Is it just me or is tech particularly sleazy right now?
I kind of got out of startups for that reason. I just couldn't take working with sociopaths anymore. I have some stories. Serious f'ing stories. And no, I'm not just "player hating." A lot of it didn't even involve me. I just couldn't take working in proximity to such sleaze.
Tech's had this reputation as a place where fortunes can be made. That's going to attract a lot of ambitious and creative people, but it's also going to attract a lot of scum.
What amazes me about my personal experiences is how unsuccessful a lot of the sociopathic behavior was. It really brought home to me that these people have a mental illness. In the same way that someone with severe OCD will do things like wash their hands until the skin comes off, these people are neurotically compelled to dominate others even if doing so actually harms them. They must win their petty battles and dominate those seen as weaker, even if it means losing in the real world.
I literally watched the moment at which a pathological sociopath tanked a million-dollar opportunity because he had to try to put one over on his partner. Had to.
Episode 1: (this is the one that most directly affected me)
I was working on a very interesting but somewhat far-off technology. I did some tech talks about it, and put them on Google Video. Was approached by a guy who said he was a wealthy early-stage technology investor. He showed me a lot of stuff that indicated that this was the case, had a lot of real people vouching for him, etc.
He made me an offer of a cash investment over a period of two years in exchange for a percentage ownership in a company I would create. I got a lawyer, did a contract, and was very excited. We'd work with early stage customers, iterate, and he'd support the hiring of two additional people to do R&D work. (The technology was a machine learning application.) He even had some existing customers lined up and interested in bio-medical, oil and gas, and other industries.
Came to find out that: a) this guy has almost no money at all and is a complete fraud, b) everyone he associated with literally has a different picture of reality. It was pretty amazing. Some people thought he was associated with a company that he only acted as a salesman for, for example.
I walk. In doing so I have to walk away from approximately three years of work because the ownership of said work is now tied to an entity that this guy could have a potential claim on.
Guy turns out to also be a f'ing lunatic. He threatens my life verbally. I contemplate buying a handgun.
Episode 2:
I meet a promising entrepreneur who is interested in bio-med stuff. He's working on a protein classification company. He asks me if I'd be interested in joining as a software engineer. I say sure.
He sends my resume out to his investors, only he's listing me as having degrees I don't have. I e-mail him about this. He asks me to personally write up a CV and coaches me on how to pad my resume.
I walk.
Episode 3:
I join a consulting firm that does early stage tech R&D and business consulting for startups. This one involves me only indirectly, but while there I get to witness several pieces of rather astounding sleazery.
One episode involved a company that was formed to build a video delivery device. We did a bunch of R&D for them. They were basically a sales pit: founder was a salesman, and he hired a bunch of salesmen to go sell ahead into the market and hired us to build a prototype. (Nothing wrong so far.) But the market didn't seem to be too interested, so he pulled the plug. Walked. Left our firm with almost $100k in uncollected bills. We do some investigation and find out that this guy's name is on over a dozen defunct LLCs.
Another episode involved a guy who was "known" as a "genius," a "business God" as one person called him. In this case we did actually get paid, but... the guy was a complete f'ing lunatic. He would berate and insult his employees, sexually harass women, and we come to find out that he'd been sued multiple times by previous partners. We were lucky to get paid... mostly because someone other than this guy was footing the bill. (That someone later pulled the plug.)
Consulting firm shutters its doors. I can't blame the guy. I mean... I didn't have to actually negotiate with these pricks. I just worked for the place. He did.
Episode 4:
Join a startup doing mobile devices. We get funded to develop something, and we're on the verge of making a sale, when the parent company decides to pull the plug. We were inches away. Millimeters away. Then the parent company decides to screw over our development partner.
That's it. I'm out. No more startups for me, unless it's my own.
Now here is my question:
Do they actually teach this s--t in business school? What the hell? I had a friend when I was much younger who got into some shady stuff including drug trafficking, and he told me a lot of stories. None of them approached what I experienced in the "legitimate" business world.
> we come to find out that he'd been sued multiple times by previous partners
Is there a way to find out about this in advance? Some kind of database to check who you deal with prior to starting business with them?
