The Company Scandal Scale

Rate company scandals with this handy five-point system.

It’s been a banner year for corporate scandals in Silicon Valley and beyond, but until today there hasn’t been a crisp way to categorize them. Are all scandals the same? Hardly! When you're experiencing these problems from inside a company, everything feels like the end of the world. Sometimes it's not. For your convenience, and to put things in perspective, I hereby present my five-point scale for company scandals. Supply your own examples and see if you can guess what the ‘F’ stands for.

F1 - Politics

Every company hits this one sooner or later, and it’s usually more a sign of teething pains than decrepitude. There’s drama with the founders. Disgruntled employees leave. Even the gruntled start looking elsewhere as early options vest and growth slows. People complain to the press. The culture lurches around a few times until hopefully settling back someplace productive. “It’s just not the same, man.” This one sucks to live through, but most companies do just that: live through it.

F2 - Creeping Exaggerations 

The company has been reliably and systemically overstating its metrics: Dubious revenue recognition. Triple-counting users. Under-reporting problems. In just the right light, from just the right angle, everything looks like a hockey stick. Some youthful exuberance and boasting are perfectly fine in startup land, but if you’re putting out numbers with the intent to deceive, you’re just lying. Do this long enough and well enough and, when the world finally catches on, you’re in an F2 failstorm. Trust erodes among customers, employees, investors, partners, and media. A good way to stay clear of this is to have the same message for all your constituencies. Lying to everyone is hard. Much better to tell the truth.

F3 - Say what now?

A sufficiently advanced technology may be indistinguishable from magic, but a sufficiently advanced demo is indistinguishable from technology. That's another way of saying that the core technology or product don't actually do anything and probably never did. Results to date have been mostly brought about by optimism, vigorous hand-waving and a lot of manual labor. This one is hard to survive because it means that your fundamental economics are unachievable illusions.

F4 - Straight Up Fraud

What you thought was an exciting business venture is actually an exciting criminal conspiracy. The company is out of business and someone's going to jail, but you might still see your logo parodied on a TV show or video game when they need something evil. Jail time and going out of business not applicable to banks, because, banks.

F5 - A Tour of the Capitol

Congressional hearings! New legislation named after you! Mission to change the world accomplished, but maybe not in the way the founders intended.

That's the five point scandal scale. If you're in a company going through one of these just remember: somewhere else has got it worse. Usually.