BBRG: Why So Many Tech Startups Misbehave

Why So Many Tech Startups Misbehave
When their business models are iffy, survival can depend on cutting corners.
Bloomberg, February 11, 2020.





Something is amiss in Silicon Valley. And Chicago. And New York.

Perhaps it is merely a coincidence; maybe it is a sign of what happens when too much capital sloshes through too many mediocre business models. Whatever the underlying cause is, one cannot help but notice a string of outright awful behavior in the venture-funded start up world.

I could not help but notice this after a string of news stories about some pretty reprehensible behavior coming out the admittedly second or third tier of tech firms.

Probably should no longer call publicly traded firms “Start ups.”

I am not referring to the frat-bro/#MeToo misbehavior of some CEOs. This is not about Travis Kalanick, the co-founder and former CEO of Uber. He was forced to resign in 2017, after the company’s deeply unethical and often illegal actions – and Kalanick’s own reprehensible behavior – became public.

Rather, I have noticed bad behavior specifically from business models that flout basic decency and normal economic behavior. Disruption is a consequence of true innovation, but that is not the context here. Instead, I refer to blatant violation of property rights, ignoring local laws and just plain general decency.  is something else entirely.

These corporate actions are not the result of drunken misbehavior of fratboy CEOs, but rather, deceptive business practices made by companies to pursue their sales goals and market share targets . let’s take a look at some of the more reprehensible decisions of these start ups.

In particular, Grubhub, Yelp and Doordash all deserve closer scrutiny for what looks like really bad business models.


See the full column here






I originally published this at Bloomberg, February 11, 2020.. All of my Bloomberg columns can be found here and here


Print Friendly, PDF & Email

Posted Under