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Silicon Valley Murder Mystery: How Drugs and Paranoia Doomed Silk Road

I. “You’re Sitting in the Big Chair . . .”

Ross Ulbricht had imagined that it might all come down to this one day.
That at some point during the prodigious rise of his hot tech start-up
he would be obliged to make a terrifyingly ruthless decision. Now, in
early 2013, the time had arrived. The question was rather simple: Was he
ready to kill someone to protect his billion-dollar company?

The technology business has long purported to change the world and make
it a better place. But, in reality, there is a decidedly more cynical
underside to all this euphoria. In Silicon Valley, after all, many
founders will often do whatever is necessary to protect their
creations—whether that means paying a hefty legal settlement to hush
the people who helped hatch the idea for their company in the first
place (Facebook, Square, Snapchat), callously vanquishing a co-founder
(Twitter, Foursquare, Tinder), or remorselessly breaking laws and
putting thousands of people out of work (Uber, Airbnb, among hundreds of others). But, for Ulbricht, the price was steeper. In order to save his beloved start-up, the Silk Road, an Amazon-like “everything store” for
the Dark Web, he needed to “call on my muscle,” as he put it to one
associate. He needed to have a guy whacked.

Ulbricht hadn’t intended for it to all come down to this. The Silk Road,
like many start-ups, had begun simply enough, in 2011, as a college
curiosity. As a rakishly handsome wanderlust kid from central Texas,
Ulbricht had traveled north, away from his small life. He matriculated
at Penn State University, where he studied materials science and
engineering, and acquired interests not uncommon among contrarian
millennials—particularly those who enter the technology business.
Ulbricht, now 33, developed an affinity for Ayn Rand books and libertarian philosophy; he appeared to view the world not as it was, per
se, but as he wanted it to be. Like Uber co-founder and C.E.O. Travis
Kalanick, or early Facebook investor (and Donald Trump supporter) Peter
Thiel, both of whom had been fans of Rand, Ulbricht adhered to a
particularly defiant strain of Randian dogma: “The question isn’t who
is going to let me; it’s who is going to stop me.”

In political-debate clubs and at the Corner Room diner, on campus, the
young Ulbricht fixated on the ostensible inconsistencies in how the U.S.
government determined what was, and was not, legal. His philosophizing
relied on a particularly college-aged line of argumentation. Big Macs
led to diabetes and heart attacks, he would often argue, so why was
McDonald’s lawful? Cars facilitated tens of thousands of casualties per
year, he noted, yet they remained highly unregulated and were capable of
going several times the speed limit. The same was true with alcohol and
cigarettes, which have killed millions. So why, Ulbricht provoked, were
recreational drugs illegal?

To Ulbricht, it seemed like an arbitrary distinction. Weren’t people
inevitably responsible for what they put in their own bodies—be it
fast food, booze, cigarettes, or, say, marijuana? The real problem with
the drug business, he surmised, was that it was violent and opaque. So
he came up with the germ of an idea: what if there were a Web site, like
Yelp, that rated buyers and sellers, so that exchanges would be fair and
more transparent? There would be fewer fatal overdoses, he reasoned.

“I WOULD HAVE NO PROBLEM WASTING THIS GUY,” ULBRICHT SAID.

But Ulbricht wasn’t simply a precocious and edgy libertarian. He was
also a gifted, self-taught computer programmer—someone who could
engineer code to the whims and vicissitudes of his wildest fancies. And
so, like many bright kids in their 20s, Ulbricht eventually headed to
San Francisco to develop his company. He arrived in Silicon Valley as
the peninsula was feverishly bubbling with a new wave of start-ups
(Uber, Lyft, Airbnb, Slack), all of which were taking advantage of easy
access to venture capital and low interest rates—and growing their
valuations into the billions as they made stars of their founders.

Ulbricht’s idea for an e-commerce site that operated on the Dark Web,
beyond the watchful eye of the government, may have seemed galling to
some. But a new precedent was emerging in the Valley. Countless
start-ups were already trying to capitalize on the legalization of
marijuana in various states. Others operated in similarly opaque
markets, like facilitating prostitution on pseudo dating Web sites. In
Silicon Valley, indeed, pushing the letter of legality is not only
admired but also financially rewarded as the very essence of
“disruption.” By the time Ulbricht arrived in San Francisco, Uber and
Airbnb had already staked their entire multi-billion-dollar business
models on defying existing regulations, from what constituted a hotel
room to who could offer a taxi ride. They were not only in heated battles with various unions but also in litigation with city
governments
. This new generation of Randian founders didn’t ask for permission. They just took it.

