Ozy Media puts the worst of Silicon Valley deception on display

Ironically, the news startup, once branded as a Millennial attention-grabber, seems only now to be catching people’s eyes—but for the wrong reasons. The business’s public undoing began after a New York Times exposé this week. The story revealed wild hijinks—suspect viewership metrics, false marketing claims, a cofounder impersonating a YouTube executive during a call with Goldman Sachs. (Carlos Watson, Ozy’s public face and founder, said his partner, Samir Rao, suffered a mental health crisis; Rao has reportedly been put on leave while the board investigates.)

Watson described the Times’s piece as a “ridiculous hitjob,” but the ridiculous hits keep piling on. Current and former Ozy employees are speaking out about an allegedly abusive workplace culture. Ozy’s flagship Carlos Watson Show used deceptive marketing tactics, according to the Times. The business’s saving grace—Ozy Fest, a marquee event billed as “TED meets Coachella”—was apparently a shambolic mess in the making, Forbes reported. Investors and former allies are fleeing the company, posthaste.

Embellishments, exaggerations, and outright lies typify the worst of Silicon Valley’s hustle culture. When entrepreneurs, drunk on a dream, attempt to manifest success by any means necessary, the results can be disastrous. Watson pitched Ozy as an upstart media brand, and when the conventional indicators of making it didn’t come readily enough, the team fudged the truth—inflating “monthly users” counts to include tweet impressions, changing headlines on past stories to make the site seem psychic, and pretending celebs-for-hire were just friendly brand ambassadors. 

Ozy’s unraveling recalls other flameouts. Theranos, which is top of mind given the courtroom proceedings going on in recent weeks, deluded itself into alleged fraud as it quested to solve health care. WeWork’s rosy financial projects were pure insanity. Nikola took investors for a spin. 

The damage done by these companies varies, but a common theme runs through them all—attempts by founders to bring reality to heel with magical thinking. When marketing crosses the line into mendacity, the world suffers for it; businesses that deceive investors, customers, even their own employees, direct attention, energy, and effort away from more valuable pursuits. What a waste.

For my own part, I have never once encountered an Ozy story or show. Odd for someone as steeped in media as me, no? To be fair, I did encounter a piece of Ozy marketing—an ad for Ozy Fest—on a subway ride once. I remember thinking, “Wow, they got some good speakers, and look at that crowd!” Apparently, though, even that was an illusion—many of the headliners were aspirational and the ad’s image was lifted from Global Citizens Fest.

Sometimes what looks like an imposing structure is a façade all along.

Robert Hackett
@rhhackett
robert.hackett@fortune.com

NEWSWORTHY

Google doesn't want to be a bank anymore. The search giant owned by Alphabet is reportedly backing away from its two-year-long effort to let Google Pay users sign up for checking accounts and debit cards that would have been launched in partnership with banks like Citigroup and Stanford Federal Credit Union. Initially expected to launch in 2020, the project suffered from a series of missed deadlines and a key executive departure that ultimately ended with Google killing the plans, according to The Wall Street Journal. 

Zoom zooms into wall of shareholders. Video-conferencing giant Zoom and cloud-based software company Five9 have agreed to axe their proposed nearly $15 billion deal, after it did not receive the needed votes from Five9 shareholders, according to a statement released late in the day Thursday. The deal had been a point of intense scrutiny, with the U.S. government concerned about Zoom's ties to China and proxy advisory firm Institutional Shareholder Services worried about Zoom's slowing growth.

Please return it (or else?) Decentralized finance protocol Compound is asking users to give back the more than $90 million of its native token, COMP, that was accidentally dispersed in a recent upgrade, CNBC reported Friday. Robert Leshner, the DeFi protocol's founder, tweeted Thursday night a request for those who received "a large, incorrect amount of COMP" to return it. But Leshner warned, if they don't, "it's being reported as income to the IRS, and most of you are doxxed"—a warning that he quickly walked back, calling it a "bone-headed tweet/approach."

Regulators look to rein in robocalls. The Federal Communications Commission is exploring new rules that would take aim at phone companies that are helping fuel the surge of robocalls anyone with a cell phone seems to be receiving, according to The Wall Street Journal. Under the proposed rule, "gateway" voice service providers would be required to know more information about their overseas customers—where many robocalls come from—and block any calls if the FCC says they are illegal. 

MiamiCoin brings in the moolah. The city of Miami's own cryptocurrency venture (part of a much broader push to become a central hub for digital assets) is paying off. In about two months, "MiamiCoin" has generated $7.1 million for the city, The Washington Post reported Thursday. Mayor Francis Suarez thinks MiamiCoin could bring in as much as $60 million over the next year, though. 

FOOD FOR THOUGHT

Location data, location data, location data. A $12 billion market has been created around phone location data, attracting everyone from big investors wanting to understand a business's foot traffic to fast-food companies trying to lure customers. But which companies actually sell the data—a practice that comes with a lot of privacy questions—has been rather opaque. Well, on Friday, The Markup reported that it has identified nearly four dozen companies that are in cell-phone-location-data business, and though it is "hardly comprehensive," the tech publication acknowledges, it does begin "to paint a picture of the interconnected players that do everything from providing code to app developers to monetize user data to offering analytics from '1.9 billion devices' and access to datasets on hundreds of millions of people."

From the article:

Once a person’s location data has been collected from an app and it has entered the location data marketplace, it can be sold over and over again, from the data providers to an aggregator that resells data from multiple sources. It could end up in the hands of a “location intelligence” firm that uses the raw data to analyze foot traffic for retail shopping areas and the demographics associated with its visitors. Or with a hedge fund that wants insights on how many people are going to a certain store.

“There are the data aggregators that collect the data from multiple applications and sell in bulk. And then there are analytics companies which buy data either from aggregators or from applications and perform the analytics,” said Tsiounis of Advan Research. “And everybody sells to everybody else.” 

IN CASE YOU MISSED IT

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Beijing's crackdown on teen gamers is about more than screen time by Grady McGregor

Angela Merkel left German CEOs hanging on a bunch of issues. They want the next Chancellor to address 3 now by Christiaan Hetzner

Crypto tax rules are a-changin' by Robert Hackett and Declan Harty

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BEFORE YOU GO

F to the A, M, I, L, Y. Declan, here. Finally, we are just a little more than two weeks out from the third season of everyone's favorite "fictitious" media family: the Roys of HBO's Succession. 

Led by patriarch Logan (Brian Cox), the Roys own one of the world's biggest—and likely least functional—media conglomerates in the show's world. But the company has its fair share of problems, including the fact that three of the four Roy children are in a seemingly never-ending competition to succeed their father atop the company's hierarchy. Sound familiar? Well—as the Financial Times wrote in its weekend essay— it should. Parents and children have been wrestling for control of companies for decades, but it remains to be seen who will come out on top at the Roys' Waystar RoyCo. I'm just hoping we get to see Jeremy Strong rap again.