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Growing up with that last name, do you feel any pressure? I imagine it's quite a lot of pressure to live up to a surname like Gates. For me, yes, I feel this pressure 100%, but it's a real privilege to feel that, right? I think I would be so bored if I didn't feel like I had something to do or a purpose. And I'm so lucky that thanks to my parents, I can focus on what I care about and what I really want to do. It was Phoebe Gates, daughter of Bill Gates, who spoke about the pressures of living with that last name. So that she would not be considered a typical "connected kid " who does nothing but is secured for life, Phoebe decided to create something of her own.
She really created it, but things do n't go according to plan. Phoebe Gates's most famous project was Fia-a platform she created with her Stanford roommate, Sophia Kiani. It was positioned as a free AI-powered shopping tool that compares prices and promises that you will never overpay. So, that was the idea. Launched in April 2025, the project raised $43.5 million with half a million downloads and was named the best invention of 2025 by Time magazine. By the beginning of 2026, the company's valuation had increased to $185 million. For Phoebe Gates, it was proof that she could build something on her own. As she herself said, and I quote: " Nothing to do with my privileges or my last name." Then, in July 2026, Bloomberg tested the
Fia browser extension on over 50 websites. It turned out to be doing something very suspicious and potentially very illegal. We found that if you have the Fia extension installed on your mobile browser, it automatically runs in the background as soon as you add an item to your cart on partner sites, even if you are not interacting with the It took credit for itself and received money for sales it did not make. Next, for Phoebe Gates, the story took a turn for the worse with more devastating revelations and potentially serious legal consequences. And this is not just some minor mistake.
The maximum sentence is 20 years in prison if convicted. Honey is currently being sued in federal court for similar actions, but more on that later in the episode. So, today we will look at the reports that detail exactly what happened at Fear, how the scheme worked, and what Ms. Gates is accused of. the youngest of Bill and Melinda Gates' three children. Having the last name Gates is probably pretty strange, if you think about it. Everyone knows your father's name, of course, because he was once the richest man in the world. However, in the 1980s and early 1990s, he was disliked for his dodgy business practices. And in the 2020s, he began to be hated for something more serious. But let's not get distracted. By the 2000s, your father had become a neutral
figure, perceived as the market leader of the late 20th century computer boom. The father you grew up with is from this era. At home, as far as we could tell, everything was like that of ordinary people. You did housework, smartphones were banned at the dinner table or until the age of 14. Even though you were about to inherit $10 million and were n't allowed to tell your friends that you were flying on a private jet. But overall, so far so good. However, as you got older, you started to get quite annoyed that people judged you as a lazy " incompetent" before you even opened your mouth. What better way to mitigate this than to create something of your own? So that's exactly what Phoebe Gates did.
She entered Stanford to make it happen, and from the first week she felt the weight of her last name. I felt so insecure and so strongly wanted to prove myself at Stanford. I came and thought: I have so many privileges, I am a "non-child." I had such intense insecurities about it. Her parents told her they would n't let her drop out of school and start a company. Phoebe found this ironic, considering that her father had once done just that at Harvard. However, she finished the job and graduated in 2024. She received a degree that was extremely "relevant" to creating an AI-based online shopping tool- human biology. Whatever the case, while she was at Stanford, let's say, there were certain signs.
Phoebe signed up for an unofficial course called "Think You Can Rule the World? ". It wasn't in the course catalog. You could only get into it by recommendation. I'm sure her last name had nothing to do with gaining this access. Former students say that the course taught them how to identify loopholes in power structures and how to get their way within the system. Phoebe later used this network to hire some of her first employees. Choosing people from this particular class will obviously have no consequences in the future. But as a secondary point, the fact that this course exists at one of the most prestigious universities in the world confirms what most of us feel. It's almost as if
controlling people and manipulating systems is such a common path to elite status that there's a separate training course on the subject. So, in the dorm, Phoebe and her randomly chosen roommate, Sophia Kiani, constantly faced the same problem. They would find a dress they liked online and then spend a lot of time trying to figure out if they could buy it cheaper elsewhere or secondhand. Then they thought: why isn't there a tool that does all this for you? As for the two of us, we actually met as random neighbors at Stanford. We were those girls who spent hours shopping on different sites, looking for the best deal on used items and trying to figure out if that item was worth adding to our wardrobe. And as we saw every niche completely taken over by
specialized agents, whether it was customer service or programming, there was a sense of a huge void in terms of what we were actually buying. And why does n't everyone have a personal shopper in their pocket? Because we spend so much money on unnecessary things. So, that was the problem they were trying to solve. Next, we'll see how this Stanford duo created the app. Then we'll see how they got into trouble. But first, this video is sponsored by Raycon. It's October, which means it's officially Raycon month. And since I've been using Raycon products for quite some time now, one of the products I've been using recently is their everyday clip-on headphones.
