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Posts Tagged ‘Silly Valley’

My Thoughts on the Systemic Scam Underlying Tesla Motors: 2

June 30, 2018 38 comments

In my previous post in this series, I made the point that there many similarities between the overall career trajectories of Elizabeth Holmes and Elon Musk than most want to acknowledge. Based on the comments section of that post, it appears that some of you think that comparing a now-disgraced con artist with your favorite secular prophet du jour is unfair. Some of you might also think that Theranos, unlike SpaceX or Tesla Motors, was a complete con-job based on an unsound idea and totally fabricated results. The reality, however, is far more complex and nuanced.

But before we go there, let us talk about another facet of the almost uniquely american scam known as a technology based startup based in, or around, Silly Valley. To be more specific, let us focus on the type of people who start or are the public face of such corporations. I recently came across an interesting article which made an argument about entrepreneurship in USA that I also made in the past. To summarize, the article says that all entrepreneurs who achieve any lasting level of success in USA are scammers and con-artists who just got really lucky.

In other words, all those Silly Valley entrepreneurs constantly promoting their “disruptive” and “innovative” product or service “which will change the world” are just scam artists who have found the right elevator pitch, facial mannerisms and organisational image to sell to gullible fanboys and cynical banksters who will lend them other people’s money. Being a successful entrepreneur in USA is now almost exclusively about having the right image and sales pitch in addition to pushing emotional buttons in rubes rather than delivering even a fraction of what was promised.

To be fair, none of this is really new and american rubes have been enthusiastically buying snake oil of all types since the nation was founded. What is, however, different now is that real world technological progress (as in improvement) has stalled for at least a decade (and more) in many fields. Don’t believe me? Look at trends in life-expectancy (even for the super-rich), increasingly crappy quality of your smartphone and laptop, the almost complete lack of any major medical advance (to treat common diseases) for well over a decade.. I could keep go on.

This combination of very obvious (if largely unspoken) technological stagnation combined with sequelae of 2008 financial crisis has drained public faith from most american institutions. It is also partially the reason why Trump was elected in 2016. Another consequence of this (richly deserved) loss of faith in traditional institutions is that any slick con-man or con-woman with some TED-Talker skills can successfully start a new corporate cult. Even recycled scam sellers, such as Alex Jones and Mike Cernovich, can make tons of money and gather an army of “followers”. And those two are not even the worst offenders of their sub-genre.

So how is the scam perpetrated by somebody like Elizabeth Holmes, Elon Musk or any other Silly Valley CEO different from the dietary supplements and self-help books hawked by Alex Jones and Mike Cernovich. Well.. for starters, Silly Valley scams are based around a core of truth or plausibility. For example, lithium-ion battery based electric cars with decent performance have been feasible since late 1990s, United Launch Alliance (ULA) was abusing its rocket launch monopoly in USA by charging outrageous rates and advancements in medical diagnostic technology have reduced the specimen size necessary conducting each test.

It is therefore reasonable to start corporations to explore development and commercialization of better electric cars, cheaper rocket launchers and diagnostic tests which are faster and can use a smaller specimen size (or volume). So what makes Tesla Motors, SpaceX and Theranos scams rather than somewhat respectable businesses? Well.. as I have said in previous posts, it comes down to the dreams they are selling to their fanboys and investors. For example, SpaceX would be a perfectly normal business if it promoted itself as a launch company with cost-competitive rocket launchers. But that is not what its public image and market valuation are based on.

Instead the market valuation of SpaceX is based on believing their hilarious claims about lunar tourism, colonization of mars and monopolizing the global space launch market. To put it another way, they are selling a series of highly implausible dreams. Similarly, as I mentioned in previous post of this series that, Tesla Motors public image in USA and stock valuation are based on the belief that it will displace Toyota, GM, Hyundai etc as the premier and other dominant automobile manufacturer in the world. It also presupposes that electric cars will somehow magically replace gasoline/diesel cars throughout the world, within the next 15 years. If you don’t believe me, have a look at market valuation of automobile manufacturers (including Tesla Motors) versus the number of vehicles they sell per year.

But what does any of this have to do with the saga of Elizabeth Holmes and Theranos. As it turn out.. a lot. The idea underlying Theranos, namely miniaturizing medical diagnostic tests such that they require very small amounts of blood or other bodily fluids, is fairly reasonable. In fact, some technologies that it was trying to incorporate into its own system has been previously shown to work well- perhaps not well enough or with very small volumes- but work well enough to merit further development. The problem with Elizabeth Holmes, her ‎Svengali (Ramesh Balwani), and the upper management of that company was that they over-promised to the point where they could not deliver anything close to what they promised.

