawsuits.

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