Ask YC: Ethical Question, possible fraud • Hacker News Board

Re: Ask YC: Ethical Question, possible fraud

#21

Post by Hexstream » Sat, Jun 28, 2008, 7:31 PM UTC

prakash wrote: post #10

Ever heard of WinFS? A good personal moral compass in such situations is whatever helps you sleep soundly at night. Life is rarely black or white, more shades of grey (can't remember where I read that). Curious to know, what would you have said in the same situation, would you have said we have 2 customers, one office, couple of customers, you would be third if we are lucky and hey guess what you are going to beta te…

Curious to know, what would you have said in the same situation, would you have said we have 2 customers, one office, couple of customers, you would be third if we are lucky and hey guess what you are going to beta test our product.

The opposite of "telling lies" is not "emphasizing your weaknesses" (besides they might not even be weaknesses).

Re: Ask YC: Ethical Question, possible fraud

#22

Post by Harkins » Sat, Jun 28, 2008, 7:34 PM UTC

I've been in roughly this situation, where the founder of a small company made grandiose claims and would say anything to get the sale, get another round of investment, get his way.

Reevaluate any promises he's made to you or any agreements you think you have with him. If you have a manager between you and him, same goes. A manager who is much closer than you to his dishonesty and is OK with it is going to act the same way to you, or claim to be on your side but, gosh, was overruled by the boss.

Now that you know you can never trust your bosses, it's time to find a new job.

Re: Ask YC: Ethical Question, possible fraud

#23

Post by hooande » Sat, Jun 28, 2008, 7:47 PM UTC

I'm not sure if it's right or wrong, but it certainly seems common. Exaggerating is part of business, and it happens in a lot of them. It's similar to lying on your resume...some people are hurt by it, some people are helped by it.

There are a lot of factors involved (in this case, can you deliver the software they want). If your company delivers what's been promised, then it probably won't be a big deal.

Legally, you probably aren't on the hook. It's unlikely that your company will agree to be audited so they probably aren't cooking their books. It's equally unlikely that they will sign contracts that contain false statements. I would rest easy if I were you - this sounds like part of the sales game. Your founders probably won't let it turn into a legal situation.

Re: Ask YC: Ethical Question, possible fraud

#24

Post by randallsquared » Sat, Jun 28, 2008, 8:02 PM UTC

DanielBMarkham wrote: post #5

Software is a funny business. I've known guys to run full-page ads for software that didn't even exist yet. The theory goes -- if the orders come in, we'll build it. Some people are naturally prone to exaggeration. Immaturity comes in to this as well -- once you've been around the block a few times you realize that fake posturing is easy for customers to spot. If it's not investment related, it's not criminal. I'd ha…

My fake posturing would be easy for customers to spot, but you hear over and over about multi-million-dollar companies which started as fake posturing, and no one noticed until later, and people rarely care even then.

Re: Ask YC: Ethical Question, possible fraud

#25

Post by eyudkowsky » Sat, Jun 28, 2008, 8:05 PM UTC

Run. This doesn't sound like a situation that's going to get better over time.

Re: Ask YC: Ethical Question, possible fraud

#26

Post by huhtenberg » Sat, Jun 28, 2008, 8:20 PM UTC

> What would you do if faced with this situation?

In short, your options are:

  * confront the founder
  * get vocal outside of the company (customers, investors, etc)
  * quit 
  * keep your concerns to yourself and continue working

I would strongly advise against first two options. They will automatically tag you as a troublemaker, and depending on the size of your professional circle this may cause you substantial problems further down the road. They are also not likely to change things either.

Keep in mind that the decision to twist the facts was conscious. This is in all likelihood his mode of operation, so talking about ethical concerns will probably not yield any response. It's not like he'd say - "Damn, you are right. What was i thinking ?".

Re: Ask YC: Ethical Question, possible fraud

#27

Post by patrickg-zill » Sat, Jun 28, 2008, 8:33 PM UTC

I think that you should be looking for another job; however since you are blameless in your current job, you should stay there until you are either ready or the checks start bouncing - I say this because if he truly is a scammer and not just someone who exaggerates to customers, that will happen sooner or later.

If the checks bounce, leave immediately (that day) and contact the labor board - they will get your money for you; and under no circumstances go back as an employee - if they want to pay you upfront as a consultant, and this of course is at your choice.

In any case you sound unhappy at your current job and should get another one at a company you can feel good about working for.

Re: Ask YC: Ethical Question, possible fraud

#28

Post by MaysonL » Sat, Jun 28, 2008, 11:07 PM UTC

patrickg-zill wrote: post #27

I think that you should be looking for another job; however since you are blameless in your current job, you should stay there until you are either ready or the checks start bouncing - I say this because if he truly is a scammer and not just someone who exaggerates to customers, that will happen sooner or later. If the checks bounce, leave immediately (that day) and contact the labor board - they will get your money…

My first programming job was at a small contract programming house. When my paychecks started bouncing (the company was about a million overdrawn at Citibank) I kept working when the president of the company paid me through his wife's checking account. There were two main reasons: 1) I didn't have another job 2) The project was about 90% done, and I didn't want to leave the customer stuck (AND I was subconsciously hoping to be hired on there).

Re: Ask YC: Ethical Question, possible fraud

#29

Post by tptacek » Sat, Jun 28, 2008, 11:15 PM UTC

Does your employment agreement include an NDA? If you "blow the whistle", you're going to get sued. If it's a real ethical problem for you, quit.

Re: Ask YC: Ethical Question, possible fraud

#30

Post by anon_commenter » Sat, Jun 28, 2008, 11:17 PM UTC

Lawyers will generally write into contracts with customers that the written agreement forms the entire agreement, and that the customer will not be relying on anything other than the text of the agreement in making their purchasing decision.

This isn't water-tight, but the reality is that verbally telling people you have more employees or offices than you actually have, within reason, are really not going to get anyone into trouble.

Nearly all startups pretend they're more established than they are.

Nearly all startups pretend they have more customers in the process of signing up than they do.

I hate to see everyone acting like these kind of exaggerations are the same as dishonesty or fraud.

People that make these kind of exaggerations can definitely be trustworthy.

There is a very big difference between exagerrating the position of a startup to break out of a catch-22 and being a liar and untrustworthy.

I'm sure a lot of people feel the same as I do - it's just that they'll not comment with their established usernames, and advisably so because that'd be a stupid thing to say on record.