The startup failure of Oomba | Hacker News Reader

The startup failure of Oomba

theverge.com

60 pointsprostoalex14 comments

The lack of accountability and governance by investors is fascinating and confusing to me. If I was investing meaningful portions of my savings, I would read every single document and maintain careful diligence on how the firm & executive team was performing. It also seems, from reading HN, that quality investment firms do that as well.

So, I wonder if it was more of a con job setup where the investors were played for marks...

In many cases, it’s not their money. I also think success can breed a mindset where people trust their first impressions. Then, because they are busy, they rely even more on that gut check.

Humans regularly overestimate what they know, and how well they can project people’s behavior forward.

Masayoshi Son seems to be a prime example of this, from what I’ve read.

Maybe the investors themselves knew it was a con job and were hoping to offload it onto other marks.

Notice the lack of the brand-name investment firms, or even a prominent angel. They don't name many names, but this seems indicative of the investor profile Oomba was after

> Around 20 members of the golf club invested. Several brought in family and other friends. The finance guy got his ex-wife involved. Some people didn’t have the savings necessary to be accredited investors, but Williams helped “fudge” the paperwork, as one person put it.

I did catch that... but.... I am sure that there's a whole number of investments that aren't brand-name that take place.

But, then it made me wonder about the con-jobbiness of it all. Targeting unsophisticated investors, seems like.

Sure, but if they're not accredited, they don't have much money to invest. "Accredited" is a relatively low bar for anyone thinking about putting money into a private company. He'd need a lot more than 20 of those guys to raise $35+ million.

Seems like this was removed from the front page? Why might that be?

this was fascinating to read. a tale of utter manipulation. i've read startup failures with grandiose dreams and insane founders, but this one really tops the charts for me.

Was Oomba even supposed to be a real company?

The name sounds like it was trying to confuse people into thinking it was Ooma. (The phone services company?

It's real. You can find the former CEO on LinkedIn.

Wow. Absolutely bonkers story, can't believe the investment company kept shoveling money into it after the coup.

> was allegedly dating three employees at a time

LOL. He never heard of the saying: "Don't dip your pen in the company ink."

There are easier places to get that ink, that doesn't create a "conflict of interests" risk.

If you find yourself feeling a sense of smugness when reading this kind of stuff, perhaps it's time to evaluate your own insecurities.

I so want to believe that someday the rubbernecking at failed startups will wear off. Whenever I see these articles, my first thought is always "who cares?" It's no secret that startup founders are an odd bunch in general who want to succeed at all costs, and then we're surprised when some small % of them end up making up BS and getting caught? Small-time scams are happening constantly all over the world, it simply isn't interesting.

But I guess a fancy webpage and graphics can make it seem interesting. The Verge seems to really love this stuff. I was a long-time reader before they started diving headlong into hit pieces on startups because they realized it was good clickbait. Blah blah public interest, but most of the companies they do hit pieces on hadn't even lasted long enough to make any market impact whatsoever. I haven't heard of Oomba, I bet you haven't either, and I bet you couldn't find 5 friends who had.

Might be time to read the story of Apple's very first deal, and imagine a blogging/clickbait environment that tore down Jobs as a result. Talk is cheap.

Reply on news.ycombinator.com