Video: When Bad Things Happen to Good Ideas

Ulbricht’s start-up, which he named the Silk Road, an homage to the
ancient trade route of the Han dynasty, was no different. The Silk Road
matched buyers and sellers, who shipped the product right to your door
as if it were simply a hardcover book or sweater, all for a small
commission. Sometimes drug dealers would take their “product” and tape
it to the back of DVD cases or stuff it into hollowed-out batteries, but
most drugs just appeared in a puffy envelope, undetected by federal
enforcement agencies. The entire system, at least from a tech
perspective, was admirably efficient.

Yet the site soon morphed from Ulbricht’s original, if naïve, plan.
Despite his intent to disrupt the shady business of recreational-drug
purchasing, Ulbricht saw the Silk Road become a hub for exchanging
everything from hacking tools and drug-laboratory equipment to cocaine
and cyanide. People soon started selling Berettas and AK-47 assault
rifles, and eventually poisons that could be used to commit suicide.
There were even discussions of selling body parts, such as livers and
kidneys. Business was booming. Within 18 months of the operation, the
Silk Road was processing $500,000 per week in sales and Ulbricht was
sitting on millions in cash. If the Silk Road were valued by traditional
venture capitalists, it would have been among the most successful early
start-ups in Silicon Valley history. Whatever reservations Ulbricht may
have had seemed quickly overwhelmed by his own ambitions to keep the
site growing.

By early 2013, however, Ulbricht was encountering his first major
management crisis. One Silk Road employee—a family man in central
Utah, no less—had been arrested in a cocaine deal, and Ulbricht
believed he’d stolen $350,000 of his money.

Ulbricht, who operated on the site under the pseudonym “Dread Pirate
Roberts”—a nod to the 80s movie The Princess Bride—treated security
as his top priority. He discussed everything on a secure chat
application. After the alleged theft, he consulted his consigliere, a
Canadian whom he had never met in real life but who operated on the Silk
Road under the nom de plume “Variety Jones.” The first solution to the
management crisis seemed the easiest: to simply pay the employee, Curtis
Green, a visit and subsequently scare him into returning the stolen
money. The second solution involved beating Green up for his treason.

But Ulbricht feared that neither option would work. His site was based
on trust and scruples. If word got out on the Silk Road that users could
steal hundreds of thousands of dollars without reprisal, others might
skim, too. For days, Ulbricht waffled over the decision; he was, after
all, just a twentysomething physics geek and coder from the Texas Hill
Country. Was he really capable of violence?

After a few days, Variety Jones messaged Ulbricht: “So, you’ve had your
time to think. You’re sitting in the big chair, and you need to make a
decision.”

“I would have no problem wasting this guy,” Ulbricht replied.

II. The Dark Side of the Valley

For all the wonderful promise that each new technology affords, people
rarely use it in the way it was intended.

When the founders of Twitter started the social network, they had one
simple goal: to connect with their friends in short, concise bursts
while in a loud nightclub. One hundred and forty characters and 313
million active monthly users later, the site is now incessantly infected
by trolls; it is a recruiting device for ISIS and undeniably helped
elect Donald Trump. Similarly, Tinder was originally intended to allow
unattached college kids to meet one another and maybe go on a date. The
service has since been used by chauvinists to prey on women. Facebook’s
newsfeed, likewise, was infiltrated by Russian operatives who fabricated
stories that were used to sway the 2016 U.S. presidential election. The
nerds who first used 3-D printers wanted to make plastic wall hooks for
their bedroom, or a new iPhone case for a friend. Yet from almost the
moment they were introduced to the public, 3-D printers were used to
build fully functional plastic guns and other weapons that can’t be
picked up by a metal detector.

The Silk Road was, in many ways, no different. Ulbricht started the site
to make it safer to buy pot or magic mushrooms on campus. And, like many
founders in the Valley, Ulbricht simply expected people to use his
creation just as he had intended. Indeed, Silicon Valley may have
created more wealth than any other locus in human history, but much of
that wealth has been built on the ideas of young people without much in
the way of business, or life, experience. There is a reason that you
don’t hear middle-aged executives say, “Move fast and break things”
(Mark Zuckerberg’s famous mantra), or “Make better mistakes tomorrow”
(an early Twitter motto). In fact, many tech founders now follow a
familiar arc, in which they spend the first part of their careers
rapidly disrupting an industry and the second part fending off lawsuits
and apologizing for their actions.

