Opinion: Occupy Silicon Valley Is Coming Faster Than Most People Think
Silicon Valley-based startup Zenefits allegedly used tech savvy to mislead regulators and commit fraud. Zenefits offered free software to small businesses and made money selling health insurance policies to those businesses. Valued at $4.5 billion in a 2015 funding round, the company started losing money after BuzzFeed reported that most of Zenefit’s insurance deals were made by salespeople who lacked proper credentials.
CEO and founder Parker Conrad resigned after it was discovered that he’d developed a secret software tool — the Macro — that enabled Zenefits’ sales brokers to skirt state licensing requirements, CNN reported in July 2016. The tech firm allowed salespeople to act as insurance brokers in at least seven states despite lacking insurance licenses.
Zenefits announced in February that it would lay off 45 percent of its employees to cut costs — about 430 people.
“Even in a town built on hype, Zenefits turned heads for its rapid ascent to elite ‘unicorn’ status,” CNBC reported.
Big data analyst Palantir Technologies recently settled a hiring discrimination lawsuit for almost $1.7 million. The U.S. Department of Labor charged the Palo Alto, Calif., company with systemic hiring discrimination against Asians applying for engineering jobs.
A billionaire venture capitalist and early Facebook investor, Peter Thiel is the co-founder and chairman of Palantir. He has strong ties to President Donald Trump.
Facebook co-founder Mark Zuckerberg defended Thiel in March after calls mounted on social media to kick Thiel off Facebook’s board of directors, Business Insider reported:
“We have a board member who is an adviser to the Trump administration, Peter Thiel,” Zuckerberg said during an hourlong Q&A in March with students at North Carolina A&T State University. “And I personally believe that if you want to have a company that is committed to diversity, you need to be committed to all kinds of diversity, including ideological diversity.
Thiel helped finance former pro wrestler Hulk Hogan, who in 2016 won a $140-million lawsuit against Gawker Media for publishing transcripts from a sex tape. The judgement bankrupted Gawker.
After receiving the $140 million judgment, Hogan filed another lawsuit against Gawker for leaking sealed court documents to the National Enquirer quoting him having a racist rant.
Hogan used racial slurs to describe his daughter’s boyfriend, who is black, during a filmed 2007 sexual encounter with Heather Clem. The new suit claimed a transcript of Hogan’s comments were “court protected, confidential, sealed.’”
Theranos, a Silicon Valley health tech firm, claimed to have an innovative blood testing device that would give fast results using just one drop of blood. The company ran into trouble after the Wall Street Journal published articles beginning in October 2016 suggesting the blood-testing devices were flawed and inaccurate.
The company, once valued at $9 billion, was founded by Elizabeth Holmes in 2003.
Hedge fund Partner Management Fund LP, a major Theranos investor, filed a lawsuit in October, alleging that Theranos “engaged in securities fraud and other violations by fraudulently inducing the fund to invest and maintain its investment in the company,” Vanity Fair reported.
Holmes was barred by a U.S. regulator from owning or operating a lab for at least two years, according to CNBC.
Theranos enjoyed a meteoric rise and an epic fall, Forbes reported in February. Much has been written about the $700 million investment in the company and its highest valuation of $9 billion. Today, most of the value of the company has evaporated and CEO Elizabeth Holmes’ wealth has been estimated at $0.
The bubbleheads in Silicon Valley were caught off guard by the Trump election and are now scrambling to get closer to the real America.
Zuckerberg announced in a January Facebook post that he would embark on a listening tour of the U.S. to “get out and talk to more people about how they’re living, working and thinking about the future.”
This, of course, doesn’t necessarily mean that Zuckerberg is imminently running for office, Molly Olmstead reported in Slate. Still, it’s worth noting the particularly politician-like moment Zuckerberg had on Friday, when he had dinner with a Trump-supporting family.
The coming Occupy Silicon Valley movement may help Silicon Valley see that they are not only part of the problem. They are funding the problem and creating a culture to reinforce and grow the existing problems in America.