A database of the sort that you suggest is prohibited by libel and slander laws. You'd instantly be sued. While libel and slander laws serve useful purposes, they also serve to prevent people from warning each other about predators.
If you say "hey, this person is a predator, this is what they did to me and and I have proof," you can be sued. Sure, you might win. But if you're not rich, you can't defend yourself.
But honestly, some of it was visible in signs that I (and others) would have recognized had we been more experienced.
Never looked back unless it's my own startup.
It doesn't matter what they teach in business school. Most of the people I knew who took business majors (Commerce, Accounting, etc) are developing into "business assholes" slowly during their college years (.e.g: borrowing/copying your assignments, taking credits in group works, lying about their skills, boasting their knowledge, etc).
What do you expect? most of them are training for the real-world. They know what's going on out there. They went to seminars or talks given by those whom they deemed to be successful (ex-students working in KPMG, PwC, etc). They studied how these "successful" ex-students talk, present, think, etc. What are the odds they'll develop to become one of them really quick?
I remember one time, the big boss was showing an investor around and brought them back to the IT area. I was third man in the company, but first one with no shares, so I was completely ignored. The big boss points towards a good-sized computer cabinet and tells them that's the production system. Not so much ... the production system was under my desk as we hadn't ported the system over to the big fancy box yet. No big lies, but just a constant stream of embellishments and reasons why the lack of success was everyone else's fault.
Don't know that he learned it at business school, although he did have an MBA, but he was also a Chicago banker. No telling what counts as legitimate business activity inside the loop.
I had an investor once tell me with a straight face that he only invests in founders with a "prominent chin," because that "physiognamy" indicates someone who is an "operator." (Edit: he wasn't talking about me. It was at a conference. He had a beer or two in him. But I think he was serious. The context was serious.)
I am not making this shit up. Said investor who shall not be named operates a venture capital and business consulting firm out of Atlanta, Georgia and New York.
Given the quantities of money involved, I am kind of floored that more rational and scientific methods are not brought to bear on the problem of capital allocation. Don't get me wrong. The best of the best do think at least somewhat rationally about allocating their capital. But there is a ton of dumb money, and in my experience the dumb money tends to chase flashy fast-talking boatloads of bullshit piloted by sociopaths.
Edit: that's also why these guys always make a beeline to IPO. The stock market is the dumbest money around. I'm not saying all IPO-driven companies are sleaze-fests... but there's something about how they do it. They do everything they can to create the immediate impression of success in order to push for IPO as fast as possible, cash out, and leave. Groupon is probably the poster child right now.
I have to ponder that if one made a habit of screwing people over in the drug trafficking and/or shady business, the individual might end up with a shortened life expectancy.
Ping me on email!
So, to answer your question, we aren' taught to do anything illegal, but the manner in which we are taught encourages hustle at any cost and treating people as a commodity.
If a non-tech person can't offer me connections in my app's market or cash for funding, they won't ever be a partner.
I also now have problems with acquaintances giving me simple ideas that I thought of before (or are in the process of implementing) and claiming that they gave me the idea.
I'd never, ever, under no circumstances, do anything with Zynga without one. That pretty much says I'd never, ever, under no circumstances, deal with them.
"If you have psychopathic tendencies and are born to a poor family, you're likely to go to prison. If you have psychopathic tendencies and are born to a rich family, you're likely to go to business school." - George Monbiot
Episode 3-4: Yeah.
We offered free webmail, just like Yahoo, and at one point the CEO told a developer to add a credit card field to the sign-up form just to see what would happen. Several users entered valid credit card numbers. I do not believe that anything was done with these numbers, but I cannot imagine why the CEO wanted to test this.
Our main source of revenue seemed to be banner ads offering shady services from the telemarketing company. One of them was a travel club. The users would be drawn in with an offer of free airline tickets. They had to sign up for the travel club to get the tickets and they had to stay at specific hotels and such that were probably marked up to pay for the tickets. The whole idea was to get them to sign up for the travel club which caused a small monthly fee to be charged to their credit card. They knew how much to charge to get most people not to cancel for months (it was around $8-10). The only "benefit" of being in the club was more questionable offers.