Ulbricht’s story follows a similar trajectory. When he launched the Silk
Road, Ulbricht had daydreamed that perhaps a few people might use it.
Almost immediately, however, it became a phenomenon. When he shared his
charts and graphs showing sales and revenue with Variety Jones, it was
apparent that the company would earn $100 million in sales its first
year. After Jones did the math, he predicted that the site would earn
$1 billion in sales the following year. It might grow by a multiple of
10—or “10x” in Valley parlance—by 2014. And as the sole owner of
the site, Ulbricht reaped all of the profits directly.

During the course of 2012, as Ulbricht attempted to come to terms with
the scale of his creation, he formally hired Variety Jones to become his
de facto C.E.O. coach, no different from the coaches Mark Zuckerberg and
Steve Jobs had employed while their companies were growing so quickly,
paying him as much as $60,000 per session. At first, Jones wanted to
ensure that the creator of the site knew what was at stake. “Not to be
a downer or anything,” Jones wrote to Ulbricht in a secure chat room on
the site, but “understand that what we are doing falls under U.S. Drug
Kingpin laws, which provides a maximum penalty of death upon
conviction. . . . The mandatory minimum is life.”

But by that point, Ulbricht seemed concerned more with the growth of his
company than with its collateral damage. Like start-up founders who eat
and sleep their business, Ulbricht was unequivocally committed to the
Silk Road. “Balls to the wall and all in my friend,” he replied.

Ulbricht’s quick pivot may seem remarkable, but for some inside the
Valley, it fit into a larger paradigm. Once a shy kid from Texas, he had
created a platform that was now being used across the world. But unlike
Kalanick or, say, Airbnb’s Brian Chesky, Ulbricht was never going to be
on the cover of Fast Company or Forbes. As his business grew, in fact,
he was forced to become more reclusive. While Dread Pirate Roberts
became the subject of stories in Forbes, Gawker, Techcrunch, and many
other sites, Ulbricht operated the Silk Road anonymously from coffee
shops and libraries throughout San Francisco. He hung out around
Internet cafés, used dating Web sites to meet girls, and mostly kept to
himself. He lived modestly in an apartment that he had found on
Craigslist; he paid in cash and told his roommates that his name was
“Josh,” not Ross. When family and friends wondered what he did on his
computer all day, he told some he was trading currency or working on a
secret project.

In a way, Ulbricht’s anonymity forced him to double down on his alter
ego, Dread Pirate Roberts. The decision to murder Curtis Green was the
most chilling example. Not only did Ulbricht willingly commission an
$80,000 hit, but he also kept an image of Green, his jowl hanging to
the side, in a folder on his computer.

At first, Ulbricht was upset about the situation, messaging the hit man
he had hired that he was “a little disturbed.” Nevertheless, he soon
found a way to justify his actions as a means of protecting his
business. “I am pissed that he turned on me,” Ulbricht told the hit
man. “I’m pissed I had to kill him. . . . I just wish more people
had some integrity.”

III. “Create New Identity”

How quickly technology can change someone. Back in 2011, Ulbricht was
making $300 a week as a lab researcher. He was sleeping in a basement,
and his only belongings were two black garbage bags at the end of his
bed, one full of clean clothes, the other dirty. Then a big idea dawned
on him, no different from the ideas that spawned Uber, Airbnb, Twitter,
or Facebook. Just like the 10,000 other entrepreneurs who land in San
Francisco with a fantasy and a computer, Ulbricht typed lines of code
and out came a world that didn’t exist before. There were no laws except
his laws. He decided who was given power and who was not. In his world,
he was God.

But as the Silk Road grew to become a billion-dollar business, achieving
the scale that Silicon Valley start-ups dream of, Ulbricht began to grow
more paranoid. He created fake identities for himself and worked on an
escape plan to Dominica, a small Caribbean island nation where he felt
he would be physically and financially safe. He kept most of his fortune
in Bitcoin, the digital currency, and there was also some cash hidden in
offshore bank accounts.

