Comment by throwup238 | Hacker News Reader

Comment by throwup238 | Hacker News Reader

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> This is the story of the Theranos of marshmallows....

> ... Sebastiani wasn't an Elizabeth Holmes-style grifter. Marshmallows are real! But he did ignore the experts, and proceeded without having the necessary technology in place....

> ... But at trial, a Tanis engineer admitted that the samples Tanis had sent to Smashmallow to prove it could produce the product were actually made, in part, by hand. Apparently Tanis, too, had faked it to make it....

> ... The jury agreed, awarding Smashmallow $20 million in damages. After some legal back-and-forth, the parties settled for an undisclosed amount.

I expected to read this article for some guilty-pleasure schadenfreude but no, this is nonsense. This guy got a little too ambitious with manufacturing artisanal marshmallows and got screwed over when Tanis committed outright fraud. If anything, Tanis was the Theranos of marshmallows (which itself is a dumb comparison).

What this has to do with Silicon Valley is beyond me. It's just a bunch of outrage buzzwords strung together in an article about a failed confection company started by some wino from Sonoma, a city almost a hundred miles north of Silicon Valley. Garbage journalism from BI, as usual.

I think you're being harsh. The article was worthwhile, if a bit breathless with the therapist comparisons. I find learning about failure modes, especially in an industry I know near nothing about, to be always interesting

That the author found it fitting to compare this company to Theranos even when it was obviously not comparable spoils the rest of the article for me. Sure, the majority of the text may sound interesting but, given the writer's propensity to make dumb claims in the begining, I have to wonder about what undetected BS is baked into the article.

Even "outright fraud" is pushing it. Smashmallow asked Tanis if they could automate production, Tanis said yes and delivered a sample that was partly automated as a proof of concept. Was it really "fraud" that it didn't come off a fully formed factory line?

> Was it really "fraud" that it didn't come off a fully formed factory line?

When your business is selling fully formed factory lines? Yes!

But the agreement was to develop a brand-new, custom factory line just for Smashmallow: it was clear to both sides that the necessary tooling didn't actually exist yet.

> it was clear to both sides that the necessary tooling didn't actually exist yet.

Well yeah, that's why Smashmallow hired Tanis: to build the tooling.

Then Tanis sent them faked samples, making it "clear" to Smashmallow that the tooling did exist. Which was fraud, because it didn't actually exist and Tanis knew it.

That's why the jury awarded Smashmallow $20 million and Tanis settled rather than bother appealing it.

You've got the timeline wrong: the article makes it clear that the samples were sent before Smashmallow signed the deal.

> Hoj went to the Netherlands to see the Tanis facilities. The company even mailed samples of marshmallows it had produced to Smashmallow's specs. [...] Sebastiani agreed to buy a brand-new system from Tanis for $3 million.

Tanis was sued and lost for not upholding their end of the bargain: a marshmallow production line that actually worked.

> the samples were sent before Smashmallow signed the deal.

Yes. Samples that Tanis claimed were made by automatic machinery which is why Smashmallow signed the deal. That's what made it fraud.

That's exactly the timeline I'm talking about. I really don't understand what you're arguing...

I agree. The otherwise decent writing and interesting topic for the rest of the article was ruined by the breathless journalism hypewords at the beginning, and the insistent negative intonation throughout. I especially didn't like how the author lambasted Sebastian for wanting to expand his business past a regional boutique seller ("Rather than trying to blow the company up into another Krave-size winner, Sebastiani could have just … stopped.")

Yeah this would have been an interesting article if it wasn't overdone with hyperbole.

Came here to post the exact same comment. It's a fun read, especially since I remember enjoying the occasional bag of smashmallows years ago, but the Theranos comparison is ridiculous. By their definition, any failed startup is no different from Theranos. (If there's any need for clarification: one is a risky endeavor where the parties are properly informed of the risks, the other is fraud.) But yeah, it's BI, so why bother complaining...

So less Theranos and more Juicero it seems

Still 100% ZIRP delusions

The factory was a bit of Theranos (machines that didn't do what they claimed). Juicero was different — their machines worked fine but were just unnecessarily expensive contraptions, when you could literally squeeze the stuff out by hand.

But the Smashmallow company wasn't a Theranos at all. And I'm not sure that they're a sign of ZIRP delusions either. The reason they failed is that their particular type of manufacturing process couldn't scale. They could have kept making the stuff by hand and built up a successful company that perhaps could have found a way to mechanize things later.

Honestly the biggest dumb move was firing all the line workers before the automation was solved. Lesson: don't be a douchebag, figure out a way to make the people you're automating away whole (unless they actually sucked)

Yeah it would have been a no-brainer to train them on the machines if they were located in the same place. But I think it said the first factory was in LA and the second was in PA. That'd make for quite a commute! But regardless they obviously shut down the first factory too soon.

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