I have never been involved with enterprise sales per say. Is this common practice in the industry? I mean, all the products mentioned in the PACER are fairly popular products. Also,what are the other alternative ways a new enterprise tech startup break into the industry.
Former Netflix executive convicted of receiving bribes from contractors
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Re: Former Netflix executive convicted of receiving bribes from contractors
#372This is so common it’s hard not to do. Not doing it definitely stunted my startup but it’s a lifestyle company and I don’t mind building slower. Edit: I should add that while I was working at a FAANG (before doing a startup) the team I was on would constantly be blocked from building X only for a VP to buy a company that said they did X but didn’t. Because we still needed X we would buy a new company each year. We co…
To clarify on Edit #2, are you saying that you're selling to the customer through a reseller, and you suspect that the reseller is actually an executive at the company who is skimming margin by purchasing from you at a list price and marking it up to the end customer? The levels of deceit and lying are so thick.
I was Applied Research, feature X was for internal use. The companies were supposed to be tallent and tech acquisition, they claimed to have feature X but were faking it. The 'talent' was fresh out of university people crammed in last minute to bulk up numbers. The VCs funding the startups had a pre-existing relationship with the VP who joined the company in a similar earlier acquisition. One of the VCs approached me about doing a purpose built start-up of my own, the purchasing company and sale amount was already determined, quick easy money. It was clear making working technology was orthogonal to the real objective of extracting huge amounts of money large tech companies. I only cared about the tech so it wasn't of interest to me. Even 10 years later feature X doesn't exist even though it's entirely tractable. It's possible that it may never get built which would be a shame.
It doesn't bother me anymore. It's just people being people. I'm enjoying the series The Expanse lately because of the way it integrates realpolitik into the storyline.
Re: Former Netflix executive convicted of receiving bribes from contractors
#373Between this and that couple that tried to sell nuclear submarine secrets I feel like people are engaging in criminal activity for so little (relative) gain.
Per the article it seems like his total take was $500k. As VP of IT Operations at Netflix he must've been making at least that much per year. Seems crazy to me to take on that level of risk for not that much upside (if you're a well-paid tech worker).
Re: Former Netflix executive convicted of receiving bribes from contractors
#374Earlier quoted context omitted.
To clarify on Edit #2, are you saying that you're selling to the customer through a reseller, and you suspect that the reseller is actually an executive at the company who is skimming margin by purchasing from you at a list price and marking it up to the end customer? The levels of deceit and lying are so thick.
I was Applied Research, feature X was for internal use. The companies were supposed to be tallent and tech acquisition, they claimed to have feature X but were faking it. The 'talent' was fresh out of university people crammed in last minute to bulk up numbers. The VCs funding the startups had a pre-existing relationship with the VP who joined the company in a similar earlier acquisition. One of the VCs approached me…
I'm actually asking about this part: "With my current start-up it's not uncommon that we are instructed to sell to a customer via a nominated 3rd party. We don't know for sure, but we strongly suspect, that the 3rd party markup is how the executives are skimming off extra money. At least it keeps us out of it. "
This implies something other than the crazy rigged acquisition scenario you describe above (which is also absolutely bonkers).
Re: Former Netflix executive convicted of receiving bribes from contractors
#375Earlier quoted context omitted.
I'm privy to more details than I am giving out. I've been in SV for over 15 years and I have seen a lot in that time. I'm aware of what is normal. There is normal purchasing intermediaries and then there are purpose built bribe vehicles. We're not talking 10% it's more like 100% to 1000%.
Yes, I'm not denying it's common, just that it doesn't have to be that. That so many M&A deals are so blatantly shady it completely shocks me that CEOs/Boards/Shareholders aren't more vigilant about it. In your view, are the the most respected firms more or less immune from that, (maybe because they do really well and don't need to), or are they the worst offenders? Or is there a differentiation for simple favours fo…
I don't know of any firm immune to it and I've worked with a couple of the most prestigious and hear about many others. I've long given up wishing people were better. And unfortunately I expect it to get much worse. As the financial crushing of the middle class increases I would expect much more corruption as being middle class / poor becomes more humiliating. I expect this to give way to mobsterism that would make current levels of capitalist fraud look like paytime.
