Startups are the new pyramid scheme

It is not uncommon to find a start up with a “fully stacked” executive team, i.e. they already have a CEO, CTO, CFO, Managers (who they are managing is anybodies guess), directors and advisors. They sit at the top of the pyramid scheme, claiming they are “risking it all” and try to lure as many people into working for them as possible (for as little as possible I might add).

Meanwhile, you might find three engineers or developers actually creating the product. How is this even remotely healthy? Why are investors eating this garbage up?

You might think calling it a pyramid scheme is hyperbole, but investopedia states the following:

A pyramid scheme is an illegal investment scam based on a hierarchical setup. New recruits make up the base of the pyramid and provide the funding, or so-called returns, given to the earlier investors/recruits above them.

So what do we have in a startup.

  1. Hierarchical setup
  2. New recruits make the base of the pyramid and “provide the funding” i.e. knowledge and effort.
  3. Money accumulates at the top of the pyramid, despite many of the people at the top having never provided any utility or working as little as possible to maintain their pyramid.

All were missing at this point is body wraps and make-up supplies and we have ourselves a nice pyramid scheme. BUT NOW ITS SOFTWARE! So its completely different!

At the “startup” I work for, we have one manager, four engineers and one designer. We’re working hard to improve radiation oncology and have already accomplished a lot in one year. Wheres our VC funding? Maybe I should hire a team of fake executives and managers to stack our team twords the top. Maybe I should make a startup that only provides fake executives and managers to other startups.

I am being dramatic, but its hard not to take a step back and laugh at the situation.