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Thomas Hansen
Thomas Hansen

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Silicon Valley is a Pump and Dump Scheme

A pump and dump scheme is when you artificially pump up the evaluation of something, for then to sell it to others who believe it's got real value - While actually the underlying value is zero. Basically ...

You nicely wrap garbage and sell it as gold

Silicon Valley has long since played out its part as an "innovation hub", and the above is the modus operandi for almost everything that's happening in Silicon Valley today.

How it works

  1. Some VC firm gives hundreds of millions of dollars to some startup
  2. The startup is evaluated as a unicorn because of its venture capital, and its evaluation soars
  3. The startup spends most of this money on bribing friends of the VC firm and "neutral evaluation firms", such as Gartner, Ernst & Young, JP Morgan, or any of the other big four, to such artificially inflate the startup's evaluation
  4. Journalists in the tech industry paid to create "neutral articles" about an upcoming tech startup can lean on these "neutral evaluations" to justify writing good things about the startup, while being bribed by the startup for publishing these rubbish articles
  5. Everybody believes the startup is "the next big thing", and the startup ends up in a position where it can basically sell garbage as if it was gold
  6. The VC firm and the entrepreneur becomes rich, basically by selling scams to people who are not on "the inside"
  7. The late comers, who have been told "this is the next big thing", don't have the skills required to actually evaluate the startup, so they end up paying the bill

It's a well known tactic, and basically a variation of a Ponzi scheme or a Pyramid scheme. Those coming "late to the party" ends up paying the bill, while all the corrupt journalists and investors are cashing in by scamming those coming in late.

Why you should care?

The tech industry is like a forest. In its ecosystem there are healthy plants and animals that contributes to the ecosystem as a whole. When parasitic plants enters the ecosystem, they will steal all the resources for themselves, and such kill healthy plants, resulting in that the ecosystem as a whole becomes sick and suffocates.

We've seen such things play out in every single ecosystem on earth. In Cyprus for instance, we've got Lion fish in the sea. Lion fish is not a native specie in the Mediterranean, and probably came to the island as an aquarium fish, for then to somehow escape and make it out into the ocean. In the oceans of Cyprus again, it's got no natural predators, and it's destroying and eating all the resources, such that the native habitat suffers and over time risks going under.

Silicon Valley is the Lion fish of the tech industry; A parasitic organisation, who's sole purpose is to gather all the resources for itself, regardless of the cost to the ecosystem as a whole. The paradox is that the similarities between the Lion fish and Silicon Valley goes deeper, since the Lion fish "looks so beautiful", so people who don't know the history of it, tend to react with "ohh my gosh, look guys, a cute Lion fish" - While it's actually a parasitic organisation, and should be killed on the spot when found. The government of Cyprus have even started handing out recipes for how to kill and cook the Lion fish, in an attempt at having people killing it to get rid of it.

Notice, I don't think we should kill the inhabitants of Silicon Valley, for obvious reasons - But we need to shed light on Silicon Valley's current practices, to avoid its disease spread out to the rest of the tech industry. The way to achieve this, is to inform others by exposing it, and such eliminate its abilities to continue this artificially created gold rush, who's inevitable endgame, is the destruction of everything we love as entrepreneurs and software developers.

The result in the long run becomes that everybody suffers, including the parasitic organisation itself, because its practices are unsustainable in the long run, and its only result is that inferior technology is replacing good technology. The parasites are destroying the ecosystem they're 100% dependent upon themselves, and they're driven by greed.

To give you an idea of what's at stake here, imagine your grandmother having her next pacemaker installed by one of these startups. Or imagine the next self driving car being delivered by one of these startups. Then imagine these corrupt individuals having bribed your government, your journalists, and everybody else involved in the scam - For then to having the pacemaker break down because of that its software and hardware was built from cheap garbage, or the car runs through a crowd of 100+ people uncontrolled, because its software was built by people who had no idea of how to build a GPS navigation system, and didn't care, because they were only in it for the money.

If you think the above is a fairy tale, realise we've already seen situations like the above at for instance Boeing, who reduced the quality of their internal quality control procedures by 90% the last couple of decades to "save money".

Yes, planes are literally falling out of the sky today because of such parasitic behaviour

What needs to be done

The fix is the same for the tech industry as it is in the forest. Shine light on the healthy plants, and prevent the unhealthy parasites from getting sunlight. This naturally over time suffocates the parasites, while nurturing those things worthy of being nurtured.

For instance, if you go to ProductHunt and search for "ChatGPT", you will find 10,000 products today. Most of the top products are literally garbage. The way it works, is that psychopath marketing managers will create some fancy landing page, to package their company's garbage, having close to zero real value, making it possible to sell as if it was a real product - While the underlying value proposition of the product is literally zero.

We've got an AI chatbot for instance. On every single neutral parameter it's 10,000 times better than 99.99% of everything else out there. However, at ProductHunt you will have to go to "page 11,670" before you'll find our AI chatbot.

The result becomes that everybody looking for a real AI chatbot spends their money and resources on some nicely wrapped garbage, and if they even make it to our product, they've completely lost faith in the whole idea a long time ago at that point.

The reasons for this, is because ProductHunt has become a "Pump and Dump tool" for artificially inflating the value of some garbage, by bribing friends and partners, to like and comment on some garbage product, while they really don't care about it, and there sometimes isn't even an underlying product at all. You can easily spot these fake reviews and likes by realising they more or less consistently have comments and reviews such as follows:

  • Great product
  • Love it
  • Amazing
  • Perfect

Basically reviews saying nothing about the product, created by corrupt marketing experts, or sometimes bots, to artificially inflate the product's evaluation, making it bubble to the top, and such suffocate real products in the process.

You can see the same on Amazon. Products are getting fake reviews and likes, to play the algorithms, resulting in that inferior products bubbles to the top. However, let me ask these "marketing experts" the following question ...

What are you going to do when your grandma buys her next pacemaker based upon such reviews ...?

Wrapping up

This isn't a "me problem" it's an "us problem". Filling up the world with inferior garbage products is not a "business model", it's an unsustainable method to ensure we collectively as a specie destroy the world.

  • What are you going to do when you're in an airplane, and the plane goes down because "the engineers built some part of it based upon Amazon or ProductHunt reviews"?
  • What are you going to do when your grandma dies, because her cardiologist used a scalpel that had "only positive reviews by Gartner", yet still somehow "magically" was made from inferior products, resulting in that it would gather bacteria, snuffing your grandma during her next heart surgery?
  • What are you going to do when your self driving cars goes over the cliff in 200 miles per hour, because its gas pedal was made by a company who didn't give a sjit, and only wanted to cash in on some pump and dump scheme to make some few easy bucks?

Please, have some decency, and do the right thing. And the right thing is to expose these products for what they are, which is indeed inferior garbage products, created by ignorant psychopaths in Silicon Valley, to make some easy bucks - While they couldn't give less of a sjit about the consequences for the world at large ...

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