Tell that to Theranos, Fyre Festival, WeWork, the counterfeiters on Amazon, the myriad of shady ICOs, and on and on. Unfortunately, scammers are rife in industry. Let's not fool ourselves.
Your examples seem to support the point you were replying to. Theranos is a perfect example of a scam unravelling because eventually the scammer needs to produce results, and not just self-referential research papers that never quite go anywhere.
I wonder how many more years it will take for uBeam to give up the ghost. Dave Jones has so thoroughly dismantled that one, it should have been over years ago.
There's a sucker born every minute and a skilled con man can exploit that unfortunate truism to keep a scam for quite a while. Moller's skycar is an example of a flagrant scam that lasted for decades.
I provided several top of mind examples. It doesn't take long to think of entire industries that are shady, from payday lenders to cigarette companies.
> In industry you _eventually_ need to show result and earn money
> It doesn't take long to think of entire industries that are shady, from payday lenders
I trust you aren't arguing that payday lenders don't earn money!
There's a huge difference between "I don't like what this industry is doing" and "this industry is fraudulent, can never produce the goods/services claimed, and will never turn a profit for the investors".
I don't see much of a difference between these companies and the person in the article. Both are taking advantage of a vulnerable population for some personal benefit.
If you have completely terrible credit and have a minor emergency, a payday loan may be your only option. If you take one, you’re supposed to pay it off with your next paycheck or 2, so the interest isn’t that outrageous. It certainly beats losing your job because you can’t drive to work.
The original point was that people scamming investors get discovered because the investors are invested enough to follow up on their claims. Less so in academia.
The immorality of Pay Day is very much known, and it is not relevant because Pay Day is scamming their customers, not their investors.
Both those examples produce bucketloads of cash for their shareholders. They're not defrauding the people who bankrolled them, they're taking advantage of the vulnerable, which is an entirely different problem.
No, both are dependent on cheating people. One cheats people who can fight back, and is thus considered criminal. The other cheats people who cannot fight back, and is profitable.
I think your examples help prove the parent comment's point. Each of those companies faced a reckoning when they weren't able to deliver on their promises.
It is very possible that there will be action against Mr. Neumann. Any court of competent jurisdiction would likely rule that he was in breach of his fiduciary responsibility. There are even richer people who are not happy with him, who can hire even bigger armies of lawyers to make his life hard. I'm guessing they'll wait until they've got the company locked down and him out, then start going after him.
Those aren't necessarily inherent flaws, they're bad execution. Ride-sharing _can_ be very profitable, but it's also supposed to be very low-overhead. SV startups don't do low-overhead.
Electric scooters are a little iffier, as they take significantly more capex and there isn't much data on market acceptance (Or, at least, none of which I know.)
Meal-in-a-box is not a bad idea either; new people are showing up every day whining about how, "Adult-ing is hard." The fact that people eventually "graduate" is not an issue so long as more people are being born. It's just not necessarily something Joe Six-Pack is going to buy.
If you've noticed a common theme here, it's that the idea of hyper-scaling can be flawed. The above all have significantly lower threshold for market saturation than they believe, if you ask me.
Ride-sharing can be successful, but may not take over the world. Electric scooters can be successful, but may not take over the world. Meal-in-a-box can be successful, but may not take over the world.
SV gets stuck in the pareto trap of scaling past economies of scale and to the point where that next 20% of your customer base takes 80% of your capital. You can push scaling, but the market only moves so fast.
Ride sharing is only viable if the market shrug off all the externalities (insurance, traffic management, personal data security, etc) and keep pumping money into it in the hopes of fully autonomous vehicles becoming a reality within the next decade. Indeed if this type of hyperscaling were profitable we should have seen major regional taxi operators like airlines in developed countries a long time go, but alas there never was because it was not a good idea then and now.
Ditto for electric scooters - I rarely see anybody use one but it is somehow already costing my country millions in medical costs.
The housing mortgage crisis, dot com boom and bust, payday loan industry, for-profit universities, fad diet companies, supplements with no scientific basis, cigarette manufacturers... There are whole industries and periods of time where large numbers of shady companies are rising and falling.
This was an issue of bad timing, not a bad business model. People weren't really mentally at the point of buying such thing on-line, and pets.com burnt through their cash so quickly that it couldn't wait for people to start adopting it. As pointed out by others, Amazon made it work; however, they are very smart about diversifying, re-investing, and not being profligate with cash-on-hand.
You forgot Solar Freakin Roadways and the water from air bottle, but yes them and the billionaire banksters who nearly bankrupted most of the world who are the biggest scammers, like Dick Cheney, who didn't serve a day in prison for their crimes. (Too big to fail. -> Too big to jail.)
