Chapter 55. Fake Genius (1)

There is no place as active in startups and investments as Silicon Valley.

As a result, all sorts of fraud cases occur, and there are more than a few companies that survive on investors' money without generating any profits.

Therapix, a medical startup, announced that it had developed a new technology capable of testing for over 250 diseases with just a single drop of blood.

The media praised it as a revolution in the medical field, and it was widely introduced in Korean media as a successful startup case.

Part of this was due to the founder being a blonde beauty in her late 20s.

Most successful founders in Silicon Valley are men, and women can be counted on one hand. The sudden appearance of a female entrepreneur with both outstanding looks and skills was like a comet.

She personally promoted the kit through media appearances and lectures, announcing that she would release it as a product within a year.

Investors lined up to invest, and Therapix raised several billion dollars, with its company value soaring to $10 billion.

But what was the result?

It was all a lie.

The kit that Therapix claimed could diagnose 250 diseases could only diagnose 15, which was not much different from existing kits.

The so-called new technology never existed in the first place.

When the truth came out, Therapix's company value plummeted from $10 billion to $0 overnight, and investors lost all their investment money.

If they had thought about it logically, they would have easily noticed something was off.

From the moment Therapix announced the new technology, medical and scientific experts questioned how it was possible, but no one paid attention to their concerns.

Later, when CloudRide's IPO made Rolf Buch a huge success, various exposés and rumors about him began to surface.

The important part was that among the exposés, there was a claim that Minerva had copied a program created by someone else.

The person who said this was none other than Ranjin Kumar.

A fellow MIT Computer Science major and early collaborator with Rolf Buch, Kumar co-founded TalkIt before creating CloudRide.

I met him at a whiskey bar.

Knowing he liked alcohol, I deliberately chose this place for our meeting.

"Nice to meet you. I'm Ranjin Kumar."

"I'm Han Miru. Thank you for meeting me."

He was in his late 20s.

As his name suggests, he is an Indian-American.

Even though the United States is a multicultural country, the majority of the population is still white. However, the situation is different in San Francisco and Silicon Valley.

The majority here are Asians, and among them, Chinese and Indians are overwhelmingly represented.

Since India uses English as its primary language and has well-developed engineering schools, many Indians are active in the U.S. IT industry.

Satya Sharmalan, the third CEO of NS, is a prime example.

Kumar smiled and said,

"I was curious about who called Alex Preston and Rolf Buch idiots."

"You're well-informed."

"That's just how this industry is."

Indeed, there were many eyes watching that day.

This was also part of my strategy. The enemy of my enemy is my friend, so anyone who had a grudge against the two would want to meet me.

I ordered a single malt whiskey.

"Please, have as much as you like. I'll pay."

It's quite expensive, but it's worth it if you consider it as payment for information.

Kumar didn't refuse and drank. As he had a few drinks, his expression relaxed, and he started talking about various things.

The unique accent of Indian-Americans is strangely addictive. It even makes you want to try imitating it.

"So, why did you want to meet me?"

"I have some questions about Rolf Buch."

Kumar showed a slight hint of caution.

"What kind of questions?"

I lowered my voice and said,

"I did some background checks on the founders before investing in CloudRide."

"About Alex Preston and Rolf Buch?"

"Yes. I believe the core of a startup is the people. Our company's policy is to invest in people rather than capital or technology."

In fact, we don't have such a policy, but I just made it up.

"So?"

"I found no issues with Alex Preston, but I had some doubts about Rolf Buch."

"What kind of doubts?"

"Whether he is really a genius developer."

Kumar's expression changed slightly.

I pretended not to notice and continued,

"I met several people who worked with Rolf Buch, and they all said strange things. They said he's not a genius but a fraud who copies others' ideas and technology."

"Who said that?"

"I can't tell you. I have to keep it confidential."

It's a lie. I haven't met anyone else.

But if he knows that others said this and I kept it confidential, he might want to talk.

"I met Rolf at MIT. We're the same age, but he entered a year earlier. He was already famous then. Everyone, regardless of gender, wanted to be friends with him, and professors treated him specially."

"Didn't he start Tinting around that time?"

Kumar nodded.

