Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors(arstechnica.com)
arstechnica.com
Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors
https://arstechnica.com/tech-policy/2021/09/elizabeth-holmes-urged-employees-to-hide-theranos-lab-equipment-from-inspectors/
263 comments
A dead giveaway for throwaway board seats: Nobel Prize winners, generals, politicians. Another: “professional board members” who sit on multiple boards but have never had senior executive roles involving profit and loss.
These people may be accomplished in their own right, but they know little about business. They are there for lunch, the fat fee, and to pose.
And when a big company has a NUMBER of these types, i.e. two or more, they have an authoritarian/secrecy problem.
These people may be accomplished in their own right, but they know little about business. They are there for lunch, the fat fee, and to pose.
And when a big company has a NUMBER of these types, i.e. two or more, they have an authoritarian/secrecy problem.
> “professional board members” who sit on multiple boards but have never had senior executive roles involving profit and loss
How do they get to this position without having been senior execs?
How do they get to this position without having been senior execs?
Mattis, for example, had a relationship with the company while he was still working in government and had explicit communication with them telling them he wanted to help them get their product into the military.
Getting hired onto the board 18 months after retiring from government (possibly the delay was due to being distracted by getting onto military contractor General Dynamics' board) is the other half of the back scratching arrangement that powers the corporate-political machine that rules the country.
As to how they found him in the first place, presumably friends of friends of parents, their siblings, husbands, wives, etc. Her parents were in political circles in DC, they were good friends with CIA agents, father was an Enron VP, mother was a legislative director for some congressman. It's all very incestual in Washinton, kind of like old royalty.
Getting hired onto the board 18 months after retiring from government (possibly the delay was due to being distracted by getting onto military contractor General Dynamics' board) is the other half of the back scratching arrangement that powers the corporate-political machine that rules the country.
As to how they found him in the first place, presumably friends of friends of parents, their siblings, husbands, wives, etc. Her parents were in political circles in DC, they were good friends with CIA agents, father was an Enron VP, mother was a legislative director for some congressman. It's all very incestual in Washinton, kind of like old royalty.
A Stanford grad enters Harvard Business School after a year of “working” in Silicon Valley. After HBS, she joins an SV VC firm, never makes partner or does her own deals, but hangs on long enough to credibly assert a career in “venture capital” to those in mature industries who don’t know how to vet such a career. Excellent social skills with a unique ability to convey agreeability: a yes girl with flair. On two major boards.
I believe these people generally get asked to join company boards due to their network. In a way these people function as lobbyists of the company.
I too thought about the counterfactual in which that if their technology actually worked, COVID testing could have been have been done at scale in the US.
Isn't COVID testing being done at scale in many countries right now? I'm in Canada and I can go to a free drive through test station without appointment and get about a 24-hour turnaround on results, and that's been the case for over a year.
yes, but it was not happening in March 2020 in the US for a variety of reasons.
There are companies (at least one anyway) that make rapid testing panels that include COVID, plus a dozen plus other respiratory diseases, in a single test that is profitable at $200 and costs $20 in consumables. I heard that they disabled all the other tests so they could get approved as a COVID test sooner, or something like that. The problem is you can't ask for such a test as a patient, hospital billing departments make the news for charging insurance $$$$ for each individual pathogen on the test, and doctors come out of the woodwork to say how negligent and irresponsible it is to test for so many things at once, as if it's literally impossible to take base rates into account when you do more than one test.
If the regulators get out of the way it would be great to make these available direct to consumer with an app companion, and the consumer can share the results with their physician.
Something tells me that if the regulators got out of the way, we would have dozens of Covid tests available, half of which would work better than a coin toss.
Millions and millions, millions of tests per day could be available today, except that the FDA is sitting on the applications, many of which I’ve looked at. And the applications are stellar. There’s absolutely no reason for an inexpensive three- or four-dollar test to be being outright rejected by the FDA right now or just sitting in a queue for many months. It’s no longer a normal time at the FDA, they’re being held up there for unknown reasons.