Ulbricht’s fear of being found out wasn’t hysterical. As early as June
2011, Adrian Chen, then a writer for Gawker, published a story on the
Silk Road, which prompted Senator Chuck Schumer to demand that the
Department of Justice take down the site. Subsequently, Ulbricht
required that people who worked for him scan their real driver’s
licenses or passports, to ensure they weren’t the “Feebs,” a nickname
that he and Variety Jones used to refer to the feds. He added strong
encryption to his computer. He started applying for citizenship in
countries that would hide him and his millions. (Dominica had the best
views.) He also created a checklist of what to do in the event that the
“Feebs” knocked on his door. (“Find place to live on craigslist for
cash; Create new identity.”) He bought fake IDs for himself on his Web
site.

Ulbricht had hoped that ordering the hit on Green would bring a certain
order to the Wild West that he had engineered. But it didn’t quite work
out that way. Things move fast in the technology business, and within a
few years the Silk Road had simply become ungovernable—it was growing
so rapidly that it became a more vulnerable target. Outside hackers
started knocking its servers off-line for ransom (anywhere from $10,000
to $100,000). Then others on the site became brazen and started trying
to blackmail Dread Pirate Roberts.

Within a short period, Curtis Green’s murder would go from an exception
to a playbook. Throughout early 2013, while tapping on his keyboard in
public libraries and coffee shops, Ulbricht would hire hit men to murder
drug dealers and hustlers who tried to steal from him. And while
Ulbricht may have been a talented coder and fledgling manager, he was
certainly not qualified to be running a criminal operation. The person
whom he had hired to murder Curtis Green in Utah, as it turned out, was
actually a D.E.A. agent. Green’s murder had been staged; a can of
Campbell’s soup, no less, was used for gory effect. The maneuver
provided the agency a powerful connection to its target, Dread Pirate
Roberts.

Yet the faux hit, in some ways, also underscored a larger problem facing
the Silk Road. Ulbricht wasn’t the only person vulnerable to his
newfound riches. The D.E.A. agent who staged the hit had learned how to
navigate the Silk Road so well during his research that he and an agent
from the Secret Service would end up stealing $1.5 million from the
site themselves. For all the wonderful promise that each new technology
affords, indeed, people rarely ever use it in the way it was intended.

Video: Debating the Tech Bubble and What Could Burst It

But Ulbricht’s fatal flaw would prove to be more prosaic. No matter how
many experienced hackers he had hired to tighten security on the Silk
Road, Ulbricht, like all programmers, made mistakes. Federal agents
would eventually seize upon, among other things, an early coding error
on the Silk Road that exposed the I.P. address of a coffee shop that
Ulbricht frequented in San Francisco. By that point, the F.B.I., the
I.R.S., the D.H.S., the D.O.J., and other agencies were all looking for
Ulbricht. The I.P. address led to other revealing clues in Ulbricht’s
early coding, which eventually pointed federal agents to a shaggy-haired
guy quietly working away at his laptop one afternoon, in October 2013,
in a library in the sleepy Glen Park area of San Francisco.

Ulbricht was found with tens of millions of dollars in Bitcoin on his
laptop. Millions more had been stashed on two thumb drives sitting on
his bedside table at the nearby apartment where he rented a room for
$1,200 a month. He had $2 in his pocket.

IV. Move Fast and Fix Things

Ulbricht is now in prison in New York City, awaiting the results of an
appeal of a double life sentence. He may be the most famous criminal in
the short history of the Internet, and perhaps, as Variety Jones warned,
the least likely American kingpin on record. But he is one nevertheless:
this may be what Pablo Escobar looks like in the Internet Age. Ulbricht
is currently housed in the same maximum-security New York City jail as
the world’s most famous drug lord, “El Chapo.”

When I started reporting Ulbricht’s story, I couldn’t understand how
someone had morphed so quickly and so much—and, frankly, in such an
evil manner. But the more people I spoke to, the more I read of
Ulbricht’s diaries—and chat logs and site comments, among other
things—the more I realized that he had devolved in the exact same way
as other tech entrepreneurs. The main difference was that he had chosen
drugs to disrupt, rather than taxis, hotels, dating, or friendship, and
that he had been held accountable for his decision to destroy other
people’s lives in order to protect his business, rather than being able
to look the other way, as so many successful tech C.E.O.’s do.

