[tptacek]

I am with you on how misplaced the enmity towards --- well, at least Groupon. But there have been well-known public companies that did badly that were essentially scams, such as during the channel stuffing scandals of the late 1990's. So while I sympathize with your irritation at the "Groupon is a Ponzi scheme" meme, the last sentence of your comment is simply wrong; it's wrong directly (a counterexample would be Sanjay Kumar) and it's wrong in what it implies.

[pg]

If anything that supposed counterexample supports my point that the accusations these people casually make in HN comment threads are so much more drastic than they realize that they're their own reductio ad absurdum. Running a public company that's a scam tends to entail criminal behavior. Especially nowadays.

[tptacek]

CA didn't start out as a deliberate scam, and continues to run today despite being essentially a scam for many years. The companies we're talking about today --- Groupon, Zynga --- don't have long enough track records as publicly traded entities for us to presume they're run in good faith; variants of the things that got Kumar sentenced probably aren't even crimes when they happen during mezzanine funding, when the people being "scammed" are sophisticated investors.

You implied, Zynga isn't a pump-and-dump scheme because Mark Pincus still runs it, and nobody would inflict the management of a poorly-performing public company on themselves. Well, that's just not true.

There are better arguments against the assertion that Groupon is a pump-and-dump scheme than "it must suck to be Andrew Mason these days" (it does not suck to be Andrew Mason, by the way). For instance, Groupon was open about its liabilities and the enormous risks it faced, and its whole industry sector was very carefully scrutinized.

I'm done arguing this point. My nerdly brain just couldn't handle the idea that being Andrew Mason in Q4'12 is so painful that simply holding his job imputes him credibility.

[mkramlich]

> My nerdly brain just couldn't handle the idea that being Andrew Mason in Q4'12 is so painful that simply holding his job imputes him credibility.

Agreed. If Pincus and Mason are having a hard time now, I'm sure they can have a good cry in their mansion or on their yacht, weekends in Aspen, luge lessons in Zurich, private Zoroastrian monk mentoring, perhaps a custom birthday song written by the Rolling Stones -- you know, the typical way of handling such hard times as these.

[mlchild]

I believe PG's point is that creating a company as successful as Groupon or Zynga from scratch requires an incredible level of psychological and man-hour commitment, in addition to constant creative and iterative idea generation. The idea that they are pump-and-dump schemes is absurd in light of this essential truth.

[wslh]

so, adding a painfulness metric is not a right when the incentives are huge.

[pron]

Sure, but these accusations shouldn't be taken as personal attacks against specific companies, but, rather, as a sense people get of "silicon valley" and the startup economy. It could just be jealosy or schadenfreude (which shouldn't be entirely discounted :)), but I take it as a political statement. Even if the facts in some particular case can be refuted, these statements express a true and valid sentiment about the state of affairs.

[api]

I wasn't suggesting that it was conscious con-artistry (though I don't completely rule it out either).

I worked in business consulting for a bit. Part of what I learned is that at least some emperors have no clothes. There were really two main types I encountered:

(1) Extremely competent, hard-working executives who try their best to build real value.

(2) Fast talking dominance machines. Sociopaths, really. They make big promises, send a lot of primate dominance gestures, and generally build vapid unsustainable businesses that eventually fail. Yet the failure never sticks to them, and it often never sticks to their initial investors. Usually it's handed off to someone down the line (later investors, the public, employees, etc.).

When I see a resume that consists of a series of a series of unsustainable businesses where the early investors and executives made out well by handing a bag of flaming poo to later investors, I tend to suspect that we're dealing with category (2) players.

I also suspect that when I hear of extremely magnetic reality-distortion-field personality types. There is a certain kind of charisma that I take as a contrarian indicator.

[javajosh]

It's interesting to me that api's vague attack on the leadership of certain companies is pushing your buttons - going so far as to call his comment 'drastic' and 'absurd'.

The key point here, I think, is to be very careful to distinguish between a failure to build sustainability, and willful maneuvering for maximum personal gain at the expense of sustainability. The former is a noble failure, the later is deeply unethical (if not illegal) and ne'er the twain shall meet!