Coronavirus (COVID-19): Press Conference with Michael Mina, 02/24/21
https://www.hsph.harvard.edu/news/features/coronavirus-covid...
Coronavirus (COVID-19): Press Conference with Michael Mina, 02/24/21
https://www.hsph.harvard.edu/news/features/coronavirus-covid...
If we could mail a free test and free mask to every registered USPS address once a week we could end the pandemic if people who are anti-vax are not anti-test.
The problem is that successful startups often start out claiming that which is impossible.
Uber was impossible, because it was illegal.
Amazon was impossible, as you couldn't pack and ship stuff that cheaply.
Personal computers were at one point considered ludicrous.
Uber was impossible, because it was illegal.
Amazon was impossible, as you couldn't pack and ship stuff that cheaply.
Personal computers were at one point considered ludicrous.
This is the SV “fake it ‘till you make it” culture. Right now Tesla is delivering “full self driving” cars that require a human driver at all times. Experts have said that it’s not possible using cameras alone, without LiDAR.
Oversell and underdeliver. Fraud works great until it doesn’t.
Oversell and underdeliver. Fraud works great until it doesn’t.
I mean, we can go the other way by looking at SpaceX. I spent years reading detailed reports from experts that everything SpaceX was doing was impossible.
-A rocket made of steel
-Landing a rocket anywhere
-Landing a bigger rocket anywhere
-Landing a rocket on solid ground
-Landing a big rocket on the ground
and a lot of smaller things in between.
I read many plausible looking reports on the non-feasability of these things often came with the backing of professors at respected universities and they were all wrong.
Sometimes it goes the other way.
-A rocket made of steel
-Landing a rocket anywhere
-Landing a bigger rocket anywhere
-Landing a rocket on solid ground
-Landing a big rocket on the ground
and a lot of smaller things in between.
I read many plausible looking reports on the non-feasability of these things often came with the backing of professors at respected universities and they were all wrong.
Sometimes it goes the other way.
For the risk of being a broken record, nobody claimed that reusable rockets were technically impossible. The argument was that they were rather financially unfeasible due to a limited number of LEO launches, so nobody tried (I lost the ESA study on this from the early 2000s unfortunately...).
I'd really love that myth of SpaceX doing the impossible with landing rockets to die. Also because they don't have to, they were the first to do so. That alone is really impressive. Whether or not it is profitable is impossible to tell until SpaceX is publishing audited financials.
I'd really love that myth of SpaceX doing the impossible with landing rockets to die. Also because they don't have to, they were the first to do so. That alone is really impressive. Whether or not it is profitable is impossible to tell until SpaceX is publishing audited financials.
Also I have to point out that although SpaceX has very competitive prices for market contracts there seems to be a different services and pricing scheme for government contracts.
This is not unique in the industry to some extent but since SpaceX has no published audits competitors claim they overcharge the government.
This is not unique in the industry to some extent but since SpaceX has no published audits competitors claim they overcharge the government.
It should be noted that the DC-X rocket also landed propulsively in the 90's. https://en.wikipedia.org/wiki/McDonnell_Douglas_DC-X
I don't disagree. It's a good thing that people are confident that they can achieve things that others deem impossible, especially experts. That's real progress. The part that starts to cross the line is when someone starts making legally significant promises ahead of schedule.
Tell stakeholders you're working on it. Tell them you're ahead of everyone else. Tell them that the experts are wrong. Tell them it's coming very soon. Update them on the details of your progress. Don't tell them it's done when it's not.
Tell stakeholders you're working on it. Tell them you're ahead of everyone else. Tell them that the experts are wrong. Tell them it's coming very soon. Update them on the details of your progress. Don't tell them it's done when it's not.
There were definitely no rocket experts claiming rockets can't be made out of steel. That's not a new thing.
Isn't the self-driving just a feature on top of the car? They're faking one feature that a customer might opt into -- and none that I know have.