Those who support Ulbricht (and there are many) continue to argue that
he achieved his goal, showing how drugs sold legally can save lives and
make the world a better place. They have a point. In 2014, the year
before Ulbricht was
sentenced to life in prison, a group of university researchers concluded that the rise of online drug buying could create a safer environment for recreational usage, and subsequent studies have come to similar conclusions. Another study released in 2016 by the
Centers for Disease Control and Prevention, however, noted that easy
access to drugs had led to more deaths from heroin- and opioid-related
overdoses than from gun violence for the first time in American history.
The C.D.C.’s charts sure looked a lot like those that Variety Jones had
studied.

ULBRICHT BECAME A PABLO ESCOBAR FOR THE INTERNET AGE. HE WOULD LATER
SHARE A JAIL WITH MEXICAN DRUG LORD “EL CHAPO.”

Ulbricht had never imagined that his site would spawn all of these
evils; he truly believed he was making the world a better place with it.
I spoke to dozens of people who knew him through all phases of his life
and work, and they said he was kind, compassionate, and caring. He still
stopped to help old ladies across the street, surprised friends with
thoughtful gifts, and always used the word “fudge” instead of “fuck”
in e-mails and in conversations, even while he was running the site. But
Ulbricht changed as the Silk Road did. The line between what was right
and what was wrong got moved a little each day, until there was a chasm
between the two and it was impossible to know where Ross Ulbricht ended
and Dread Pirate Roberts began. If there was one thing that stood out,
it was Ulbricht’s inability to see how his creation was being used for
evil, even when he was the one committing the sin.

The generation that is building the technologies of tomorrow doesn’t
always think about how its creations can be manipulated in nefarious
ways. Driverless cars will surely free us up to nap or watch a movie on
our commutes, and they will likely reduce the number of automobile
fatalities each year. But why would North Korea or Iran build a nuclear
weapon when either can drive countless cars into one another at 100
miles per hour? The same terrorizing possibility is true for artificial
intelligence gone rogue, biotechnology research, and even the next
generation of social networks.

We have now reached an inflection point. In the Age of Trump, Silicon
Valley’s job is no longer to move fast and break things. Instead, it is
to consider how its technologies can be used for horrendous evil. Sadly,
Ross Ulbricht didn’t learn this until he was sentenced to spend the rest
of his life in prison.

Adapted from American Kingpin: The Epic Hunt for the Criminal Mastermind
Behind the Silk Road
, by Nick Bilton
, to be published this month by
Portfolio, an imprint of Penguin Publishing Group, a division of Penguin
Random House LLC; © 2017 by the author.

Full ScreenPhotos:Silicon Valley’s 14 Most Spectacular Failures

Andrew Mason, Groupon

Scorned as the “worst C.E.O. of 2012” by CNBC’s Herb Greenberg, Andrew Mason was at the helm of Groupon when the company went public, an I.P.O. Greenberg wrote off as the “most over-hyped . . . of recent years.” Years after going public, Groupon still has trouble turning a profit.

Photo: Photo-Illustration by Ben Park; From Bloomberg (Mason), Robert Kirk/Photodisc (Ticket), both from Getty Images.

Elizabeth Holmes, Theranos

Elizabeth Holmes became emblematic of Silicon Valley excess when her $9 billion blood-testing start-up, Theranos, became the subject of a series of Wall Street Journal investigations that reported that the company’s technology didn’t actually work. Theranos is currently under federal criminal investigation.

Photo: Photo-Illustration by Ben Park; By Adrianna Williams/The Image Bank (Needle), Andrew Burton (Holmes), both from Getty Images.

Parker Conrad, Zenefits

Zenefits C.E.O. and co-founder Parker Conrad resigned in 2016 amid concerns over questions about his $4.5 billion start-up’s regulatory compliance. Further reports insinuated Zenefits’ company culture under Conrad was more frat house than hackathon, complete with allegations of sex in the stairwells and plenty of drinking.

Photo: Photo-Illustration by Ben Park; By Steve Jennings (Conrad), Jack Andersen/DigitalVision (Beer), both from Getty Images.

Marissa Mayer, Yahoo

Hailed as the turnaround boss Yahoo so desperately needed when she was hired for the job in 2012, Marissa Mayer has come under fire as investors have lost their patience waiting for a miracle that never came. (The millions she reportedly spent on lavish parties and perks, while the ailing Internet giant circled the drain, didn’t help.) Yahoo is now up for sale.

