Everyone in the IT world knows about famous Silicon Valley. The heaven of software development, where the best minds join together to create products that change the world. And this isn’t too far away from the truth. Many companies, who today have a significant global impact, headquartered in this northern California region. Thanks to unrelentless investments by the American military sector, universities with great scientific research bodies, government regulations that favored companies, and electronic pioneers like William Shockley (don’t ignore the fact that he was into eugenics), John Bardeen and Walter Brattain, Silicon Valley is today seen as the place for software developers to be if they want to be someone in life.

However, everything has its cons. The IT sector boom caused rivers of money to be thrown into the region, and in the last few years we’ve seen the rise of tech bros, men, some of them chauvinists and mysoginists (looking at you Elon Musk), every one of them definitely ultra-capitalists, whose motto in life seems to be “Work is the only thing that brings me spiritual satisfaction. Money is the only thing that gives me sexual satisfaction. If I see a dollar bill, I have a mini orgasm.” We don’t want to tell anyone how to live their lives. Our professional career can and should bring you a sense of accomplishment, so that we can feel that we’re contributing to society in a meaningful way. The problem is that these tech bros do precisely that. They even say that music lessons should be banned so that 10 year old children can learn how to do the IRS (don’t be too upset Diogo. Or else I’ll play the flute!). Because the only thing that matters is money. Always, money. Maximize returns of investment. Maximize the amount of bullshit conversations to keep building pyramid schemes. Pyramid schemes? What?

Yes readers, Silicon Valley isn’t immune from frauds or scams. In case you need some clarification on what a pyramid scheme is, I’ll leave the best explanation possible here. It might seem unbelievable that such a sophisticated region like Silicon Valley can be subject to such a simple scheme. But it’s true. I’ll try to explain it with a short story:

Imagine yourself a software engineer. You have aspirations, like any other engineer, of solving problems. In particular, you want to solve problems that people have. You genuinely want to help people lead a simpler life. To achieve that, you set a goal of creating a robot that is capable of going grocery shopping for you. And so, you take the jump. With the money that you saved over the years, plus a little bit from friends and families (your first investors), you open your company, GroceryRobots.

In the company’s first year of life, you’re doing it all alone. Programming, marketing, management, accounting, etc.. At the end of the year you managed to develop your first prototype, a robot with a GPS system so it knows where to go, some wheels, a screen where you write what you need the robot to bring you back, a small compartment where you can put your credit card so the grocery store clerk can pay what you owe and a basket where the clerk can place the products. You talk with your local grocery store next to your house and you manage to find your first place to test your robot. You know that it isn’t perfect, but it’s a starting point.

At the end of the first year you notice that you’re running out of money. Time to go investor shopping. This is where Venture Capitalists (VCs) come in. VCs are basically companies that have a lot of money that give a lot of money to other companies, so that they can make a lot more money. Fun, isn’t it?

Continuing your adventure, you knock at VCs’ doors until someone gives you an opportunity to give a pitch. You show your video of your rudimentary robot going grocery shopping and you talk about how it’s going to disrupt the market. Nobody will ever have to go grocery shopping again! But, sadly, this VC doesn’t believe in you and sends you away. And so, you repeat this process, until finally, John from the VC “Money and Company” likes your idea. He accepts to provide you an initial investment so that you can scale your company and keep developing your vision for the future of grocery shopping. You get excited. “Finally, someone who understands my vision. Who wants to help others!”. This couldn’t be farther from the truth.

Your second year as a company is fantastic. You hire an engineering team, a marketer and an accountant. Your robot goes from a measley prototype, subject to getting robbed in the middle of the street, to something for secure, more effective. But money doesn’t last forever. You’re reaching the end of the year again and you realize that you need more funding to keep going. And so, you call John from “Money and Company”:

  • “John, John, I need more money to ensure that the robot can move away from people when it’s inside grocery stores!”
  • “Look John, things are running a bit tighter here, we can’t lend you more money. But look, I know Doug from “Company and Money”. I’ll schedule you a meeting with him. Tell him I invested and he’ll know what’s up.”