Tesla has delivered a performant EV that is nice to drive in and is comparable to other luxury vehicles. It's not exactly faking for quite some time.
Tesla has delivered a performant EV that is nice to drive in and is comparable to other luxury vehicles. It's not exactly faking for quite some time.
The fake it part is calling something full self driving when it does anything but that.
They stopped calling it fully self driving a little while ago in part due to a lot of pretty bad press and some good journalistic research.
> "Full Self-Driving Capability $10,000"
... is listed today as an option when configuring any vehicle on tesla.com
... is listed today as an option when configuring any vehicle on tesla.com
You're right. I think there's several regulators on it, but no one has forced them to rephrase the statement.
They're charging for "full self-driving" separately from the car, so I think it's fair to put it in the same bucket.
I commented this in a different story, but I hate that the media (and now apparently HN) is conflating outright fraud with "fake it until you make it" culture. They are totally different, and the line between them is actually bright and clear, not some "gray, fuzzy" distinction some people propose.
That clear line is simply "are you telling a material lie about the present?" In Theranos' case, there were numerous instances when Holmes lied about the current capabilities of her company and its tech that she knew to be false. That is very different from making overly optimistic assessments about future capabilities.
Would love to hear any stories about a company that "faked it" when talking about their present day capabilities but we're able to "make it" before the fraud was discovered.
That clear line is simply "are you telling a material lie about the present?" In Theranos' case, there were numerous instances when Holmes lied about the current capabilities of her company and its tech that she knew to be false. That is very different from making overly optimistic assessments about future capabilities.
Would love to hear any stories about a company that "faked it" when talking about their present day capabilities but we're able to "make it" before the fraud was discovered.
I agree that there is a difference. But, I do think that the line is not so clear in more than a few instances, and that the business culture in SV has normalized this.
The use of exaggeration, vague, misleading and/or conflicting statements, labels, or depictions can really blur that line.
Determining whether a statement is a lie is not always a straightforward and undisputed process.
The use of exaggeration, vague, misleading and/or conflicting statements, labels, or depictions can really blur that line.
Determining whether a statement is a lie is not always a straightforward and undisputed process.
It's not really impossible if you operate on first principle.
Now, it might be harder to distinguish someone who can do it well and who'll do it poorly, but that's another issue.
Now, it might be harder to distinguish someone who can do it well and who'll do it poorly, but that's another issue.
This is the sort of pseudo-tech BS that she fed everyone. She had Jobs envy and thought his approach would work everywhere.
All those examples (and all of yours) are from computers. Blood tests are different from computers. You cannot assume that, just because great things happened with computers, the same things can happen in all walks of life.
All those examples (and all of yours) are from computers. Blood tests are different from computers. You cannot assume that, just because great things happened with computers, the same things can happen in all walks of life.
The Jobs presentation thing did work - much of the audience bought into it early on - combined with the hefty bonus points of her being a woman in Silicon Valley that the media was desperate to elevate as a path blazing icon (so desperate they entirely drank the kool-aid and acted as a valuable reinforcement pillar for the fraud, and largely failed to investigate if Theranos was legitimate).
Jobs had follow-through, he had real products that often lived up to his pitching. His salesmanship was merely half the equation. Holmes only had a poor clone of that salesmanship, with none of the product. Had Theranos had real products, the approach she used in trying to quasi copy the Jobs image/presentation, would have served the promotional purpose effectively, as the media loved it.
Jobs had follow-through, he had real products that often lived up to his pitching. His salesmanship was merely half the equation. Holmes only had a poor clone of that salesmanship, with none of the product. Had Theranos had real products, the approach she used in trying to quasi copy the Jobs image/presentation, would have served the promotional purpose effectively, as the media loved it.
The voice pitch thing she was doing was a nice touch too.
They say she might testify in her own defense. Of course, the attorneys will always say that, to keep the prosecution guessing. "Hide the ball" is the term the lawyers use.
