RANT: Founders who fake metrics

I have evaluated a lot of startups as part of my work. My approach has changed from being optimistic to being suspicious of a lot of founders, even before the process starts.

The sheer number of founders that I come across that try to game metrics/play around with data to make the startup look good.

Most commonly:

1. Completely changing the definition of margins, repeat rates, etc. and never clarifying that they are using different definition.
2. Often giving rebates/discounts to key stakeholders but finding ways to hide it from their P&L so that it’s not visible. THIS IS SO COMMON - lot’s of them start showing revenues, and then you will see another cost item rising at the same pace, and lot’s of times it will just be money moving around
3. Sometimes completely giving the wrong picture of how their product works on ground. You then speak with their customers, and they describe something completely else.

Things like these are eating up the ecosystem. These founders also end up fooling some VCs, and then capital get’s kept away from actually good founders who have good intentions.

There was a recent major investment in the commerce space, and that is another one such example of a startup doing this. Needs to stop.