I’m increasingly alone in the world in my frustration about the declining quality and reliability of technology. With all the hype around artificial intelligence, or AI, it seems reasonable to expect that the IT systems of the U.S. government and major corporations would no longer be child’s play for hackers to break into. That doesn’t appear to be the case.
OpenAI, which developed the chatbot, last month confirmed a data breach in the system that was caused by a vulnerability in the code’s open-source library. The breach took the AI service offline until it was fixed.
Seems to me, hacker intelligence trumps the artificial kind.
My skepticism about technology is rivaled only by my skepticism about six-figure corporate and academic positions known as DEI, or diversity, equity, and inclusion. DEI positions are all the rage at government-funded universities and publicly traded corporations, and I’m a voracious reader about people who land these plum jobs. The positions are held exclusively by minorities and overwhelmingly by women of color.
For the life of me I can’t figure out exactly what these executives do. I’m uncertain if DEI implementers are even held to some meaningful performance accountability.
Latondra Newton, Disney’s DEI chief for the past six years, resigned last week and the memo to employees from Disney’s HR chief Sonia Coleman said Newton “has led the company’s strategic diversity, equity and inclusion initiatives, including partnering with stakeholders across the enterprise to amplify stories of the world by people around the world. She has been dedicated to ensuring every person sees themselves and their life experiences represented in a meaningful and authentic way.”
WTF does that mean? Coleman’s memo tellingly didn’t provide specifics.
Not surprisingly, the ultimate in BS in my mind would be an upstart tech outfit claiming to use AI to help major corporations improve their DEI. I learned last night that such a company exists, and much to my surprise and dismay, it was launched in Israel, whose tech prowess and achievements have always struck me as bigger than life. Despite Israel being a mere speck on the map, Tel Aviv was recently ranked fifth in an annual survey of the world’s most attractive ecosystems for startups and innovation, overtaking Boston and Beijing.
The AI/DEI company is called Joonko, which was founded in 2016 by an Israeli woman named Ilit Raz, who subsequently established a U.S. headquarters in New York City. Joonko, named after Japanese mountain climber Junko Tabei, the first woman to reach the summit of Mount Everest in 1975, claimed it could harness AI technology to bring diversity to the workplace.
Joonko, of course, wasn’t just a business for Raz. Being a woman in tech, Raz said she had personally witnessed the major roadblocks to the hiring of underrepresented talent. Never mind that Israeli women fare much better in tech than their Silicon Valley counterparts.
Why did Joonko suddenly appear on my radar screen? This story in the Times of Israel, and this one in the New York Post, among others. There’s something to be said about the Starkman Approved bullshit radar.
From the NY Post:
Joonko founder and CEO Ilit Raz resigned after an internal probe found she had “engaged in egregious, unethical and fraudulent conduct, which caused harm to the company and its shareholders,” the startup’s board of directors said in a statement obtained by The Post.
Raz allegedly misled investors by claiming Joonko was working with 150 companies “when in practice the number was significantly smaller,” according to Israeli tech news outlet CTech, which first reported on the allegations against Raz.
News of Raz’s alleged scheme — which comes after the company raised $25 million in cash from investors last fall — included the submission of fake invoices that were attributed to real people at real companies, fake wire transfers and even fake bank accounts, a source with knowledge of the situation told The Post.
“It really is one bad actor. It’s staggering, the individual [wrongdoing] and the level of sophistication of the CEO,” the source said.
Joonko unveiled its $25 million Series B fundraising round in September, drawing coverage by Insider and TechCrunch, publications of choice for tech PR people because they specialize in fawning puff pieces. At the time, Joonko said it planned to use the funds to expand its U.S. workforce.
A September press release touted “remarkable growth” at Joonko under Raz’s leadership “with 500% growth in sales for two consecutive years.”
“I learned very early on that it’s important to pitch Joonko as a business,” Raz told Insider last September. “Once you can prove that your message is able to stand up itself in terms of metrics, then you can raise from major players.”
Joonko’s release announced the appointment of Albrey Brown, General Manager of the company’s U.S. operations and VP of Strategy. The release said Brown previously built and oversaw a variety of DEI programs at companies like DocuSign and Pivotal Software, and most recently at Airtable, where he served as the company’s first diversity and inclusion chief. Brown’s LinkedIn profile says he was an advisor to Joonko for more than a year before assuming his full-time position.
“While there are many recruiting platforms out there, Joonko is the first and only platform that focuses exclusively on the underrepresented – putting it front and center of the product, values and mission,” Brown was quoted in Joonko’s release. “After dedicating the majority of my career to helping companies prioritize underrepresented talent, it was immediately clear that Joonko is where I’d be able to make an impact on a much larger scale.”