It did not help that they apparently had an insufficient grasp of the technological aspects of whatever they were trying to promote. To make matters worse, they tried to scam their way out of this self-inflicted disaster by doing a variety of illegal things- from using diagnostic systems from other manufacturers to make it appear that their own system worked, abusing and threatening their employees and a whole lot more. But more importantly, through all of this Elizabeth Holmes continued peddling the scam under the guise of “female empowerment”, dressing like the next Steve Jobs, speaking in a fake voice and much more.

Curiously (or not), she had no trouble finding tons of rich, famous and allegedly smart people who were willing to invest millions and billions in her scam. Theranos started to implode only after it became too obvious that she pulling an enormous scam. Even then, many of her rich financial backers kept expressing confidence in her abilities. So what was the reason behind the now divergent fates of Elizabeth Holmes and Elon Musk. Well.. in my opinion, Elon Musk got lucky because he built his companies around ideas which could survive a quick back-of envelope calculation.

Electric cars with decent performance and relatively inexpensive RP-1/LOX rocket launchers were either already feasible or mature technology for at least a few years before he started Tesla Motors and SpaceX. Elizabeth Holmes, on the other hand, tried to pull of a scam in an area which lacked a similar base of proven technology. She chose poorly and was unlucky. But make no mistake- their main business model was, and still is, selling people and investors on their dreams of “technological disruption, “unlimited profits” and “market monopolization”. And that is why Elizabeth Holmes is an unlucky female version of Elon Musk.

What do you think? Comments?

My Thoughts on the Systemic Scam Underlying Tesla Motors: 1

June 23, 2018 41 comments

As regular readers know, I have previously written a couple of posts (link 1, link 2) on the fraud underling SpaceX’s claims of “disrupting” and “revolutionizing” the space launcher industry. To summarize the gist of both posts, my issues with their business model are largely centered on the hilariously optimistic claims made by them about future prospects for basically unlimited growth and market monopolization. While becoming yet another boring but reliable player in the international launch market is feasible for them, it is clear that they selling far bigger dreams without being honest about it.

Now, if you thought that this post would make a similar case against Telsa motors, you guessed right! As you will soon see, my issues with the business model of Tesla Motors and its borderline hypomaniac CEO, Elon Musk, have nothing to do with the feasibility of building an electric car with acceptable performance and mileage. Even a brief overview of the history of technological developments (especially rechargeable lithium batteries) as they relate to building viable electric automobiles shows that viable electric cars were possible anytime after the late 1990s.

But before we go any further, let us talk a bit more about what has historically been the single largest obstacle to developing viable and competitive electric cars. Yes.. I am talking about the energy density of rechargeable batteries, aka the source of energy for such vehicles. As some of you might know, electric cars and conventional gasoline powered cars came onto the market at around the same time, over a hundred years ago. Even more interestingly, early electrical cars were quite competitive with their contemporary gasoline-powered competitors.

What ultimately doomed electric cars by the late 1910s was that their range on single charge just could not keep up with the steadily improving performance of gasoline powered cars. Also, the extent of electrification necessary to make such short-range cars viable was simply not there till after WW2. In contrast to that, gasoline was easy to transport, store and cars using it had much better range, speed in addition to being much less expensive to drive per mile or kilometer. Lead acid batteries, you see, have a pretty shitty energy density (as in almost 70-80 times lower) when compared to gasoline and an equivalent amount of electric energy was (and still is) more expensive than gasoline or diesel.

The energy density of modern lithium-ion batteries is now only 10-20 times lower than gasoline, which while still being sorta shitty, is good enough to power cars with decent performance and range- largely because electric motors are lighter than equivalent internal-combustion engines and the former do not require conventional transmissions. Problems related to the speed of recharging such vehicles and storing electricity cheaply on a large-scale do however still remain, as do issues related to using them in less populated areas without a reliable electrical grid. In other words, electric cars are still a niche product.

