Comment by khazhou
6 years ago
There's a lot of discussion here of how this was predictable given the absence of a visible prototype for so long, and the over-the-top secrecy of the project. However, for me this was a predetermined failure when I first read an interview with the founder. Classic Super-Visionary snake-oil salesman. He could say nothing about the product, except for how it would change the world more than the world had ever been changed in the history of world changes. Sure, ok. I don't remember Larry and Sergey being like that (because they had a real product). Or Bezos, etc.
Frankly, I'm shocked at how the investors couldn't see past this CEO.
I think it's pretty common for investors to see someone as a Snakeoil-salesman but still invest. It only matters if they think they'll get a return.
Well, I don't have all the data points, but it seems to me that snakeoiler should stand out as an anti-pattern. Maybe VCs see it differently. Maybe they'd inform me that the snakeoil CEOs are sometimes frauds, but the non-snakeoil CEOs always fail (not enough energy, not charismatic enough to attract talent, etc).
("Huckster"... that's the word I was looking for)
Seems to me one person's snake oil has often been another person's cannabis oil, in oil terms I guess where neither type of oil may actually be useful to a particular consumer.
But if you've got a truly persuasive and aggressive salesman who can really get things done and actually sell virtual snake oil like few others, especially for much more than it's worth if genuine to buyers who don't actually need the product or as much as he is selling them; well that salesman needs to be incentivized with excess genuine product to sell, and appropriate adult supervision and probably legal counsel and you can reach goals more impressive than most top salesmen who are themselves very productive.
IOW with that kind of salesman you don't need functional product anyway since you'll do quite well selling the sizzle alone, but if you do actually throw in a real steak it can indeed be relatively non-slimy.
So a product company might be able to slide more product out through a slick pipeline, but when you're delivering something of value you're still a product company.
The problem is a salesman like this who gets too close to executive rank can overcome the supervision and turn it into a snake oil company, and it can ruin everything.
Or with the right connections, found a new high-tech snake oil company where the most important consideration was not a product of value anyway. Unless dreams came true of course.
The hype, overfunding, bust is very Segway.