Re: Former Netflix executive convicted of receiving bribes from contractors
#376Earlier quoted context omitted.
I was Applied Research, feature X was for internal use. The companies were supposed to be tallent and tech acquisition, they claimed to have feature X but were faking it. The 'talent' was fresh out of university people crammed in last minute to bulk up numbers. The VCs funding the startups had a pre-existing relationship with the VP who joined the company in a similar earlier acquisition. One of the VCs approached me…
I'm actually asking about this part: "With my current start-up it's not uncommon that we are instructed to sell to a customer via a nominated 3rd party. We don't know for sure, but we strongly suspect, that the 3rd party markup is how the executives are skimming off extra money. At least it keeps us out of it. " This implies something other than the crazy rigged acquisition scenario you describe above (which is also…
Sorry, I misread as Edit #1. We know in certain countries in certain areas nothing gets done without some kind of bribe / kickbacks so we assume some of finders fee we pay for leads goes back to the customers exec. Sometimes we get asked to increase prices to increase their margins. I.e. make a Pro version for 10x the cost for them to buy. Sometimes the customers complain to us how expensive it is and then we tell them how much it should be costing them which is a fifth of the price. Usually the exec is untouchable though so it doesn't change anything. Funnily enough, only time we've been directly asked for graft was from a Swiss customer and we offered a junket which they didn't like, I guess they wanted more.
Re: Former Netflix executive convicted of receiving bribes from contractors
#377One item seems to have caused a lot of confusion in the comments so I will take a stab at clarifying: It is perfectly legal for Netflix to ask for options or any other consideration in exchange for the contract. Companies do this sort of thing frequently. They know that merely signing a large contract with a large firm will increase the value of the contractor. It is not legal for someone working for Netflix to ask f…
I am confused. Why is the company allowed to do this and not any employee. I mean, isn't this insider trading on the company's part? They could in theory take options, then after the value of the firm increases, they could sell them and pay the money to their execs - isn't this strategy just an elaborate insider trading scheme?
Re: Former Netflix executive convicted of receiving bribes from contractors
#378Earlier quoted context omitted.
There is also the role of the VCs who facilitate much of this. They use VPs in big companies to offload crappy purpose built startups for huge profits then get their friends to offer the VP sweetheart deals and or future employment. AFAIK the arms-length / chinese walls keep it legal in appearance. Basically any big tech company with lots of money and terrible management is prone to this.
This is also common in government contracting. When you say "offload" crappy startups, do you mean getting the company acquired by that company or purchase the startups products?
Acquisitions. Say a big company lacks in category, an exec from that company can let a VC know that they would like to buy a company in that category and are willing to pay a certain amount. The VC then goes about bringing the company into existence. Do a song and dance about how it's a real company. Buy a bunch of positive press. Cram it full of new grads. Then before it can collapse under its own weight offload it.
Re: Former Netflix executive convicted of receiving bribes from contractors
#379Earlier quoted context omitted.
The act of not disclosing a conflict of interest is a problem in and of itself. A conflict of interest is not necessarily a problem as long as the conflict is disclosed so that dealings around that conflict can be scrutinized. But if you never disclose it, then problem or not, no one will know.
Also, this is the classic "it depends" in consulting. Example where this went bad: - "Acme Co." has an offshore/outsourced dev group in India called "Offshore Co.". Offshore does all of their software development, maintenance, infrastructure, etc. - CTO who is employed by Acme wholly owns Offshore Co. - PE Group ("PEG") buys Acme Co. and takes a controlling interest - PEG decides Acme should do something strategic. -…
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Re: Former Netflix executive convicted of receiving bribes from contractors
#380So this guy traded his reputation and possibly his freedom for some small kickbacks? When his other option was stay at Netflix as a VP? When RSUs were around $9 (current stock price: $635)? I wonder how much money he threw away assuming he had stayed 5-6 years instead. $5m? $10m?
You're exactly right. He would have made a ton more money by just staying and working at Netflix and collecting stock awards at his level. However, these kinds of shady scummy people can never do this type of long-term thinking. They're always out there to suck a company dry in the short term and then it's onto the next one. You've probably seen this behavior before in the sales department.