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Thank you Raycon for supporting Cold Fusion. Now let's get back to the episode. So, where did we stop? Oh, exactly. Phoebe and Sophia just came up with the idea in their dorm to create something that would help them find dresses easier and cheaper. However, turning this into a real product took longer than expected. They both spent months creating a desktop-only version, which Phoebe later admitted was a waste of time. When we first developed this, we were explicitly developing it for desktop only. And we spent many months building and refining this, smoothing out pixels and making everything look good, which now, looking back, was a complete waste of time.
They eventually changed course and launched a mobile app and browser extension in April 2025. By the way, the name is simply a combination of Phi and Sophia. So, how exactly does this work? Let's say you're looking at a dress for $200 on a retailer's website. Fia scans 40,000 stores in real time and then suggests whether the same dress is available on a resale platform for half the price. Or it finds a discount code and automatically applies it during checkout. When a purchase was made on the recommendation of Fia, the company received a small commission from the seller. Essentially, it was affiliate marketing. Now, browser extensions that search for coupons are nothing new. But what Fia offered was more focused on fashion and sustainability.
The company said it has created one of the largest databases of used items in the United States. Over 350 million products collected from resale platforms. In addition to the price, the app could show you the residual value of the item. Here's co-founder Sophia Kiani explaining it. First, we have integrated over 150 second-hand goods sales platforms into Fia. Our own search database contains over 350 million items, making it one of the largest databases of used items in the US. And we also now show people the residual value of the item they are about to purchase. So if you're looking at a $500 handbag on Fia, you can quickly figure out if you can resell it for $300 or $400? Or conversely, if it's a mass-market item and you buy it for 100 bucks, does
it resell for only 10 dollars? Does it instantly depreciate and lose 90% of its value? And we really want to encourage people to make more conscious choices, to buy things that they actually want, that they will enjoy, and that are truly better quality products. Honestly, the idea itself is pretty good. At least, investors found this proposal compelling. In September 2025, Fia raised $8 million in a seed funding round led by Kleiner Perkins. Then 35 million in January 2026. This round was supported by Coatue Ventures. This raised the company's valuation to 185 million. Along with venture capitalists, star investors also came. So, things were going great. And then they stopped going so well. Bloomberg started asking questions. They
decided to take a look behind the scenes. Before we get to what Bloomberg discovered, there is a term that is central to this entire story. This term is called ", because it is the key to everything that comes next. When you buy something online, the retailer wants to know who sent you there. If a coupon site or YouTuber helped you find this product, that referrer receives a small commission. Retailers track this activity using cookies -tiny pieces of data that are placed in your browser when you click on a referral link. You click, the cookie is set, and the referrer gets paid. Quite simple. But cookie stuffing is when another company steps in and
places that cookie in your browser without you ever clicking on their link. You could have found the retailer yourself or gotten there thanks to a YouTuber, but when cookie stuffing happens, the outside company that intervened takes credit and collects a commission. Moreover, the retailer is paying for engagement that didn't actually happen. The worst part is that whoever actually secured that sale gets a big, fat "nothing." And that's exactly what Bloomberg set out to check. They tested the Fee extension on over 50 retail websites. With them was Ben Edelman, a former Harvard Business School professor and one of the most respected researchers into affiliate marketing fraud. A competing tool called Capital One Shopping
also conducted its own analysis. They all discovered the same thing. Fee was inserting its own cookie into transactions it had no involvement in and taking credit for them. This was done by three separate functions. The first feature opened a hidden tab in the background during checkout and inserted the Fee referral code instead of the one that actually referred the buyer to the site. The second feature activated a cookie whenever the user clicked anywhere on the page after the Fee popup appeared, even if they tried to close it. And the third function was called a passive trigger.
