I have no idea how they managed to survive for years after that. The CEO was found guilty of fraud, and it didn't seem like they had any actual product.
It's the natural extension of the startup ideology to non-software industries. How many times on this website have you seen 'founders' be celebrated for doing 'epic demo hacks' at least this fraudulent? How many tech startups achieve massive valuations with a broken product and a totally hypothetical pathway to profitability?
It's easy to see through this showmanship when the product is a car. So why not when the product is software?
Can't speak for anyone else, but I have an issue when it's software too [1].
I think the reason that it's more prevalent with software is that it's easier to hand-wave away stuff, because you can say "well we're creating the market for this field". I don't fall for that stuff anymore, but I did when I was first starting in this field.
You mean anyone that uses growth hacks? There have been many growth hack posts here. Pretty much every single start up has used some to attract investors.
You have a bunch of people who consider themselves "the smart money" who have been had, and if they pull out, that's an acknowledgment that perhaps they're not that smart.
It's easy to see through this showmanship when the product is a car. So why not when the product is software?