It’s a good time for crooks of all kinds.

Corporate shenanigans are a growth industry. Not since the days of the robber barons has white collar crime enjoyed such freedom.

OVER THE LAST TWO YEARS, nearly every institution of American life has taken on the unmistakable stench of moral rot.

Tax evasion siphons 10,000 times more money out of the U.S. economy every year than bank robberies. SOURCE: FBI; IRS.

And this clubbiness has human costs. Tax evasion, to pick just one crime concentrated among the wealthy, already siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004.

Tech took a personal hit thanks to Warren Buffet’s partner Charlie Munger and his views on EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. Tech companies love to talk about their “adjusted EBITDA,” because it makes them look profitable — even a financial loser like Uber.

“I don’t like when investment bankers talk about EBITDA, which I call bulls— earnings,” Munger said at a recent company shareholders meeting. “Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”

Tech workers aren’t faring well, either, even at the most hallowed companies.

Silicon Valley has often held itself up as a highly evolved ecosystem that defies the usual capital-labor dichotomy — a place where investors, founders, executives and workers are all far too dependent on one another to make anything so crass as class warfare. The recent developments at Google have thrown that egalitarian story into doubt, showing that even in the most rarefied corners of Silicon Valley, the bosses are willing to close ranks and shut down debate when the stakes are high enough. (…)  Workers weren’t just organizing to save the world from Google. They were also organizing to save themselves from Google, where those who didn’t fit the mold of the straight, white, male techie felt they could be too easily marginalized or dismissed.

The rot isn’t just trickling down, it’s a raging torrent. Student cheating is at an all time high across grades and globally is a billion dollar market.

Philemon is part of the global industry of contract cheating in which students around the world use websites to commission their homework assignments. (…)  Lancaster began studying contract cheating more than a decade ago when he noticed one of his own students posting assignments online. “I found one of my students who was putting up my assignment up for tender on an internet site. So, people were bidding different amounts of money to complete that computer programming assignment.”

Let’s hope the handbasket we’re careening down in is well made, so we can survive our trip to Hell and come out the other side in one piece.

Image credit: Newtown grafitti

Hat tip to KG for sending me the white collar crime article.

Poking through 13+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Last week’s look at the “new” Microsoft reminded me of a previous post that’s especially apropos in light of unicorn valuations crashing headlong into the reality of investor focus on profitability.

Read other Golden Oldies here.

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Neither market cap nor valuation are cause for celebration.

Both are as ephemeral as morning fog.

Ask Microsoft CEO Satya Nadella his reaction when Microsoft became the most valuable company in the world for a few months last fall.

“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable.”

What does interest him?

The Microsoft-generated ecosystem.

“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.

This dovetails with what Bill Gates also believes, i.e., a company’s success is defined when the total value of the ecosystem around it is more valuable than the company that created it.

That ecosystem seems non-existent to the majority of founders of gig economy businesses, dating apps, social media, etc.

Or perhaps it’s just those with venture funding who are focused on growth at all costs.

That said, this post is dedicated to the founders who focus on building sustainable businesses/ecosystems.

As opposed to the fools who chase investment in lieu of revenue, celebrate valuation based on their last round of funding, and don’t care about ecosystem beyond its PR value.

Image credit: HikingArtist

Last week we saw how the best places to work rankings change — Google was number one for six straight years, now it’s number eight, while Facebook dropped to seventh place.

People change too. Google CEO Sundar Pichai, who was named the world’s most reputable CEO in 2018, didn’t even make the top 10 this year.

Friends and family often aren’t aware of the most current news about a company and even when they are they may minimize it, especially if the company is hot or an icon.

This isn’t just about Google; Facebook, Amazon or dozens of others that are just as problematical.

Hot startups encourage you to jump in without due diligence. WeWork may seem like an extreme example, but it’s not as uncommon as you might think — remember Theranos, Uber and Zenefits.

It’s about how fast things change, both the big stuff and the little stuff, all the stuff that underlies culture and trust, which can and should affect your decisions.

Because it’s your career, your life and, corny as it may sound, your soul.

Image credit: chaukhat.com

Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

How time and tech fly. I wrote this in 2017 and there’s been a lot of change since then. In short, while hypocrisy has skyrocketed, with the advent of Uber, Lyft, We, and others profitability has fallen way behind. Greed, however, is alive and kicking butt — think We’s Adam Neumann.

Read other Golden Oldies here.