To make matters worse for electric cars, their gasoline (and diesel) powered competitors have benefited from over a century of continuous improvements. The technology behind them is mature and very well understood, as is the ability to produce them at very high quality levels on ginormous scales. There is a reason why you can buy a new Toyota Corolla for a fairly affordable price and expect it to run almost half a million kilometers with basic maintenance and relatively inexpensive repairs. The real competition for Tesla cars are not other electric- or luxury gasoline- powered cars but your humble Toyota Corollas, Honda Accords and Hyundai Sonatas.

Which brings us to the first problem specific to Tesla Motors. Simply put, they motors has yet to produce, or even demonstrate the technological wherewithal for making, cars which can directly compete against their highly optimized mass-market gasoline powered competitors. If you don’t believe me, compare the price of a fully loaded Toyota Corolla and a Tesla 3. Did I mention that you can buy a Corolla right now, while the status of full-scale Tesla 3 production is still up in the air. Did I mention that they have been having these problems for over a year now, unexpected departure of many senior executives and issues ranging from the poor product quality to thoughtless design choices. I could go.. but you get the point.

Even worse, the Chevy Volt which has specs very similar to a base level Tesla 3 has proven to a poor seller. To put it another way, the real reason Tesla Motors still has a (now rapidly shrinking) waiting list for their cars is largely due to the cache of owning a Tesla car, rather than electric cars being competitive with gasoline powered ones. This is somewhat like there being a prestige market for rabbit droppings if rabbits suddenly went extinct. But what happens once the prestige market for Tesla cars get tapped out?

As readers might know only too well, most people buy cars to use them as appliances. It certainly helps if a car looks good or is considered cool, but as even a quick glance will demonstrate, most people are quite happy to drive mediocre-looking beige boxes as long as they are reliable and affordable to own. The unpleasant fact is that there are simply not enough customers for quirky prestige cars for Tesla Motors to cause any real “disruption” in the automobile manufacture business. And we have not even started talking about Tesla cars being especially susceptible to malicious hacking, safety issues resulting from lack of physical controls for many basic functions, finding raw materials to manufacture lithium-ion batteries on the scale they are talking about.

In the next part of this series, I will talk about the rather peculiar similarities between the overall career profile of Elizabeth Holmes and Elon Musk. Yes.. she is the CEO of that now disgraced company which was able to fool investors, bankers and other “experts” for almost 15 years. As I will show you in the next post, both Elon Musk and that woman are purveyors of what I call the “Silicon Valley Scam”, which is largely based on making highly exaggerated claims based on a kernel of reality and appealing to the “optimism” of clever idiots in Silly Valley with empty lives to part with their money. But there is much more to that scam as you will find about in the next part of this series.

What do you think? comments?

On Linkage Between Nasim Aghdam and YouTube’s Monopolist Policies

April 5, 2018 6 comments

I am sure that, by now, most of you heard about the shooting at YouTube’s headquarters by Nasim Aghdam. Regardless of what you think about her personality, the unintentional meme-friendliness of her videos or her general mental stability- its is clear that the incident in question was triggered by YouTube’s (and by extension, Google’s) completely unaccountable behavior towards its content creators and users. In that respect, Google is part of the general trend of Silly Valley corporations being monopolistic, autocratic and totally unaccountable. Given the amount of online hate about YouTube’s corporate behavior, policies and decision-making, I am surprised that such an incident did not occur sooner.

Amazon, Paypal, Facebook and pretty much every other large Silly Valley corporation have, in recent years, displayed very similar behavior when it comes to acting like autocratic monopolies. I hope to, soon, write a more detailed post about my views on the effect of such behavior as well as the kind of pushback it will eventually engender. Having said that, I am sure that this little incident is unlikely to change the attitude at Google anytime soon. Many of you must also be aware that YouTube is soon going to ban channels about guns. Surely such a move will be hailed by the public as an uncontroversial “common sense” decision without any pushback..

Link 1: Tragic YouTube shooting casts new light on creators’ “adpocalypse” complaints

As news unfolded about Tuesday’s YouTube shooting, a chilling motive emerged. Ahead of the incident, the alleged shooter had posted videos maligning the service—doing so as a former money-making user of the site. “I’m being discriminated [against] and filtered on YouTube, and I’m not the only one,” alleged shooter Nasim Aghdam said in a video that was shared after her identity as the shooting’s current, sole fatality was revealed. “My workout video gets age-restricted. Vegan activists and other people who try to point out healthy, humane, and smart living, people like me, are not good for big business. That’s why they are discriminating [against] and censoring us.”