Brown told The Times of Israel in November that Joonko had 130 customers, including companies such as Nike, American Express, Adidas, PayPal, and Crocs, using its platform. There were about 170,000 candidates every month applying for jobs, Brown said.
The average business using Joonko sees a 25% increase in underrepresented candidates in their hiring funnel and hires one in six of the candidates sourced through the platform, the company said in a statement announcing its funding round.
Joonko raised a total of $38 million in funds from various VC firms including, Insight Partners, which is based in New York City but has offices in Israel and Silicon Valley, Berlin-headquartered Target Global, Oakland-based Kapor Capital, which invests in early stage startups “that close gaps of access for all,” and Vertex Ventures Israel.
Joonko said it would use the proceeds of its September funding round to expand its New York team and boost marketing and sales to increase activities in the US, where all the companies supposedly using Joonko’s software were based.
According to an unidentified New York Post source, Insight Partners conducted “a comprehensive due diligence effort that included “financial audits, customer calls and background checks” and didn’t uncover anything amiss. Tragically, that doesn’t come as a surprise. Due diligence doesn’t appear to be one of Silicon Valley’s strong suits.
A messaging app called IRL that was valued at more than $1 billion two years ago is being shut down after a board investigation revealed that 95 percent of the users were automated bots. Company founder and CEO Abraham Shafi claimed 20 million monthly active users.
IRL, an acronym for “In Real Life,” was intended to connect people online with shared interests and facilitate in-person meetings. The company’s backers included SoftBank’s Vision Fund. In one of Insider’s vintage puff pieces, the publication featured Shafi saying that, “authenticity and quick learning” are key to building a billion-dollar business.
Then there’s Charlie Javice, who JPMorgan Chase claims took advantage of America’s biggest bank and tricked its due diligence team into buying her tech startup called Frank using allegedly fraudulent customer metrics. Frank, which supposedly simplified the student financial aid application process, also had VC backing, including from an Israel-based firm called Aleph whose CEO Michael Eisenberg celebrated Frank’s sale to Chase in a post on Medium. Eisenberg claimed he was introduced to Javice by then Bloomberg reporter Dominic Chu, who has since moved on to CNBC.
Forbes reported that when Frank employees approached Javice with concerns about what they believed were repeated misrepresentations about the company’s customer base, Javice dismissed them.
“Her response was always: ‘Listen, these old people don’t understand, this is how it works, you fake it ’til you make it,’” Forbes quoted an unidentified source as saying.
Another alleged fraudster is Crystal Huang, a Utah tech entrepreneur who earlier this month pleaded guilty to cooking the books of her upstart human resources software firm to attract $5 million from venture capitalists focused on diverse investing.
As reported by MarketWatch, Huang raised $5 million from 13 different investors in three separate funding rounds between 2015 and 2020.The investors were private equity and venture capital groups from New York, Illinois, California, Texas, Oregon, Arizona and Japan that focused on financing startups founded by minorities.
A civil lawsuit brought by the Securities and Exchange Commission in 2021 alleged that Huang used significant amounts of the money for herself and her family, including to pay credit card bills and buy property.
Let’s not forget alleged fraudster Sam Bankman-Fried, the founder and former CEO of crypto firm FTX.
According to a report released Monday by CEO John J. Ray III, the defunct cryptocurrency exchange — which once serviced more than 1 million users — claimed to be “the vanguard of customer protection efforts in the crypto industry.” Ray’s report alleged this public-facing fidelity to investors was a “mirage,” and that Bankman-Fried, along with other senior executives, mixed customer deposits with corporate funds and “misused them with abandon.”
One would have to be naïve not to see a clear and distinct pattern here. Legions of millennials who talked a good game about making the world a better place all embroiled in allegations of fraud and egregious wrongdoing.
In a curious way I feel sorry for them. My generation was raised with admonishments like “reputation is everything,” “your word is your bond,” “there is no substitute for experience,” and “slow and steady wins the race.” These kids were raised on the principle, “fake it till you make it” and you, too, can become ruthless and media admired leaders like Elon Musk and Mark Zuckerberg, who let’s be honest, won’t be remembered for their honesty and integrity.
I’m not alone in my belief that so far only the tip of the iceberg has been exposed.
“Lots more stories like this coming,” tweeted Sean Brynes, former CEO of Outlier.ai, after Shafi’s alleged fraud was reported. “Oh man, the number of times I’ve been asked why my company isn’t growing as fast as X and then found out X was a fraud all along.”