Photo: Photo-Illustration by Ben Park; By Robyn Beck/AFP/Getty Images (Mayer).

Carly Fiorina, H.P.

When Carly Fiorina was let go from her six-year tenure as C.E.O. of Hewlett-Packard, the company’s stock jumped 10 percent upon the news of her firing. While she was C.E.O., Fiorina didn’t increase the company’s profits, and she actually decreased H.P.’s shareholders’ wealth by 52 percent. A disastrous merger with Compaq, which led her to fire some 30,000 employees, haunted Fiorina throughout her failed senate and presidential campaigns, too.

Photo: Digital Colorization by Ben Park; By Justin Sullivan/Getty Images. (Fiorina).

Jason Goldberg, Fab

E-commerce start-up Fab was once valued at $900 million, a near unicorn in Silicon Valley terms. But after allegedly burning through $200 million of its $336 million in venture capital, C.E.O. Jason Goldberg was forced to shutter its European arm and lay off two-thirds of its staff.

Photo: Photo-Illustration by Ben Park; By Anthony Harvey (Goldberg), Oli Scarff (Frame), both from Getty Images.

Gurbaksh Chahal, RadiumOne and Gravity4

Fired in 2014 from his ad-tech firm RadiumOne following a domestic-violence conviction, Gurbaksh Chahal founded a new company to compete with the one he was kicked out of. But Gravity4, his new firm, was sued for gender discrimination in 2015, though that case is still pending, and former employees have contemplated legal action against him.

Photo: Photo-Illustration By Ben Park; By Charley Gallay/Getty Images (Chahal).

Andrew Mason, Groupon

Andrew Mason, Groupon

Scorned as the “worst C.E.O. of 2012” by CNBC’s Herb Greenberg, Andrew Mason was at the helm of Groupon when the company went public, an I.P.O. Greenberg wrote off as the “most over-hyped . . . of recent years.” Years after going public, Groupon still has trouble turning a profit.

Photo-Illustration by Ben Park; From Bloomberg (Mason), Robert Kirk/Photodisc (Ticket), both from Getty Images.

Elizabeth Holmes, Theranos

Elizabeth Holmes, Theranos

Elizabeth Holmes became emblematic of Silicon Valley excess when her $9 billion blood-testing start-up, Theranos, became the subject of a series of Wall Street Journal investigations that reported that the company’s technology didn’t actually work. Theranos is currently under federal criminal investigation.

Photo-Illustration by Ben Park; By Adrianna Williams/The Image Bank (Needle), Andrew Burton (Holmes), both from Getty Images.

Parker Conrad, Zenefits

Parker Conrad, Zenefits

Zenefits C.E.O. and co-founder Parker Conrad resigned in 2016 amid concerns over questions about his $4.5 billion start-up’s regulatory compliance. Further reports insinuated Zenefits’ company culture under Conrad was more frat house than hackathon, complete with allegations of sex in the stairwells and plenty of drinking.

Photo-Illustration by Ben Park; By Steve Jennings (Conrad), Jack Andersen/DigitalVision (Beer), both from Getty Images.

Marissa Mayer, Yahoo

Marissa Mayer, Yahoo

Hailed as the turnaround boss Yahoo so desperately needed when she was hired for the job in 2012, Marissa Mayer has come under fire as investors have lost their patience waiting for a miracle that never came. (The millions she reportedly spent on lavish parties and perks, while the ailing Internet giant circled the drain, didn’t help.) Yahoo is now up for sale.

Photo-Illustration by Ben Park; By Robyn Beck/AFP/Getty Images (Mayer).

David Byttow, Secret

David Byttow, Secret

David Byttow, the founder of anonymous-posting app Secret, pivoted his year-old start-up to an incubator in 2015 after allegedly pocketing millions and buying a flashy Ferrari. Google Ventures investor Bill Maris later compared the start-up shutting down to a “bank heist.”

Photo-Illustration by Ben Park; By Car Culture (Ferrari), Heather Kennedy (Byttow), both from Getty Images.

Michelle Peluso, Gilt

Michelle Peluso, Gilt

Gilt Groupe, the once hot flash-sales start-up, was valued at $1 billion in 2011, having raised more than $286 million in funding since its founding. Five years later, Hudson’s Bay, the parent company of Saks Fifth Avenue, purchased it for $250 million in what CNN dubbed the “ultimate flash sale.”