In the third year of your company, things aren’t going so well anymore. The robot’s progress stagnates. The money ends again. John tells you about another VC fim, “Money Company”, and a friend of his, Tim. Tim is obssessed with AI and cryptocurrencies. In the meeting with Tim, he’s not convinced. But you tell him “We’re thinking of integrating AI and cryptocurrencies and blockchain in the robot, but without more money it’s not possible”. Tim suddenly jolts in excitement. “Well I’ll be damned! Why didn’t you say that sooner! I’ve heard that blockchain AI with cryptocurrencies is going to be the future. Everyone’s talking about it. Look, here’s a few extra million dollars. Continue investing on that AI stuff. People are gonna go crazy”. And here begins the problem.

In the fourth year of your company, the robot goes in the background. What was supposed to be something simple to help ease people’s lives is ignored. With a need to have more money, more investments, the focus goes to publicity. Buzzwords. Hype. Creating false expectations. Suddenly, your GroceryRobot is now able to clean your house, walk your dogs, create paintings, washing dishes, everything thanks to the blockchain AI which will disrupt the market and change the planet. The ecstasy you felt when Tim gave you 5x more than what you needed takes over you, it starts to corrupt you, slowly. The engineers you hired in during your second year quit because they no longer agree with the company’s vision. But you don’t care. You hire other engineers to replace them. Cheaper ones, so that there’s more budget for publicity and marketing. It doesn’t matter if the robot’s quality gets worse as long as you generate more hype. You start to dream about mansions, yachts, private jets, the luxury life you will soon have.

At this point, Tim, John and Doug all have a lot of money in play. They want to get it back at some point. Since they were your first investors, that have a considerable slice of your company. They star to work with you more closely and they always give you references of other investors so that you can keep going with your funding rounds (you’ve probably read in the news about Series A, B, C, D and so on). The money keeps coming in, even though the actual value of your company is no longer there, besides speculative publicity and marketing. You start to practice your public image. You begin posting on social media more frequently, with many of your posts being marked as controversial, to generate more attention. More attention means more investment. And that’s all that matters now. People who’ve bought your product and review it negatively don’t matter. “The robot can’t even get across the street to the store anymore. How can this company say they’re disrupting the grocery shopping market?”. That doesn’t matter, as long as investors keep injecting more money. You’re too big to fail. You can’t fail. And on the other side, you have your share of supporters. People who’ll say “Wow, what a revolutionary company!”, “People who talk badly about GroceryRobots don’t understand anything about the industry. Reader is an inspiration to our generation. Ignore the haters!!!”. Your ego doesn’t get totally bruised.

A few more years go by, a few more funding rounds go by, and you achieve the dream of any startup. Unicorn status, which means that your company is evaluated at a billion dollars. Your investors tell you “It’s time to take your amazing company to the stock market”. Even though your company is now a superficial representation of your initial dream, and even though you sometimes still doubt yourself if this is the right path, the money beckons your call. And it silences any conscious thought that what you’re doing is imoral, or unethical. And your company, GroceryRobots is now in the stock market through an IPO (Initial Public Offering). Deep down, you know that the company has nothing, no value. Your stocks will sooner or later be worth 10x less than what they are worth today. So, you start selling all your stocks (or just some of them to not raise suspicions). Your investors do the same. Little by little, you start profiting off the scheme you built with your investors. Your employees, whom you never gave any of your stocks because you need to attract investors, will be out of a job in a few months. The company will crumble, but you still made a few hundred millions along the way so you have live the luxury life you suddenly wanted. What was once a dream to help people shop without concerns will stay in history as a fraud and a failed project. A couple of years late, Doug knocks on your door: “I have an interesting startup called CryptoRevolution, want to invest?”. The cycle continues.

FIN

Forgive me for the drama of this short story, but this is a good reflection of what has happened a lot in the real world. The most famous example is probably of Theranos and its found, Elizabeth Holmes. What can we do about this? Well, calling frauds or scams out when they happen is one thing. For the engineers reading this that might be in such a startup company, play the game. Win stock ownership of the company. I know it’s difficult to deal with so much bullshit for so long, but think of the end goal. If you can reap what you sowed at the end, use it to better the world at whatever scale that might be. Unfortunately, this is something that is extremely difficult to stop at an individual level. I really do believe that the best move is to participate in this system, and then seed positive change in your community after reaping the benefits. Fight for what’s yours.

If you want to know more, please watch this video.

P.S.: If there’s a company called GroceryRobots, the company that we portray in this post has no connection to the real world company. The short story written in this post is completely fiction. Please don’t sue us.

UNCAUGHT_EXCEPTION: Class “Money” has corrupted your brain at line 81264781 of brain.go.