Introduction to Bitwise Industries

In December 2024, Tim Sheehan and Robert Rodriguez unveil the first episode of their podcast series, "Bitwise & Betrayal: Inside the Fraud Scandal that Shook Fresno." Titled "Bitwise's Best Intentions, Highest Hopes," the episode delves into the rise and dramatic fall of Bitwise Industries, a tech incubator that promised to transform Fresno's economic landscape.

Founders and Vision

Bitwise Industries was founded in 2013 by Jake Soberall and Irma Olguin Jr., two Central California entrepreneurs with a mission to cultivate a thriving technology community in Fresno. Their goals were twofold: to retain local intellectual talent and to enhance diversity, equity, and inclusion within the tech sector.

Jake Soberall (00:25): "Bitwise is a tech ecosystem that activates human potential to lift up underdog cities around the country."

Irma Olguin Jr. (00:55): "We have a lot of underserved and overlooked talent in the heart of the state... [Bitwise] help us rebuild this economy as anyone else."

Jake, a Clovis high school graduate with degrees in history, political science, and law, partnered with Irma, who hailed from a farming town and became the first in her family to attend college. Together, they envisioned Bitwise as a catalyst for economic and social change in Fresno and beyond.

Community Impact and Expansion

Bitwise quickly became a beacon of hope in Fresno, a region dominated by low-wage industries like agriculture and hospitality. The company aimed to diversify the local economy by providing technology training and fostering startups. Over the years, Bitwise expanded its reach to cities like Bakersfield, Merced, Oakland, and Toledo, creating hundreds of jobs and nurturing over 200 technology companies.

Jake Soberall (02:21): "Bitwise Industries is a technology ecosystem designed to make it possible for cities like Fresno and Bakersfield Field to participate in the opportunity that exists in the technology industry."

Irma Olguin Jr. (07:19): "90% or more of the folks who come through our programs stay in their hometowns... [This] injects dollars into the local community and tax base."

The founders emphasized that their initiatives would keep talent within Fresno, fostering economic growth and community development. Jen Garab’s story exemplifies Bitwise’s impact, illustrating how the company provided opportunities for individuals to pivot careers and contribute meaningfully to their hometown.

Business Operations and Growth

Bitwise's strategy included not only training individuals through Geekwise Academy but also developing infrastructure for tech startups. The partnership with local developer Will Dyck to rehabilitate historic buildings in downtown Fresno was a significant move to create a Silicon Valley-like environment in the region.

Damon Thomas (05:21): "The Bitwise group in their infancy had purchased a building at 700 Van Ness... we ultimately delivered that building about three years later and about six and a half million dollars later."

Bitwise fostered a collaborative environment where tech entrepreneurs could share ideas and best practices. Kurlyn Phipps highlighted the community’s natural formation and the supportive atmosphere that Bitwise cultivated.

Kurlyn Phipps (16:30): "People felt like they belonged and they were a part of it... It was really beautiful to be around all of the other companies that were in there."

Collapse and Criminal Charges

Despite its outward success, Bitwise began showing signs of internal turmoil. The company went through multiple chief financial officers and faced financial difficulties, including a delinquency notice on personal property taxes in fall 2020. Promised job placements for apprentices failed to materialize, raising suspicions among employees.

In January 2022, Bitwise made headlines by announcing the furlough of its entire workforce, affecting hundreds of employees and leaving investors and lenders owed tens of millions of dollars. Following this abrupt collapse, federal criminal charges were filed against the founders.

Tim Sheehan (01:26): "Today, my office is announcing the filing of federal criminal charges alleging that Ms. Kurlyn Phipps and Mr. Soberall... conspired to commit wire fraud."

Employee Experiences and Class Action Lawsuit

The fallout from Bitwise’s collapse was profound. Employees like Jengara Guerra shared experiences of being promised employment that never materialized, despite Bitwise's public image of thriving success.

Jengara Guerra (14:42): "I always wondered, how are they making money? Like, during COVID I mean, honestly, everybody's, like, going out of business and they're thriving."

Attorney Roger Bonachter filed a class action lawsuit on behalf of 100 furloughed workers, highlighting the enigmatic and unsustainable business operations of Bitwise.

Roger Bonachter (23:18): "It seems that they wanted a sense of religiosity, a sense of being a part of some grandiose movement... something I've never experienced representing employees or employers in my career."

Bonachter criticized the company for creating a cult-like environment, where employees were expected to be wholly invested in Bitwise’s mission without transparency or accountability.

Concluding Remarks

The episode paints a comprehensive picture of Bitwise Industries’ ambitious beginnings, its significant impact on Fresno’s tech landscape, and the eventual unraveling that led to financial collapse and legal consequences for its founders. Through interviews, firsthand accounts, and investigative reporting, "Bitwise & Betrayal" sheds light on the complexities and challenges of fostering a tech ecosystem in an underserved region, ultimately serving as a cautionary tale about ambition, accountability, and the fine line between visionary leadership and fraudulent practices.

Notable Quotes with Timestamps

• Jake Soberall (02:21): "Bitwise Industries is a technology ecosystem designed to make it possible for cities like Fresno and Bakersfield Field to participate in the opportunity that exists in the technology industry."

• Irma Olguin Jr. (07:19): "90% or more of the folks who come through our programs stay in their hometowns... [This] injects dollars into the local community and tax base."

• Kurlyn Phipps (16:30): "People felt like they belonged and they were a part of it... It was really beautiful to be around all of the other companies that were in there."

• Roger Bonachter (23:18): "It seems that they wanted a sense of religiosity, a sense of being a part of some grandiose movement... something I've never experienced representing employees or employers in my career."

Final Thoughts

For anyone interested in the intersection of technology, community development, and business ethics, "Bitwise & Betrayal: Inside the Fraud Scandal that Shook Fresno" offers an in-depth exploration of how good intentions can sometimes lead to unforeseen consequences. The first episode sets the stage for a gripping narrative that promises to uncover the layers of ambition, betrayal, and the quest for success within Bitwise Industries.