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Tuesday I cited a post by Scott Belsky on Medium talking about how employees are often conned (my word) by founders, especially unicorns, when it comes to the wealth that is supposed to flow from their ISO.

As pithy as the post was, some of the comments were even pithier. I especially like this one from  colorfulfool (21st comment)

If profitability were proportional to hypocrisy, there would be no failed startups in the Valley.

Not just true, but succinctly and elegantly stated.

Founders love to talk about the importance of transparency, trust and authenticity.

However, their stock plans and pitfalls thereof exhibit such a high degree of opaqueness and caveat emptor that they kick a hole the size of Texas in the fabric of the founders’ authenticity.

Another prevalent piece of hypocrisy is “change the world.”

Do you really believe that another dating app or being able to evaluate a new restaurant or another way to buy your groceries will change the world?

While they may impact one’s personal world, they certainly don’t have the impact of something like Mine Kafon.

What is proportional to the Valley’s hypocrisy is its sheer greed.

Actually, when I stop to think about it, the greed probably exceeds even the hypocrisy.

Image credit: HikingArtist

Amazon is right up there when considering big tech Kool-Aid.

All by itself it has done more to addict consumers to near instant gratification, with no vision past themselves, than any other company.

In doing so it has actually killed people and ruined lives.

And it has done it in a way that shielded it from both notoriety and financial responsibility.

Rather than a synopsis and comments from me, take a few minutes to read the original ProPublica’s, in conjunction with The New York Times, investigative article.

This isn’t the first article detailing deplorable working conditions that have resulted in numerous walkouts by Amazon and contracted workers,

But the only walkout that would actually have an impact is a customer walkout.

Obviously, it’s unlikely that anyone will actually quit using Amazon.

But if just 1% of users stopped for just one week, Amazon would definitely sit up and take notice.

And if a higher percentage stopped even better.

Whether it’s Amazon, Uber or any of dozens of other companies whose business model is built on unfair/dangerous worker practices they need to step up and start taking responsibility for the actions of people who deliver their “experiences,” instead of claiming they are “independent contractors” while still controlling their daily actions at work.

Image credit: Mike Mozart

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Neither market cap nor valuation are cause for celebration.

Both are as ephemeral as morning fog.

Ask Microsoft CEO Satya Nadella his reaction when Microsoft became the most valuable company in the world for a few months last fall.

“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable.”

What does interest him?

The Microsoft-generated ecosystem.

“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.

This dovetails with what Bill Gates also believes, i.e., a company’s success is defined when the total value of the ecosystem around it is more valuable than the company that created it.

That ecosystem seems non-existent to the majority of founders of gig economy businesses, dating apps, social media, etc.

Or perhaps it’s just those with venture funding who are focused on growth at all costs.

That said, this post is dedicated to the founders who focus on building sustainable businesses/ecosystems.

As opposed to the fools who chase investment in lieu of revenue, celebrate valuation based on their last round of funding, and don’t care about ecosystem beyond its PR value.

Image credit: HikingArtist

Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

I wrote this 9 years ago, long before Facebook, Uber, Zenefits, Google, and a myriad of other companies that started on the light side of ‘but me’ and, over time, migrated to the dark side.

Read other Golden Oldies here.

A few days ago I read Fourth Down, Death, an old mystery by Michael T. Hinkemeyer, and I’ve been thinking about how true was the statement, “Power is the ability to sustain illusion.”

We see the illusions fail all the time in the news these days—think Enron, WorldCom, options backdating.

What will it take for the corporate elite to realize that the illusion is fragile and that it takes very little to crack the power that sustains it?

Put another way, when will they stop operating on a “but me” basis? ” As in, “the rules apply to everybody, but me.”

However, “but me” is also

• the mindset that yields the greatest inventions, as when two brothers thought, “everybody thinks that man can’t fly, but us,” and fosters innovation at any level;
• what lets each of us continue functioning in our crazy world, knowing that the bad and scary stuff we hear about in the news can happen to anybody, but me.

Think of “but me” as having both a light side and a dark side—then choose the side on which you want to play.

Please join me tomorrow for an updated look at the quote that started me thinking way back in 2007.

Image credit: Yaniv Ben-Arie

When a new innovation is announced do you ever wonder how much of their own Kool-Aid the founders have drunk?

At how often reality doesn’t support the vision?

And to what lengths they’ll go to prove their vision is reality?

