Inventing Anna, The Dropout, WeCrashed: What TV’s scam craze tells us about bad business

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IPOs gone oh-so-wrong. Romancers who aren’t at all what they appear. Corporations operating in secrecy while playing a shell game with consumers. Lately, there has been a proliferation of television shows dedicated to fraudsters and scammers of all kinds.

Maybe it’s because we’ve all been locked up for two years and are now wary of the outside world. Maybe it’s because we’re all living so much of our lives online these days. Whatever the reason, the entertainment world seems to be focusing more and more on true crime and the truly terrible things people do to one another. 

Is it all just schadenfreude, or is there something to be gleaned from these tales of no-good, rotten, very bad actors and their deeds? We looked at four of the most popular recent docuseries to determine what they could teach us about being smarter both personally and professionally.

Inventing Anna

What it is

Anna Delvey (real name: Anna Vadimovna Sorokina) moves to Paris to work for Purple magazine and is sent to New York City, where she stays and bamboozles a host of victims by claiming that she is a German heiress. She uses this cover to attend exclusive fashion shows, gallery openings, restaurant openings, and more. The more she rises through the ranks of New York society, the more she becomes legitimized and the more plausible her newly assumed identity becomes. 

By cultivating a false identity she steals more than a quarter of a million dollars, then disappears when her lies began to unravel. She subsequently moves among a series of luxury hotels with no money on the strength of her story and her imaginary financial backing.

Takeaway

Many of the folks on this list start out subscribing to the “fake it ’til you make it” principle, but end up taking their charades too far. While the concept can be helpful — allowing you to move forward with confidence early in your career or in a new initiative — when the faking it takes over and the making it never kicks in, you can end up in a downward spiral.

A plausible story and a pretty face can go a long way and fool a lot of people. Put in place systems and processes for the way you run your business and your finances and don’t deviate from them just because someone is appealing or appears to move in illustrious circles.

Before you work with someone, do your due diligence, checking financials, background and other items to ensure they are who they appear to be.

A scammer can do more than waste your time; they can cause you to wade into an investment or a sales process that ends up costing you in both money and damage to your reputation.

The Dropout

What it is

Elizabeth Holmes founds Theranos, a Silicon Valley health tech startup, after dropping out of Stanford following her freshman year and using her remaining tuition money to fund her company. The secretive Holmes claims that Theranos has developed a technology that will revolutionize blood testing, by making it possible to easily and quickly test for a variety of conditions with a single drop of blood. The problem? None of it is true.

Part of Holmes’ — and by extension, Theranos’ — credibility came from her personal connections and ability to convince influential people that she and her company were on the level. Political and military leaders in particular, including Henry Kissinger, George Schultz, Jim Mattis and Betsy DeVos, were among those who invested heavily in Theranos’ technology.

Takeaway

Like Delvey, Holmes gained credibility from those she had on her side who attested to her claimed competence even when they had no evidence to back it up. Although she also fooled some folks in the scientific community, many of her biggest supporters came from outside the medical or scientific establishment.

They had no real way of knowing whether her claims were true or not since they were dealing with a technology and a business that existed outside of their normal purview.

Be careful when you get into a new investment, a new market segment or a new strategy. Talk to those who are already experts and ensure that you have the insight and information you need to make good decisions. If something sounds too good to be true, it probably is. An opportunity that is unprecedented, backed by those who lack the expertise to properly evaluate it, may not be all that it’s cracked up to be.

WeCrashed

What it is

WeCrashed tells the story of Adam Neumann and his wife and inspirational muse-turned-magician Rebekah Neumann. The two preside over the astronomic rise and eventual financial downfall of WeWork, one of the world’s most valuable startups which eventually collapses under the weight of its own hype during an ill-advised IPO.

What is essentially a commercial real estate company selling coworking space eventually devolves into something more like a cult. Its work-hard, party-hard corporate culture, financial shenanigans and massive IRL overhead later result in huge sell-offs and layoffs plus a reputation as one of the most over-valued companies in history.

Takeaway  

Corporate, brokerage or team culture should be about more than matching T-shirts, fancy offices and ill-advised parties. If there’s nothing underpinning your organization — skill, solid service, a great reputation according to your clients — all of the flashy extras will not sustain you or your business.

Innovation is important, but there are business fundamentals that need to be followed. Make sure that you’re seeking out good advice and taking that advice when it’s given. Don’t surround yourself with “Yes” people or those who are just along for the ride; cultivate those who will tell you hard truths as well.

Make sure that the folks on your team are there primarily for the good they can do and the value they’re adding. If all of your recruiting is focused on superficial criteria, you’ll end up with a business that’s all facade and no foundation. Hype is no substitute for solid financial and operational management along with staff members and agents who can get the job done.

As an agent, be careful who you’re following and make sure it’s someone who has values and vision that align with your own. Don’t be fooled by smoke and mirrors; ensure that you’re working for and with folks you can be proud of — and who won’t leave you holding the bag for their bad behavior.

Tinder Swindler

What it is

Posing as Simon Leviev, Israeli-born Shimon Hayut travels around Europe presenting himself as the heir of a Russian-Israeli diamond mogul, Lev Leviev. Using the dating app Tinder, he connects with women and asks them to lend him money, essentially creating a Ponzi scheme of defrauded women as he romances new women with gifts and experiences paid for by previous victims.

Later, to create a greater sense of urgency, Hayut sends messages claiming to have been attacked and claiming that his bodyguard has been injured.

Women take out bank loans and open credit cards to help, and Hayut sends forged documents as evidence of bank transfers for repayment. Although he abandons some victims, he manipulates and threatens others to get more money. His total take is estimated to be $10 million from around the world.

Takeaway

The prevalence of online communication and relationships, virtual transactions, and long-distance, sight-unseen property sales and purchases is a breeding ground for scammers and fraudsters of all kinds. From spoofed texts to cloned Instagram accounts, you don’t always know who you’re dealing with on social media or online.

Exercise even more caution than usual when working with, collaborating with, or communicating with clients and colleagues virtually. Reach out to your tried-and-true professional network for recommendations and testimonials or work within your brokerage company to find referral partners you can trust.

Take careful stock of financial documents, wire transfer instructions, and other statements to make sure that they are what they purport to be.