"When Rolf offered to work together, I was overjoyed. It was like being recognized by a genius. Rolf's job was to create the initial program. Since there were no similar apps at the time, it quickly gained popularity. Most of the updates and service improvements were my responsibility. I often worked without sleep, fixing the program."

"Then what did Rolf do?"

"He mainly handled marketing and PR. He also met with investors. But people thought Rolf did all the programming work."

In fact, there's no reason for a founder to do all the programming.

Sometimes they just provide ideas and have others do the development. Conversely, they might get ideas and do the development themselves or just do the finishing touches.

Neither approach is necessarily wrong.

However, Rolf went a step further, claiming that he did everything. Developers wouldn't feel good about that.

"Anyway, Tinting was a huge success. When the company was sold, Rolf made $1.2 billion, and I made $150 million. I'm still grateful for that. If Rolf hadn't brought me in, I would have been a salaryman."

"I know you continued to work together after that."

"Yes, but it didn't go well."

In Silicon Valley, hundreds or thousands of startups are created every day, but only one in a hundred succeeds.

Kumar nodded and continued,

"We planned to create an SNS called TalkIt, where people could communicate anonymously. Originally, I was going to work with someone else, but Rolf, who saw the program I created, proposed a partnership. Initially, it went well. The media promoted it because Rolf Buch was the founder, and the user base steadily grew. Many venture capitalists wanted to invest."

"But why did it fail?"

"Because we couldn't filter out bad users. The ability to talk freely and anonymously was both a strength and a weakness. Even good people can say things they wouldn't normally say when hiding behind anonymity."

Cyberbullying became common. Even drug deals and sex trafficking occurred using anonymity.

It's impossible for the operators to monitor and filter all conversations in real-time.

"Rolf promised to improve the system to monitor and block problematic conversations, but he didn't."

As the saying goes, bad apples spoil the bunch. As bad users increased, regular users started to avoid TalkIt.

Even when they belatedly set up a list of banned words and strengthened filtering, it led to harm for good users.

Ultimately, the growth slowed, and users began to decrease.

"Still, I thought it had potential. The problems were gradually being solved. But the situation rapidly worsened when Rolf left to start CloudRide. Not only did he leave, but he also took one employee with him."

"Seid Lucas?"

"Yes. I didn't realize how important he was until he was gone."

This shows that he has a keen eye for talent, just like Rolf.

Kumar said with a sneer,

"Rolf always wanted to appear as a successful businessman. He didn't care about costs, setting up offices in the best locations and pouring huge amounts of money into marketing. Investors were willing to invest large sums when they saw this. Now I realize that investors look at reputation, not ability. Half of the Silicon Valley founders are probably frauds."

Most startups survive on investors' money without generating profits. Success makes you a businessman, and failure makes you a fraud.

I already knew all this.

I slowly dangled the bait to hear what I wanted to know.

"Did Rolf really develop Minerva?"

Kumar's expression changed.

I thought to myself,

Why did he expose Rolf Buch?

To tell the truth to everyone? For justice?

Not at all.

Just because Rolf Buch was a bad person doesn't mean that Ranjin Kumar, who exposed him, is good. He just wanted to bring Rolf down.

It's easy to criticize others' success from the sidelines without doing anything yourself. It's even easier if the other person really did something wrong.

Therapix refused to do public demonstrations and provided no information about the technology to investors.

Still, the media hyped her success story, and investors eagerly poured in money.

Would everyone have been so interested if she weren't a blonde beauty CEO?

Ultimately, everyone was fooled by her beautiful appearance and plausible vision.

The funny part is that the blonde hair wasn't even real. Her natural hair color was black, and she just dyed it blonde.

You don't know a bubble is a bubble until it bursts.

I can talk about Rolf like this because his true nature was revealed through later exposés and lawsuits.

David shook his head and said,

"Copying or creating similar services is common in the IT industry. Many lawsuits arise from this, but clear evidence is needed."

"That's why I want to do some investigating."

"How?"

I said as if I had been waiting for this,

"I plan to meet one of Rolf's former colleagues."

Thanks to SNS, it's easy to contact people you don't know. When I introduced myself as Continuum Capital, I immediately got a response saying they wanted to meet.

"I'll go alone."

* * *

The more successful a person becomes, the more friends and relatives they have. At the same time, the number of jealous enemies also increases.