If she does, whether she'll use the deep voice is a big question.
If she does, whether she'll use the deep voice is a big question.
Where can I put money that she will not use the deep voice. She doesn't testify it's a push.
These examples are all "impossible" due to regulatory or commercial constraints, rather than scientific - which is a category of obstacle somewhat more difficult to overcome.
Not scientific, physical.
Tesla anticipated this, though, such laws don't get passed fast.
They don't have the software, the core of the product.
And the fsd beta testers had to sign NDAs.
They don't have the software, the core of the product.
And the fsd beta testers had to sign NDAs.
This illuminates the problem: thinking that the startup model can be applied to everything. This leads to people either naively tackling problems (you listed successes, but for every success there's many, many, failures). At worst, you find have someone who can use the startup model to hide fraud and grifting.
AFAIK, the most likely projection at this point is that Uber will not have made a single dollar from the day it was created until the day it shuts down, and might well face similar scrutiny as Theranos someday (although, not being health related, consequences might not be as severe).
Who is claiming its impossible is what matters as well as when.
If somebody has given something serious thought then their claim could be valid but unless they're providing any evidence it's probably a worthless claim. The evidence is also time constrained as the US going to the moon right now is pretty ludicrous but in a few years maybe somebody will have made a new lander.
Also I don't think you picked good examples.
Uber wasn't the first taxi app so it was definitely possible (IIRC both mapquest & google maps had a taxi tie-in at one point). Amazon used to charge for shipping so the cost of pack & ship is irrelevant (they weren't doing the current VC model of giving out dollars for 50 cents). See https://press.aboutamazon.com/news-releases/news-release-det... .
Personal computers were ludicrous at a time when a computer took up more than a whole room. Just like flying cars are ludicrous but technology changes and thats why due diligence matters, is this company developing any technology or are they lieing.
Also I don't think you picked good examples.
Uber wasn't the first taxi app so it was definitely possible (IIRC both mapquest & google maps had a taxi tie-in at one point). Amazon used to charge for shipping so the cost of pack & ship is irrelevant (they weren't doing the current VC model of giving out dollars for 50 cents). See https://press.aboutamazon.com/news-releases/news-release-det... .
Personal computers were ludicrous at a time when a computer took up more than a whole room. Just like flying cars are ludicrous but technology changes and thats why due diligence matters, is this company developing any technology or are they lieing.
Uber was not generally illegal [0]. So called “Black car” (or private car for hire) services (so called because these cars used to be limousine like vehicles but now can be anything, e.g. UberX) where a driver arranges pickup with a passenger in advance — which is how Uber started - is not regulated in most cities at all, or is regulated very differently than taxis.
What legally distinguishes taxis and requires medallions in many cities is the ability for passengers to “hail” an unknown taxi from the sidewalk and get a ride. (Uber didn’t start out offering taxis, but now some of the vehicles that they make available are also taxis.)
You cannot “hail” an Uber on the street and get a ride in it (unless that Uber, now, happens to also be a taxi). You had to book trips in advance. The trips might have been booked only a few minutes in advance, but that was the legal distinction between these two classes of transportation.
I am not aware of there being any regulation involved if you wanted to arrange a ride from the Seattle airport to the Space Needle with me as your driver on a certain date for a certain price, for example. Or 10 minutes from now. (Actually that’s a bad example. I believe there are certain areas of the city where drivers have to offer city-regulated fixed price fares either to the airport or from the airport or both, to certain sections of downtown. It’s a relatively small area though; I don’t know if it includes the Space Needle or not.)
In fact, Uber was able to grow so quickly because so many of these “private car for hire” services already existed in major cities. The cars were often owner-operated small businesses, with one car or a small fleet of vehicles and employees (with the owner typically being one of the drivers). They were able to tap into this excess supply and put it to use. At least that was the case in Seattle where I spoke to many Uber drivers during its early years, all of whom had existing businesses and wanted to give me their business card to cut out the middleman (Uber). They used Uber to gain additional business during downtime from their other clients, and often offered their business cards to riders before Uber started cracking down on that [1].
