Yet another reason the tech world should actually embrace whistleblowers

Knowing the truth could have saved them soooo much money.

Here’s another bonkers tech story that almost feels too ridiculous to be real: Builder.ai, a London-based company who said its AI “Natasha” could independently build apps at record speed, has filed for insolvency. The bankruptcy was swiftly followed by—and this is a new one—reports that Natasha was actually 700 engineers in India. (Feeling some false hope that we will all be employed next year, I guess??)

The company was valued at $1.5 billion and had been carrying on the practice for eight years. EIGHT! Eight.

Sorry to Microsoft, which made an equity investment of millions upon millions of dollars to buy a stake in the company under the assumption that Builder.ai had developed revolutionary new AI capabilities.

The whole pretending-your-700-employees-are-actually-an-AI-named-Natasha is a novel twist, but in ways the story is starting to feel familiar: tech company allegedly defrauds potential acquirers and/or shareholders for years; fraud is eventually discovered; company declares bankruptcy; and shareholders are out of hundreds of millions of dollars. Whoops! Sorry!

Consider Frank, the startup aimed at making it easier for students to apply for financial aid. Founder Charlie Javice was convicted of defrauding JPMorgan Chase out of $175 million after inflating the number of her users by, oh, three million.

Another cautionary tale is Autonomy, which was acquired by HP for $11.1 billion only to then have reports surface that the company was covering up major accounting fraud. It was almost immediately devalued by $8.8 billion. But years before the financially catastrophic acquisition (and the dramatic yacht sinking), a whistleblower inside the company had been trying to alert people to anomalies and transactions that he believed didn’t add up. In the end, Autonomy’s tech mogul CEO Mike Lynch and his cofounder were acquitted in federal court in San Francisco of criminal fraud charges. By that point, HP had long sold off Autonomy’s assets, but the company says it lost over $4 billion as a consequence of the acquisition.

You know how some of these many billions of dollars might have not been flushed down the toilet? Whistleblowers. If insiders had pathways to speak out about what they were seeing without getting gaslit, silenced, or fired (which basically happens to most of them), it’s more than just the shareholders who might be spared. It’s the companies themselves—and the hundreds of employees who work there. And the public.

On that note, let’s look at another story of what was going inside a company, except this time whistleblowers found a way to get the info out. Theranos promised incredible scientific innovation—a blood test that could test for multiple conditions by using only a single drop of blood. A feat which, sadly, it was not actually capable of accomplishing. But only a handful of people knew this. The company operated on false pretenses for more than a decade, and it administered its faulty and misleading blood tests to innocent people for three years. But thanks to whistleblowers Erika Cheung and Tyler Shultz, who spent several years trying to alert people both inside and outside the company that the tests did not work, the harm did not continue unchecked. Thousands of lives were potentially saved.

But if there had been a better and more efficient way for Cheung and Shultz to speak out, the harm would have been contained sooner—before people actually started using the faulty blood tests. And, who knows, if the company hadn’t gotten dragged down by Theranos’s years-long effort to cover up her fraud, the company may have actually been able to succeed at its mission. And yes, make zillions of dollars.

So we’ll say it again: Creating a safe space for people to speak out—within their companies and outside of them—would be good for everyone. Tech companies and Natashas included.