YouTube’s automatic filters have wreaked demonetization havoc through a wide swath of video types, including those about conservative politics and LGBTQ issues. However, keeping track of which videos are impacted (and for how long) is itself quite difficult, owing to how many channels may be temporarily hit only to have those strikes reversed after an inefficient reviews process. The above-linked video about LGBTQ videos, for example, was itself demonetized when it was uploaded; it has since been whitelisted for ads.

One video made by alleged YouTube HQ shooter Aghdam, which was successfully archived before most of her online presence was wiped, focused primarily on YouTube flagging a video she’d recently made. Her complaint video included footage of the demonetized video, which showed a fully clothed Aghdam working out via sit-ups and leg lifts, as well as an allegation that YouTube rejected her appeal, telling her that the video was “inappropriate.”

Link 2: Livid over site’s policies, YouTube shooter trained for attack, shot randomly

Barberini provided a few more details about the incident, confirming that she was upset with the company’s “policies and practices.” Earlier videos—which have been removed from YouTube and Facebook but remain scattered in other places across the Internet—include clips of Aghdam railing against perceived grievances concerning age restrictions and demonetization. Last year, Google overhauled its age restriction rules and enforcement policy. This resulted in a wave of videos being demonetized, which angered YouTubers who could no longer attach money-making ads to their videos. Ruchika Budhraja, a Facebook spokeswoman, confirmed to Ars that the company had deleted Aghdam’s Facebook and Instagram accounts and wrote that the company would also “delete content that praises or supports the shooter or the horrific act as soon as we are aware.”

Link 3: YouTube shooter IDed as woman angry at site’s “age-restricted” policies

The San Bruno Police Department has identified the suspect in Tuesday’s shooting at the YouTube campus as Nasim Aghdam, a 39-year-old woman from San Diego. The confirmation came hours after numerous media sources had initially named Aghdam as the suspect. The San Francisco Chronicle reported that Aghdam’s car was towed from the YouTube parking lot. Aghdam seemingly had a website in which she promotes numerous YouTube channels, including ones in English, Turkish, and Farsi. All of her social media channels appear to have been deactivated or removed. The woman seemed to be upset at YouTube over what she called “age-restricted” policies.

Link 4: YouTube Attacker’s Complaints Echoed Fight Over Ad Dollars

While the police did not specifically say what those policies were, they likely had to do with a concept called “demonetization.” In response to pressure from advertisers and consumers, YouTube has been pulling ads from thousands of videos that it decides do not meet its standards for content. That has sparked an outcry from many of the people who post videos to the service. One of those creators was Nasim Najafi Aghdam, the woman the police said had shot YouTube employees in San Bruno, Calif. She frequently posted videos to several YouTube channels and had become increasingly angry over the money she was making from them.

When YouTube pulls ads, it tells creators which videos violated the standards, though it doesn’t elaborate very much on what they did wrong. It’s unclear whether YouTube pulled ads from Ms. Aghdam’s videos.The anger around demonetization has been growing for more than a year. One of YouTube’s most popular personalities, Felix Arvid Ulf Kjellberg, who goes by PewDiePie, posted videos with Nazi imagery, including a sign that called for “Death to Jews.” As a punishment, YouTube demonetized some of his videos in early 2017, though it didn’t outrightly bar him. Mr. Kjellberg, now calling himself “family-friendly,” still posts regularly and has a booming business on the platform.

A wide spectrum of YouTube creators, from the conspiracy-minded to the most popular stars, have been vocal about what they see as censorship on YouTube. After a popular video blogger who posts about news, Philip DeFranco, saw his videos demonetized, he called demonetization “censorship with a different name.” On Twitter, he wrote: “Producer just got off the phone with Youtube and it wasn’t a mistake. Feels a little bit like getting stabbed in the back after 10 years.” Luke Rudkowski, an independent journalist who describes conspiracy theories to his more than 500,000 subscribers on YouTube, has repeatedly complained about the site pulling ads from his videos.

In August, he posted a video criticizing news that YouTube would start removing more terrorist content. “We are seeing the purging, the cleaning of this major online institution to be more favorable towards corporations and governments,” Mr. Rudkowski said. “Now that’s why I think we’re finally reaching the end time of this beautiful and amazing platform.” A few days later, he said YouTube had pulled ads from 660 of his videos, “basically eviscerating my main source of revenue for this news organization.”

What do you think? Comments?