Originally if you had a relationship with a private car service and you were planning trips days ahead, then you could typically get a better price than Uber would offer for market rate pricing (once its low promotional discount pricing eased up) with no advanced planning. (However Uber now appears to offer the ability to schedule rides up to 30 days in advance; I don’t know if this change is the fare or not). Since Uber takes a cut of the transaction you can probably still get better pricing from individual private services. The value that Uber offers for most passengers in the ability to get reliable high quality transportation on demand. (High quality in the sense that poor quality drivers are removed from the platform)
Uber provided legitimate value by connecting the supply of private-cars-for-hire with the passengers who wanted to hire them, creating a sort of marketplace. (Not a true marketplace because Ubers set the price of fares; but I’m marketplace in the sense that drivers and passengers can choose to use the platform to connect and conduct a transaction of driving for hire.) Uber won by providing a superior experience for both parties having a reputation system for both sides with a 5-star score.
How many people reading this have had the experience of ordering a taxi and having it arrive late or not at all? Or have simply been frustrated by the lack of visibility into when it will arrive, or whether it’s even coming, when you need to get to the airport? Or when you get to your destination you learn that “the credit card reader is not working”? (which is illegal in many/most cities). I’ve certainly had all of these experiences in many cities with taxis.
Taxi drivers experienced no real penalties for misbehavior like falsely claiming their credit card reader is not working, or for not maintaining it in working order, or for taking tourists on a “scenic route“ to their destination” (unless a passenger called the taxi company and report them - and who would bother? Plus I don’t necessarily know the local law in the area, like whether the taxi is required to have a working credit card reader; and in the days when Uber was building traction, I might not have had mapping software on my phone so as to know whether the taxi was taking me on an unnecessarily long route.)
Uber provided a legitimately better product experience by solving these problems. You could see your vehicle as it traveled to you, eliminating the uncertainty around whether transportation was coming and an ETA for its arrival. You could enter your destination and Uber would provide turn by turn driving instructions that the driver was expected to follow to get to the destination following a close-to-optimal path. If the transportation provider was rude or provided poor service, then you could give them a bad rating, and poor service providers were be removed from the platform. Similarly bad customers that were drunk and misbehaved and did things like throw up in the vehicle would also receive a poor rating and might find themselves kicked off the platform after repeating that type of behavior.
This reputation system was completely missing from taxis and is one of the reasons why they were so dysfunctional in my opinion.
The vast majority of Uber’s growth and expansion was in the unregulated or lightly regulated area of arranging transportation ahead of time between passenger and driver. So long as the driver has a regular driver license in most cities, rides-for-hire that are arranged in advance not regulated, or are minimally regulated (though Uber/Lyft-targeted regulation have appeared in response to their presence).
[0] Various cities subsequently banned it or limited it after the fact, partially in response to political pressure from things like taxi unions, or other reasons; but the core business model was not originally illegal in typical cities.
[1] IMO, I don’t think it’s necessary for Uber to prevent high-end drivers from offering their professional business card when the trip is complete if they do so in a professional way. What Uber offers is the ability to get a ride at any place at any time; I don’t want to have a stack of business cards from private car services in my wallet that I dial one after the other to see if they are free to pick me up — with the same lack of visibility and accountability that taxis used to have.
What legally distinguishes taxis and requires medallions in many cities is the ability for passengers to “hail” an unknown taxi from the sidewalk and get a ride. (Uber didn’t start out offering taxis, but now some of the vehicles that they make available are also taxis.)
You cannot “hail” an Uber on the street and get a ride in it (unless that Uber, now, happens to also be a taxi). You had to book trips in advance. The trips might have been booked only a few minutes in advance, but that was the legal distinction between these two classes of transportation.
