First, let’s define sociopathy, at least for the purposes of this conversation: an absence of empathy—or simply an absence of giving a damn—about the human consequences of your actions.
I wish that were hyperbole or a joke.
The story I’m about to share happened months ago. Unfortunately, its parameters are something that I’ve seen repeated over the years. I’ve wrestled with whether to make it public, and how much to disclose. The Pulley implosion this week made up my mind.
This spring, I was pitched an angel investment in a platform serving a vulnerable population: families caring for people with disabilities.
The company helped families navigate the byzantine financial and compliance rules required to preserve eligibility for disability benefits. There was one important wrinkle: to use the platform, families placed financial assets associated with their disabled loved one into the platform’s custody.
Eight thousand families had done so.
My first diligence step after receiving the deck was to send it to a longtime friend who runs a rehabilitation clinic in NYC helping newly disabled spinal-cord-injury survivors re-enter everyday life.
He is normally demure about the startup projects I send him. He is understandably protective of his tribe and access to them.
This time, he was ecstatic.
Was this something he could start sharing with patients immediately? His social worker spends enormous amounts of time helping families navigate exactly this kind of paperwork. If the platform actually worked, it could remove a major ongoing burden from both his staff and the families they served.
I asked the founder for data-room access. I also sent the company to my friend and fellow angel investor, who I knew would be similarly excited about backing something built to help people with disabilities.
Then we started digging.
I’m not going to disclose everything he and I found. But four things matter:
The business model would not be profitable at any scale.
The apparent plan was to keep raising successive venture rounds to finance growth in enrolled families and a relatively small pool of assets under management. The handwavy hope was that those pooled families and assets would eventually be worth an acquisition by a fintech or bank.
The company had three months of runway remaining.
There was no contingency plan for supporting those 8,000 families if the company shut down.
Our enthusiasm turned to simmering rage.
This wasn’t a dating app or a B2B workflow tool. These were vulnerable people whose ability to retain disability benefits depended on financial and administrative arrangements they had entrusted to this company.
And the central problem wasn’t some unforeseeable black swan. The basic mismatch between the business model, the capital requirements, and the responsibility the company was assuming for its users was knowable at the whiteboard stage.
So we asked the CEO what his plan for any of the above was.
And somehow, the story got worse.
The CEO was a recent graduate student who had effectively been handed this mess two months prior. The original founders—the people who had designed the model, raised the first tranche of money, and enrolled thousands of vulnerable families into it—were no longer involved.
He seemed genuinely surprised that we would ask questions as silly as “what happens to these families if you shut down?” Rather than digging in on his slide deck full of charts going up and to the right.
Here’s the thing I want founders to take away from this.
If you develop a platform or service that becomes essential to someone’s healthcare or well-being, you are likely replacing supports that were already in place.
Someone stops doing something because you now do it. A social worker stops helping with the paperwork. A family stops managing something themselves. A clinician starts relying on your system.
That’s what we want our companies to do. We want people to depend on the things we build.
But if you choose not to design for viability, or you choose to run the company without sufficient runway, then you absolutely have to consider what happens when the services you’ve put in place get withdrawn.
Not when you’re down to three months of cash. Not when the next round falls apart.
When you design the damn thing.
Please, please, please don’t be a sociopath.
This is basic math. These are real humans and real lives.
If you choose to build something people come to depend on, you have a responsibility to do the work to understand what happens to them if it goes away.
P.S. The company’s website is still up. There are no current team members that I can find. The CEO is still the CEO but now lists a different full-time job.
I have no idea what happened to the 8,000 families who were using the platform to manage assets for their disabled loved ones.
In healthtech, the human consequence is not an abstract ethical layer added after the business model. It is the business model. If the product only works by making someone else's care or work worse, the numbers are hiding the cost.