Thursday, September 8, 2016

We haven't talked about this for a while

With a company like Hyperloop One, the fundamental question is always just how much management has bought its own hype. The product they've promised to deliver simply can't be delivered for a workable price. The most optimistic estimates exceed the numbers Elon Musk initially suggested by at least a factor of twenty and the latest generation of proposals appear to be even more expensive direction.

On some level, the management of these companies has to know that their claims aren't realistic, but that does allow for the possibility that they still produce some kind of maglev vactrain eventually. From a distance, it is difficult to tell the these true believers from those just trying to keep the balls in the air long enough to cash in.

Without reading too much into one story, charges of mismanagement and malfeasance are always a bad sign.

From a Bloomberg article by Sarah McBride:

The company, known as Hyperloop One, became the latest symbol of tech startup dysfunction on Wednesday when co-founder Brogan BamBrogan filed a lawsuit accusing Pishevar and others of mismanaging the company and lining their relatives’ pockets. BamBrogan, who was the chief of technology before being fired, claims his attempts to expose and correct the mismanagement led to a backlash when Pishevar’s brother, Hyperloop One’s general counsel, left a hangman’s noose on his chair last month. A lawyer for Hyperloop One called the lawsuit “unfortunate and delusional.”

Tensions had been mounting behind the scenes for weeks. In late May, several employees, including BamBrogan, wrote to Lonsdale, Pishevar and Chief Executive Officer Robert Lloyd to complain about voting control and other issues. “The disproportionate influence that the current ownership structure provides to them, especially in light of how they have used that influence, represents a threat to the success of this great company,” the letter said.

The employees said Pishevar’s and Lonsdale’s behavior included holding too many distracting parties at Hyperloop One’s downtown Los Angeles headquarters. Of particular concern was what they deemed nepotism. Pishevar named his brother general counsel. He also began dating Hyperloop One’s outside public-relations representative, whose fee then jumped from $15,000 a month to $40,000, more than any other Hyperloop One employees, according to the lawsuit. Meanwhile, under pressure from Lonsdale, the company hired his younger brother’s nascent advisory firm, Fideras, to provide banking services.

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