At one point they considered starting a gasoline club that promised cheaper gasoline. The idea was that people would again pay a monthly fee for the club but then they would have to submit receipts to receive reimbursement for gasoline purchases. They were counting on people being too lazy to submit receipts.
Pig, meet lipstick.
Like I said in another part of the thread: the stock market is the dumbest money around.
If a seemingly honest man like pg can't arrange a nice little startup conference without having at least one speaker every year who turns out to be some sort of con man, then yes, I'd have to say tech is particularly sleazy right now. I'm not faulting the Startup School organizers for this, but it's an interesting observation.
Instead, they bring scummy fast talkers and put these people up on the stage as ideals. Not only is that teaching the next generation of entrepreneurs to be scummy fast talkers, but it's setting up these kids (and many of them are kids) to look up to and follow people like this. It's setting them up to be taken advantage of, or to become abusers themselves.
Like any guru, pg only pimps the upside. He has a lot of good things to say, but at the end of the day it's basically self-help, water cooler wisdom, and motivational speaking for beginning entrepreneurs. He's not going to tell you about the filthy underbelly.
He's not going to tell you that a good 20% of the people in the startup world have a diagnosable psychosis. Psychopathy, narcissistic personality disorder, and bipolar disorder are the most common. He's not going to tell you that startup stock is basically worthless, and that if you're about to vest you are probably about to be fired unless you are in the "inner circle." He's not going to tell you that the game is rigged hugely in favor of the already-connected.
Lets all remember, PG is in business to make money. He does that by selling the upside and lifestyle as much as possible.
Not that there aren't still ethical people out there, it's just that the unethical ones make it so hard to see them.
http://en.wikipedia.org/wiki/Hare_Psychopathy_Checklist
I'm not making some superficial political statement either. I noticed it in myself. There were people I worked with that I completely hated yet... when they were present... it was almost like a drug. There's this "high" you get off them. You feel more confident just because they're in the room. They've got this kind of charisma that goes beyond mere confidence or enthusiasm. They were, by their actions, the most psychopathic ones.
It's like we have a genetic, predisposed tendency to follow psychopaths. I found it unbelievably disturbing. I'm a bit skeptical of evolutionary psychology, but this is one area where that kind of thinking feels like it could be right. It's like we know, on some subconscious animal level, that while these individuals are dangerous to us they're also more likely to win in a war. They will kill for us. And our genes want to be on the winning team.
Among other things, it converted me to a born-again advocate for human genetic and neurological engineering. We simply have to purge ourselves of this evolutionary legacy code or it will kill us all.
From an evolutionary psychology viewpoint, things are probably the other way around. That is - psychopathic personalities evolved to reflect, albeit in a very shallow way, the traits we're programmed to identify and follow as leaders.
I find the whole topic morbidly fascinating. In a way, it's the closest we can get to observing an alien intellect. The idea that so many executives in and around my industry could be such people just creeps me the hell out.
The term you're looking for is "nonsentient."
That said, I like technology a lot better. There are always going to be scumbags when there's money, but the difference (IME) is that: (1) there are more normal (non-scumbag) people in tech, probably 85% vs. 70%, (2) the normal people in tech are more interesting and creative, whereas decent people in finance tend to be boring, 9-to-5 types, and (3) technology has a small but sizable number of people who are decent and have entered the upper ranks, whereas there's a glass ceiling that non-scumbags experience in finance (unless they start their own trading firms).
I didn't move from finance to technology with the illusion that I'd never have to deal with another asshat. I moved because in technology, it's much more likely that I can succeed (a) in a creative way, and (b) without becoming a scumbag myself.
Earlier this year, one such sociopath latched onto my sister and she convinced me to get involved. As soon as the project looked like it was going to get released, the sociopath tried to dilute my sister's and my shares from 1/3 each to 1/20th each. He wanted to bring in partners that he had previously screwed over to make something up to them by screwing us.
That is so classic. It really does get kind of Monty Python-ish.
Like I said in my post above, I have a lot of stories. If I ever wrote a book about it, I'd have to tame them down quite a bit to make them believable.
There are lots of underhyped startups right now that are busy disrupting other areas like enterprise software.
Key is to look at who's funding whom and executive leadership... an organization's DNA goes from top-down.