Photo-Illustration by Ben Park; From Bloomberg Finance LP (Peluso), Rastem Grler (Sign), both from Getty Images.

Anthony Bay, Rdio

Anthony Bay, Rdio

Rdio filed for bankruptcy in 2015, showing just how hard it can be to make a viable streaming service. Rdio had raised $125 million in funding at a $500 million valuation. Pandora scooped up “many employees” from the failed start-up afterward, though its C.E.O. Anthony Bay did not join them.

Photo-Illustration by Ben Park; From Bloomberg Finance LP/Getty Images (Bay); From Alamy (Headphones).

Dan Wagner, Powa Technologies

Dan Wagner, Powa Technologies

C.E.O. Dan Wagner said that his company’s product, a glorified Q.R. scanner called PowaTag, was going to help Powa become “the greatest technology company of all time.” In February, $2.7 billion Powa shut down after struggling with its flagship product and, according to former employees, Wagner’s own hubris.

Photo-Illustration by Ben Park; From Bloomberg/Getty Images (Wagner).

Adora Cheung, Homejoy

Adora Cheung, Homejoy

On-demand cleaning start-up Homejoy shut down in 2015 after failing to hold onto its customers. C.E.O. Adora Cheung reportedly didn’t work to fix its retention rates, which flopped as a result of offering $19 flat-fee introductory deals. The “deciding factors” in Homejoy closing its doors, however, were the four lawsuits it faced from workers who claimed they’d been misclassified as contractors. The lawsuits were still pending as of last summer.

Photo-Illustration by Ben Park; By Anthony Harvey (Cheung), Tim Macpherson/Cultura (House), both from Getty Images.

Ben Kaufman, Quirky

Ben Kaufman, Quirky

Quirky, a start-up that sought to crowdsource inventions to the masses, filed for bankruptcy in September 2015. Quirky struggled to raise funding and C.E.O. Ben Kaufman stepped down a month before his company folded. Quirky sold Wink, its software business, to Flextronics for $15 million.

Photo-Illustration by Ben Park; By Larry Busacca/Getty images (Kaufman).

Scott Thompson, Yahoo

Scott Thompson, Yahoo

Scott Thompson served as C.E.O. of Yahoo before the company hired Marissa Mayer. Months after Thompson was hired to the job, vocal activist investor Dan Loeb sent Yahoo’s board a letter questioning Thompson’s credentials and wondering if perhaps Thompson had “embellished his academic credentials.” Thompson was immediately replaced with Ross Levinsohn, after the board discovered Thompson had falsely added a computer-science degree to his résumé.

Photo-Illustration by Ben Park; By Jo Foord (Kindersley), from Bloomberg (Thompson), both from Getty Images.

Carly Fiorina, H.P.

Carly Fiorina, H.P.

When Carly Fiorina was let go from her six-year tenure as C.E.O. of Hewlett-Packard, the company’s stock jumped 10 percent upon the news of her firing. While she was C.E.O., Fiorina didn’t increase the company’s profits, and she actually decreased H.P.’s shareholders’ wealth by 52 percent. A disastrous merger with Compaq, which led her to fire some 30,000 employees, haunted Fiorina throughout her failed senate and presidential campaigns, too.

Digital Colorization by Ben Park; By Justin Sullivan/Getty Images. (Fiorina).

Jason Goldberg, Fab

Jason Goldberg, Fab

E-commerce start-up Fab was once valued at $900 million, a near unicorn in Silicon Valley terms. But after allegedly burning through $200 million of its $336 million in venture capital, C.E.O. Jason Goldberg was forced to shutter its European arm and lay off two-thirds of its staff.

Photo-Illustration by Ben Park; By Anthony Harvey (Goldberg), Oli Scarff (Frame), both from Getty Images.

Gurbaksh Chahal, RadiumOne and Gravity4

Gurbaksh Chahal, RadiumOne and Gravity4

Fired in 2014 from his ad-tech firm RadiumOne following a domestic-violence conviction, Gurbaksh Chahal founded a new company to compete with the one he was kicked out of. But Gravity4, his new firm, was sued for gender discrimination in 2015, though that case is still pending, and former employees have contemplated legal action against him.

Photo-Illustration By Ben Park; By Charley Gallay/Getty Images (Chahal).


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