I am not aware of there being any regulation involved if you wanted to arrange a ride from the Seattle airport to the Space Needle with me as your driver on a certain date for a certain price, for example. Or 10 minutes from now. (Actually that’s a bad example. I believe there are certain areas of the city where drivers have to offer city-regulated fixed price fares either to the airport or from the airport or both, to certain sections of downtown. It’s a relatively small area though; I don’t know if it includes the Space Needle or not.)
In fact, Uber was able to grow so quickly because so many of these “private car for hire” services already existed in major cities. The cars were often owner-operated small businesses, with one car or a small fleet of vehicles and employees (with the owner typically being one of the drivers). They were able to tap into this excess supply and put it to use. At least that was the case in Seattle where I spoke to many Uber drivers during its early years, all of whom had existing businesses and wanted to give me their business card to cut out the middleman (Uber). They used Uber to gain additional business during downtime from their other clients, and often offered their business cards to riders before Uber started cracking down on that [1].
Originally if you had a relationship with a private car service and you were planning trips days ahead, then you could typically get a better price than Uber would offer for market rate pricing (once its low promotional discount pricing eased up) with no advanced planning. (However Uber now appears to offer the ability to schedule rides up to 30 days in advance; I don’t know if this change is the fare or not). Since Uber takes a cut of the transaction you can probably still get better pricing from individual private services. The value that Uber offers for most passengers in the ability to get reliable high quality transportation on demand. (High quality in the sense that poor quality drivers are removed from the platform)
Uber provided legitimate value by connecting the supply of private-cars-for-hire with the passengers who wanted to hire them, creating a sort of marketplace. (Not a true marketplace because Ubers set the price of fares; but I’m marketplace in the sense that drivers and passengers can choose to use the platform to connect and conduct a transaction of driving for hire.) Uber won by providing a superior experience for both parties having a reputation system for both sides with a 5-star score.
How many people reading this have had the experience of ordering a taxi and having it arrive late or not at all? Or have simply been frustrated by the lack of visibility into when it will arrive, or whether it’s even coming, when you need to get to the airport? Or when you get to your destination you learn that “the credit card reader is not working”? (which is illegal in many/most cities). I’ve certainly had all of these experiences in many cities with taxis.
Taxi drivers experienced no real penalties for misbehavior like falsely claiming their credit card reader is not working, or for not maintaining it in working order, or for taking tourists on a “scenic route“ to their destination” (unless a passenger called the taxi company and report them - and who would bother? Plus I don’t necessarily know the local law in the area, like whether the taxi is required to have a working credit card reader; and in the days when Uber was building traction, I might not have had mapping software on my phone so as to know whether the taxi was taking me on an unnecessarily long route.)
Uber provided a legitimately better product experience by solving these problems. You could see your vehicle as it traveled to you, eliminating the uncertainty around whether transportation was coming and an ETA for its arrival. You could enter your destination and Uber would provide turn by turn driving instructions that the driver was expected to follow to get to the destination following a close-to-optimal path. If the transportation provider was rude or provided poor service, then you could give them a bad rating, and poor service providers were be removed from the platform. Similarly bad customers that were drunk and misbehaved and did things like throw up in the vehicle would also receive a poor rating and might find themselves kicked off the platform after repeating that type of behavior.
This reputation system was completely missing from taxis and is one of the reasons why they were so dysfunctional in my opinion.
The vast majority of Uber’s growth and expansion was in the unregulated or lightly regulated area of arranging transportation ahead of time between passenger and driver. So long as the driver has a regular driver license in most cities, rides-for-hire that are arranged in advance not regulated, or are minimally regulated (though Uber/Lyft-targeted regulation have appeared in response to their presence).
[0] Various cities subsequently banned it or limited it after the fact, partially in response to political pressure from things like taxi unions, or other reasons; but the core business model was not originally illegal in typical cities.
