IRL faking 95% of users – Silicon Valley’s Fake it till you make it Disease

I have previously wrote about “Fake it till you make it“, you can read the post here : Fake it till you make it … The Who When Why !

Essentially, i even explained my role in this faking it culture, back in the early days… When i inflated youtube views to get get eyeballs for my videos and startups. I explained also how i was later contacted by Dan Greenberg, whom together with Matt Monahan (the most famous artist), used my skills for an entirely different approach. While the fake views i generated only helped push my videos up the ranking page (it was a thing back then), Dan and Matt saw a way to manipulate media, and get tons of free press coverage (My cooperation with Matt and Dan ended in 2007-2008). Faking it for media attention was a first step into a slippery slope, and with IRL faking users, we see the extend of damage faking can do to startup-investor trust relation.

For a social platform, it is important to have members, no one wants to join a platform that looks deserted. Hence, faking it initially, to motivate others to join, might be a good idea. However, when users become just a metric that can be faked, here we have a big problem. An integrity problem, a logic problem, and an entrepreneurship problem.

Fake it to get press, Fake it to get money.

IRL was faking it to get money, Abraham Shafi faked 95% of his IRL’s users, to fake growth. Investors love growth, hence growth is the number one metric for almost every startup. This led to a SoftBank-led $170 million Series C round, giving IRL a whooping $1.17 billion valuation.

Charlie Javice, did the same with her startup “Frank”, a student loan application, which she sold to JP Morgan for $175 million. 4.265 million ‘students’ did not actually exist.” In reality, Frank had fewer than 300,000 real customer accounts at that time.

The approach in silicon valley, as i explained in the beginning is to fake it to get press and fake it to get money. IR is just one of a long list of startups that adopts such an approach, a more popular one would be : theranos. Elizabeth Holmes faked an entire revolutionary solution.

Who needs marketing, or even growth when all you have to do is simply create fake users! Marketing is hard, growth is even harder, but that’s what lead to real success … not faking it.

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Abdallah Alaili

I'm a serial entrepreneur (mostly tech) and micro-investor (tiny), this is a blog to learn from other entrepreneurs and spread the wisdom to many more. You can find me on: Instagram - Twitter - Linkedin - more about me