Ask HN: Have any of you left a startup that was selling snake oil?

This is kind of the crux, right? If the investors believe that there is a future roadmap to essentially automate what the team is doing ... That's one thing. If they are investing today because the CEO is saying "Look! It's automated!", then that's pretty much on them.

That said, these investors have literally millions of dollars to complete due diligence, and if they miss on something like that, it's on them. Investors are putting so much money into these companies on "demos" and without really looking under the hood. So if they complete their due dilligence, their essentially saying "we are investing in your current product and our current understanding of it". I don't think there's going to be a fraud lawsuit here.

Theranos was changing the output data that the investors saw, not just saying "we do blood tests better!". That was straight up fraud because the data reviewed in due diligence was false.

A while ago, I worked for a consulting company that specialized in e-commerce with fulfillment. Soon I realized that their clients are mostly MultiLayer Marketing companies. MLM is legal but very unethical industry. Our clients referred to their customers as idiots or bored housewives. Some of my coworkers tried to quite their concise by convincing themselves and me that these people are lazy who are trying to get rich quick. So they deserve to lose their money. They would say it is a cheaper than business school.

I tried to tell myself that I am just a worker, just following orders. It was a good job with a lot of benefits but it was very soul crushing. Leaving that job was the best ever thing. My mental health improved the minute I handed my two weeks notice.

The quote is from a Bloomberg article - https://www.bloomberg.com/features/2016-hampton-creek-just-m...

It's just astonishing to read that an company executive told board members that something seemed wrong with financials and the board members didn't immediately look into it. If the people who are supposed to be doing the due diligence aren't doing it, who do they think is going to do it?

Under the hood, the company was down to 4 engineers (we sold the company as a team of 30 engineers). We were basically doing Ponzi-style SOWs promising time to clients over time another had paid for, etc. Lots of our 'solutions' were just white-labeled third-party software bundled up into a shitheap. We didn't have any actual IP because all of the stuff we made was licensed by the hosted providers we used. We actually stopped really acquiring any new tech or updating or methodology maybe a year into me working there. My boss shifted focus onto social media (blog posts about cloud shit, tweeting about cloud shit, facebook about you guessed it--cloud shit.) He even went as far as to spend ~20,000 on high end production and recording/streaming equipement and software to start doing live webinars about more, yes, cloud shit. The content of the webinars was whatever the engineers could manage to scrape together at 2am after finding some time in their massive stack of actual work to do. Our boss never learned how to set up the shit, the webinars barely ever streamed successfully, and the social media best I know never made a mark.

I've been gone a while but last I heard the CEO is still hellbent on being the most widely visible adopter of the cloud in the world.