Think Theranos.

Think ride-hailing companies, such as Lyft and Uber.

The vision they sold was that they would lessen traffic congestion.

The reality is far different.

One promise of ride-hailing companies like Uber and Lyft was fewer cars clogging city streets. But studies suggest the opposite: that ride-hailing companies are pulling riders off buses, subways, bicycles and their own feet and putting them in cars instead. (…)  One study included surveys of 944 ride-hailing users over four weeks in late 2017 in the Boston area. Nearly six in 10 said they would have used public transportation, walked, biked or skipped the trip if the ride-hailing apps weren’t available.

The reality of that vision is simple. Skip the bus/subway/rail/bike/feet and summon a car to add to the crowd.

And it’s unlikely that antonymous cars will improve things.

If anything, they will likely exacerbate the problem, since they will be even cheaper.

Speaking of Uber and visions.

In spite of the $17.3 billion lavished by investors, Uber’s 2017 loss was $4.5 billion and in its nine years of life it burned thorough $10.7 billion, 2/3 of its total funding — another record.

Wow! That’s some Kool-aid.

Image credit: Rob

I attended a tech talk recently that was put on by the Tampa Bay Tech Garage here in Tampa, FL. Like most mid sized cities we have some thriving tech companies as well as startups.

The tech garage is an incubator that provides mentoring, work spaces and community to those that are growing their businesses. One way they facilitate this is by hosting talks with well established owners who can speak to their trials and successes, all in an effort to grow the tech community in our area.

Side note: if your reading this and you’re cold then consider the Tampa/St Petersburg area, it’s warm, full of sun and has a thriving community.

The discussion I attended centered on how failure is inevitable, but creates innovation and break-throughs if approached in the right way.

Our speaker was Chad Nuss, CEO of Inside Out, a sales innovation lab that teaches, tests and optimizes sales teams across the country. He had been the owner of several startups with successful exits and is just a great guy to be around. In his different roles he has also experienced epic failures that he had to learn from.

The topic was relevant in a lot of ways.

In tech we tend to say that revenue covers a multitude of sins. The evidence is there when you look at the Ubers or [insert any other money-losing company] of the moment.

Successful people also have epic failures, but if they are generating revenue it shouldn’t matter.

This is the wrong approach! It leads to us brushing off failure, burying our head in the sand and not learning. It is one reason you see companies have spectacular rises and sudden falls.

There is a better way.

Examining a failure in your life can be humbling, but also rewarding. You can learn from it, approach it differently next time, or achieve a breakthrough.

As I look at my own life I can count the many ways I have failed and repeated that same mistake again. I actually do not mind failing but I hate repeating that.

How often have you achieved a breakthrough or innovation after a failure?

What did you learn and how did you make it better?

As we go forward we shouldn’t fear failure, we should embrace it and grow.

Happy failing!

Flickr image credit: Jason Tester Guerrilla Futures

A few months ago I reposted Passion Unchecked, because it still seems to be the favorite excuse when things go wrong.

It was Ben Kaufman’s explanation when Quirky failed.

“If I ever go too far, it’s because of the passion I have for this place, and the love I have for this place, and the community,” Kaufman tells Business Insider. “I want this thing to be so perfect and so great. And, yeah, often I may take it too far, but it comes from a place of love, you know?”

Everybody lauded the passion with which Travis Kalanick drove Uber’s growth — until he drove it off a cliff.

Dara Khosrowshahi, Uber’s new CEO, told his troops that they need to take responsibility for what’s been happening.

“While the impulse may be to say that this is unfair, one of the lessons I’ve learned over time is that change comes from self-reflection. So it’s worth examining how we got here. The truth is there is a high cost to a bad reputation.”

High cost indeed, but it could go much higher if the most recent lawsuit gains traction.

Irving Firemen’s Relief & Retirement Fund filed the lawsuit in California federal court on Tuesday. The lawsuit does not say how much the retirement fund is seeking but alleges that Uber has lost at least $18 billion in private market value as a result of a series of scandals and controversies.

Passion isn’t limited to startups; it is present to some degree in almost all humans, especially those in formal or informal leadership roles.

It is the wise boss who understands that while passion is necessary to attract, motivate and sustain people uncontrolled passion isn’t what brings success.

Success results form a mix of passion, intelligence, grit, planning, and hard work.

What changes is the amount of each needed to deal with a given situation.

Image credit: One Day Closer