It updated the cookie Fee every 2 hours on any site where the extension was active, even if another partner had already earned a referral reward at that time. The Fia code simply overwrote it. Seeing all this, Bloomberg, of course, had questions, and on July 7, they reached out to the company. The same day, Fia disabled these features. The company responded that it learned about the problem, and I quote, " within the last 24 hours." They said they had been working hard all night to fix what they called a bug in the code. However, this explanation did not seem convincing. impact.com is an affiliate network that distributes commissions to companies like Fia. Upon learning of this, they suspected something was wrong. They
suspended the startup from their trading platform. For Fia, the official version was that it was just a bug. They discovered this bug and fixed it within a day. The case is closed. Except that Bloomberg kept digging. What they found a month later was much more serious. On August 11, Bloomberg published its next investigation. Now it looked really bad. This was something Fia couldn't just explain. Bloomberg obtained a screenshot of the internal control panel. They did not publish the image, but described what it showed. What Fia called a bug was actually a feature called " enable automatic coupon reset". It had a switch that could be turned on and off remotely. It was turned on
December 10, 2025, and operated for 209 days, only shutting down on July 7, 2026-the same day Bloomberg first contacted the company. So, to be clear, according to Bloomberg, this worked throughout the holiday shopping season, during a $35 million fundraising round in 2026, and during the months of revenue growth they reported to investors. Now let's move on to the most suspicious part, in the style of " there's no smoke without fire" - these are internal messages in Slack. People inside the company, who wished to remain anonymous, shared these conversations with Bloomberg. On December 18, Phoebe Gates wrote to her technical team.
She was concerned that Fia wasn't getting enough commission from Etsy. Her message was, and I quote: " can you confirm that the automatic cookie-drop popup works on all coupon sites so we can monetize all GMV? ". "End of quote." She adds, and I quote: " But despite everything, we have to record every transaction if the cookie setting worked." " End of quote." But it wasn't just Phoebe. In another correspondence, Sofia Kiyani reportedly insisted on yet another cookie feature. When the engineer warned that this would violate Google Chrome's extension policy, Kiani suggested rewording it and The engineer noted that the passive trigger was already updating cookies every 2 hours. According to Bloomberg, Kiani
encouraged the team to continue installing cookies despite everything. When Fe disabled these features on July 7 after they were allegedly exposed by Bloomberg, average daily revenue fell from around $80,000 to between $10,000 and $28,000 Cookie filling provided a significant portion of Fe's income. Fe now says that part of this drop was due to the disabling of various monetization features to ensure It seems that most of their income came from cookie stuffing. Data scientist Fe estimated that cookie filling provided approximately 51% of the value of the goods the company claimed in June. Fe said that this figure is incorrect, but in any case, the collapse in revenue speaks for itself. Fe released a statement saying that features have been removed,
transactions will be canceled, and they are hiring someone for a new position that didn't exist before- head of compliance. They also said they would draw conclusions from this experience. However, they did not comment on the Slack message. : Where does this leave Phoebe Gates and Sophia Kiani? No formal charges have been filed against them, so we will have to wait for an official investigation. However, if convicted, corporate lawyer Arielle Givner wrote in X that cookie stuffing is typically classified in US courts as federal wire fraud, with a maximum penalty of up to 20 years in prison. But, of course, most experts doubt that such a scenario is possible. The reason is that prosecutors would have to prove intentional intent to defraud, not
just corporate oversight. Although, if that's true, these messages in Slack don't look very good. Cookie stuffing is not new, and it has a legal history. In 2014, a man named Sean Hogan, who ran one of eBay's largest affiliate programs, pleaded guilty to wire fraud for essentially the same actions. He received 5 months in federal prison and a $25,000 fine. His colleague, Brian Dunning, received 15 months. But there have been other cases, like Honey- another browser extension that has been accused of something similar. It was bought by PayPal for $4 billion and is now facing class action lawsuits. And finally, we move on to Honey. This story was recently heard. PayPal acquired them for $4 billion, and they are now the subject of a federal
class action lawsuit for the same practices as Sphere: hidden tabs, cookie spoofing, and other questionable practices. These coincidences make you think. The Honey case is currently in the evidence discovery stage. As for Phoebe Gates, she was last seen in August, stepping out of a helicopter in New York wearing a Sphere-emblazoned jumper. Oh well, at least she still believes in the brand. Phoebe Gates was trying to prove that she could build something on her own terms, regardless of her famous last name. And for a while it seemed like she succeeded. The product was real, and the idea was really good. But in the real world, investors want
returns, and the pressure of growth has forced her and Sphere to make some compromises. Slack messages showed that both founders knew exactly what was driving a significant portion of the growth and decided not to stop it. Whether this will end in a lawsuit, a settlement, or something worse-time will tell. However, it is already clear that the image that Phoebe carefully built for a year has been seriously damaged, and it is likely that she has taken on too much. After her father cast a shadow over the Gates name, this could be another item on the list. So, what do you think? Do you think the court will be lenient or does she really face imprisonment? Let us know what you think in the comments section below.
Anyway, that's all from me. I hope you enjoyed it. My name is Dagogo, you watched Coldfusion, and we'll see you again in the next episode. Bye, guys. Have a nice day. Coldfusion. This is intuitive thinking.
