
Ask HN: My startup seems to be padding numbers - onthestove
Startup is a marketplace.<p>Recently I&#x27;ve noticed healthy growth, hitting and exceeding VC targets. Looked into it.<p>Turns out a couple of orders are being processed every month for one of the co-founders other business. The niches are totally different so there is no way to claim that they&#x27;re legitimate orders.<p>I&#x27;m struggling to find a legitimate explanation. Either, the orders are used to pad our numbers and make us look better, or something to do with the financials of the other business.<p>What should I do? Could there be a legitimate explanation that I&#x27;m not thinking of? Am I wrong to be concerned?<p>e: it&#x27;s money, not just users&#x2F;traffic, it&#x27;s also a significant percentage.
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one2know
Find another job. Chances are all of management, VC's, board, everyone is in
on it.

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muzani
I know startups that 'padded' their numbers by buying their own stuff. The
justification was that people who sold their stuff through the app became
regular users, so it's not so bad. Some justify it as a "marketing cost",
still more effective than putting it on Facebook ads.

I don't think it's too bad, as long as they disclose it honestly, and not
straight up fraud where they make up fake numbers and then selling those
numbers to advertisers/investors.

But in the end, product market fit makes everything easy, so it could be a
hint of much deeper problems.

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everybodyknows
Best to confide in no one who could possibly leak your knowledge back to the
company. Whatever you do, do not confront the perp with the evidence.

Related-party transactions are something investors would demand be disclosed.
Read through any investment contract docs you have.

If the amounts are increasing, the game's on a path to blowing up.

Options:

1\. Consult a lawyer.

2\. Go to the financial authorities.

3\. Wait and hope reality improves enough to obviate the fakery.

4\. Look for another job.

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onthestove
Don't have access to contracts without arousing suspicion.

It's been happening for a few months and amounts have increased.

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dyeje
Why do you care? If you're worried that the company isn't going to survive, go
elsewhere. If you're acting out of a sense of morality, I encourage you to
think about the pros and cons of making a fuss over this (you'll probably find
that there is no upside and alot of downside).

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corporateslave5
Just go work somewhere else

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mattbillenstein
Proper metrics should discount any employee-driven traffic - it's not usually
real and it's sorta a hard thing to account for entirely.

We had a table of email addresses we would mark as employees and periodically
refresh this manually against actual user traffic. Then this table would get
joined to anything generating KPIs or real metrics so we could discount those
events.

I'd point this out to the relevant teams dealing with data and KPIs - they
shouldn't want to be counting this traffic, but if they insist, I'm not sure
where you go from there.

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onthestove
It's not traffic, it's money. It's also a significant percentage.

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rajacombinator
I’d be surprised if this doesn’t happen very frequently tbh...

