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Balancing Honesty and Optimism in Silicon Valley

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I don’t know this company in particular, but this is very common. I can imagine a business plan that said, “Short term, we’re going to pay people to do this job to build a training dataset so we can train our machine learning algorithms.”

I actually just saw a company a few days ago where it had exactly the same structure. Only they did it the way I think it’s right. In their venture pitch, they were very honest, saying, “This is the current number of tasks completed each day on our platform, and here’s the fraction of tasks completed by the AI ​​versus the humans.” And you could see the faction growing. So there is a degree of disclosure that can make that plan ethical.

In start-ups you’ve invested in, or in your own companies, are there any examples where testing something that doesn’t exist or painting a vision you haven’t achieved was okay and necessary?

It’s hard to name a specific example, because in any start-up, that’s inherent in the work. Again, it’s not about cheating. It’s about talking about the future and the future is always uncertain.

I’ll give you an example. I was once raising money for a start-up, and we had a hockey stick-shaped graph in our pitch showing the number of customers and the revenue we had. And I remember showing it to an investor who said, “This is great. Congratulations. What are the units in this chart, is it thousands or tens of thousands?” And I said, “Oh, sorry, sir, my mistake. This is actuality, this is in units.”

And that investor laughed at us and never spoke to us again. But another investor looked at the exact same data, the exact same chart, with the exact same disclaimers and disclosures and said, “I believe something is going on here.”

You’re always asking people to extrapolate into the future from a very limited data set. And I would say that doing that requires you to be very strict and honest with people at that stage because it’s very easy to give them the wrong impression. It is very easy for them to feel cheated. And once you walk that path, the lies and deceit increase.

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