CEO of Saygus smartphone company that never released a phone charged with fraud
theverge.com
theverge.com
I say all this with empathy for them. Driven people often have that extreme tunnel vision, and it has the potential to cost them everything. Sayers deserves to be prosecuted and likely punished, but it may be a while before he even understands that he did anything wrong.
Alternate possibility, Sayers is fundamentally crooked and I’m hopelessly naive.
Sounds pretty crooked to me. Why are we so willing to give wealthy people (or those who appear to be wealthy) the benefit of the doubt? We don’t usually weave these sympathetic narratives for criminals from other segments of society.
Of course I have no idea if the article is accurate - I’m just going by what it claims that he did.
They raised money. They rented a huge office space. They got booths at trade shows and worked hard on PR.
But the one thing they didn’t apparently do is try to build and ship a phone. Maybe he thought he could simply collect enough money to pay a contract manufacturer to do it all for him, but after a decade without progress and countless lies perpetrated to investors and then media, I don’t think he secretly thought he was doing the right thing.
But I believe at least the CTO worked hard to build and ship a phone. We were coworkers for a while as he worked on the Saygus project (he's very capable and personable), and he brought in a prototype phone at least once, showing us its features and obviously he cared and had worked on it. I remember him expressing which features were really important to him, him demoing some cool-for-the-time video conferencing software he had written that ran on it, and later on at least once, expressing his frustration that the phone had hardware issues (manufacturing flaws I think), and the Chinese manufacturer they were working with had refused to make another prototype with them fixed, until they had more money or a guaranteed contract for a large production run (or something like that). I think he was working at it for a long time.
Edit: It seems very possible that the CEO met someone with good ideas and very strong abilities, may have had some positive intentions, but spent too much too soon or got overexcited about the $ or just not enough nose-to-grindstone at the business execution level, and/or that successfully launching a phone to manufacturing is extremely hard & expensive. But again I'm not in a position to know more.
Stories like this are why I’m not excited about the prospects of opening up startup investment to the general public. Everyone thinks they’re going to get rich investing in the next Uber, but really they’re just going to be inundated with scammers like this guy:
> Sayers began soliciting the funds in 2006, and used emails, social media including Twitter, and investor newsletters to persuade people to invest in the phone
Tell us: did HN ever get a dark mode?
Instead of patent medicine pitched by traveling salesmen, we have essential oils pitched by MLM recruits. People know not to buy magical cure-all patent medicine from an old-times salesman with a handlebar mustache, but they don’t know to avoid miracle essential oils pitched by their cousin who just joined an MLM. Same story, different minor details, larger scale than ever.
I think people tend to forget how rampant these frauds can be only because we have relatively decent enforcement and limits around them now. Remove the guard rails and they will proliferate like never before.
The lesser talked about issue with public investing is they the genuine entrepreneurs don’t actually need to raise money from general public. There is already more investment money out there than genuine deals available to take it up. Most of the investment opportunities that make their way to the general public have already been reviewed by and declined by many skilled, professional investors. Anything left for the public is inherently biased toward being a very bad investment.
Very, very true. Human nature at it's bare essential has hardly changed. We're essentially cavemen and women with (slightly better) manners posturing in ill-fitting suits.
I think the big problem though is that for every scam investor, there is at least one visionary who might actually pull it off, and its not always easy to tell the difference between the two...although sometimes its really easy
The mistake is to think that the public investor has equal access to both the visionary entrepreneur and the scam investors.
They don’t. Professional investors have already evaluated and sorted these investors very effectively. It’s literally their job. The good entrepreneurs can collect all the money they need from investment firms. They’d rather take VC from 5 firms than public money from 500 unsophisticated investors who require handholding, so that’s what they do.
That leaves a very adverse selection of remaining entrepreneurs to pitch the public. There might be a legitimate misunderstood entrepreneur in there, but they’re mixed in with 100 completely unqualified or scammy entrepreneurs who were already vetted and passed on by professional investors.
That’s why by the time an investment gets shipped to the public, it’s usually confirmed to be a bad deal.
Since the startup world isn’t quite as meritocratic as it pretends to be, and is arguably less so than it was 20 years ago, I’d say that yes, there are investment bargains like this to be had.
All things considered, I’d much rather let people risk their money on startups than at the roulette table.