Hunting Unicorns in Silicon Valley: Another Grimm Fairy Tale

(By Daven Morrison, MD) Everyone wants to be young rich and a Silicon Valley success.
Well, at least it seems like it. In fact, every time I turn around I see stories in the papers, on LinkedIn or on Twitter about how the Silicon Valley (or just “The Valley”) is the cool place to be. The stories are straightforward: this person’s business is founded, becomes a success and the rest of us need to sit back and bask in their brilliance. Many of the recommended readings for business are grounded simply and almost solipsistic in the argument: because they are successful, they are the gurus business leaders must follow.

The conclusions of these books seem to run a common course, and have been at times overly simplistic and repetitive in their “research”. Successful businesses, according to the generic thinking, are run by people who are:
• Tough
• Single-minded
• Inspired
• Energized
• Energizing
• Passionate
• Hard Workers
Such is the list for the typical profile of successful executives. In fact, if you dig deep enough you find they can be cool as well. In one story, they swear and hang out with cool rappers like Ben Horowitz of “The Hard Thing About Hard Things”. Celebrity, in entertainment, or sport, also glamorizes success as the ultimate panacea, and again, because they are successful they know Truth.
As you might infer, the ideas move annoyingly from solipsism to sophistry.
So if there are so many winners where are the losers? The winners of the Valley must be beating someone else to be a winner, correct? Losers, or in other terms, “venture failures” can be found, too.

One clear place for failure is Chicago. Unfortunately this is my hometown. The overall wealth, commerce, logistics (O’Hare is not just a center for human transport, but material as well) and population suggests it ought to be a cradle for new business. Yet, year after year it consistently underperforms not only New York and The Valley, but also the ventures of Pittsburgh, San Antonio, and elsewhere. And, yet the bloom may be coming off the rose of the Valley.

(Who) expects fraud in Silicon Valley?” Penny Kim, Head of Marketing, WrkRiot

A Silicon Valley Dream Collapses in Allegations of Fraud

Katie Benner New York Times, August 31, 2016

Recently, the pressure, or perhaps level of competition, reached a point where the Valley spilt out into outright fraud. Similar to the overheated engine of the CDO (Collateralized Debt Obligation) swapping of 2006-07, the new ventures’ of the Valley expectations of wealth and success have perhaps gone too far when WrkRiot was exposed as a failed business. Prior to the collapse, the firm fraudulently attempted to forge wire transfers to cover payroll and other expenses. But perhaps of more concern, as noted in the article exposing possible fraud, are the fraudulent claims the founder Isaac Choi made related to who he was and where he worked. This is an alarming red-flag of character.

They have what everyone wants, the cool new hot venture from the valley, and yet it isn’t measuring up and they take the step to committing fraud to keep the dream alive. Why? We think there are a variety of motives, and specifically more than just greed. In this case, it may be about mastery, the game, or even to do good for others – though probably not the last one in this case. They are literally on the edge of having it all, but feel empty when it remains out of reach.

Do we really know whether the losers are not doing all the same things? In my opinion they are doing the same things; and often the only differentiator is good luck. Not the self-aggrandizing narratives the “winners” create. Being able to be a person of character and the courage to do the right thing when luck turns into a headwind and not a pleasant surprise is at the heart of these stories. For understanding why the “Egos” get out of control, see our Chapter 7 (in The A.B.C’.s of Behavioral Forensics, Wiley, 2013) where we discuss charismatic leaders and their followers. In fact, the maturity of losing and missing the goal is where some think the entrepreneurs really come into their own. For the others who must have it all despite not being dealt cards for success and despite all they already have, they will move to fraud. And given the high visibility and the high threshold for what is a success— a really successful new business or launch is called a “Unicorn” because of its rarity— there are likely to be more.




The Behavioral Forensics Group LLC is a team of professionals with vast experience in detecting fraud, understanding why it occurs, and in recommending steps to mitigate fraud incidence within the corporate workplace, particularly within higher-level (and therefore more costly to the enterprise) executives.  The fields of investigation, organizational psychiatry, accounting and behavioral forensics, and law enforcement are represented within the Behavioral Forensics Group LLC.  Acting in synergy to help organizations prevent, find, and/or reduce fraud, B4G is a premier, pioneering practice in this field.ABC cover desk low res

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