[1] IMO, I don’t think it’s necessary for Uber to prevent high-end drivers from offering their professional business card when the trip is complete if they do so in a professional way. What Uber offers is the ability to get a ride at any place at any time; I don’t want to have a stack of business cards from private car services in my wallet that I dial one after the other to see if they are free to pick me up — with the same lack of visibility and accountability that taxis used to have.
In some places, Uber is just a front-end for a bunch of taxi companies to let you hail them. I remember doing this in Athens, the app just calls a taxi for you. Although I don't remember if I paid through the app or paid the driver directly.
Of course, in addition to being more convenient in some circumstances, Uber just offered rides below cost much of the time. For scheduled rides to the airport, many people don’t use Uber over a private car because it’s better but because it can be significantly cheaper.
P.S. In my state in the US, and I believe this is true for most of the country, “commercial drivers licenses“ are required for driving very large and heavy vehicles over a certain weight; they are not required for driving paying passengers in a regular sized vehicle - in case anyone is wondering. You don’t need a special license to transport passengers for hire in typical sized cars, because the expectation is that you already know how to drive those vehicles safely.
A catastrophic vehicle failure at highway speeds could cause death but these kinds of failures are not especially likely, and drivers are expected to be able to reasonably handle circumstances they may encounter. The most dangerous circumstance I can think of off the top of my head that is not whether related would be the explosive decompression of a tire at highway speed, leading to loss of control of the vehicle. While the car might begin to swerve, a driver should react to this and keep the vehicle under control while they navigate to the shoulder. Catastrophic failure of brakes isn’t a common occurrence, and brakes begin to squeak when they are wearing down; the entire brake system would have to fail.
Interestingly, the FAA does make this distinction for pilots licenses: if you are going to fly someone in an aircraft for hire, then a private pilots license (PPL) is not sufficient, and you need a commercial license - even if you’re operating the same aircraft. You can split the costs of travel with someone if you’re both flying to the same destination, but you cannot fly someone else for hire and charge them for everything (in other words, operate a small airline or a charter service).
I can think of a number of good reasons for this: among other things, most adults with driver licenses quickly develop hundreds or thousands of hours behind the wheel of a car, and if the car malfunctions you can simply stop (most of the time — driving in extreme weather conditions being an exception to this). Private pilots engaged in general aviation may take years to reach 1000 hours flying an aircraft, whereas a professional pilot probably flies 1000 hours each year; and has a rigorously routine re-training and certification schedule (from what I understand) because an aircraft malfunction in the air is a very serious situation. Plus the amount of information that pilots need to know in order to fly safely is substantially greater than what drivers need to know; the maneuvers that pilots need to execute are much more cognitively and mechanically intensive, and the concurrent task workload is much higher.
A private pilot engaged in general aviation is the one taking on the risk of an accident, along with anyone they bring along (e.g. friends/family). When a (non-pilot) passenger pays someone else to fly them, they have little understanding of the risks involved in the activity - whereas most adults know how to drive or could easily get a license; and even if they don’t, they understand the risks of road travel - whereas non-pilots have few understanding of the risks of air travel.
A catastrophic vehicle failure at highway speeds could cause death but these kinds of failures are not especially likely, and drivers are expected to be able to reasonably handle circumstances they may encounter. The most dangerous circumstance I can think of off the top of my head that is not whether related would be the explosive decompression of a tire at highway speed, leading to loss of control of the vehicle. While the car might begin to swerve, a driver should react to this and keep the vehicle under control while they navigate to the shoulder. Catastrophic failure of brakes isn’t a common occurrence, and brakes begin to squeak when they are wearing down; the entire brake system would have to fail.
Interestingly, the FAA does make this distinction for pilots licenses: if you are going to fly someone in an aircraft for hire, then a private pilots license (PPL) is not sufficient, and you need a commercial license - even if you’re operating the same aircraft. You can split the costs of travel with someone if you’re both flying to the same destination, but you cannot fly someone else for hire and charge them for everything (in other words, operate a small airline or a charter service).
I can think of a number of good reasons for this: among other things, most adults with driver licenses quickly develop hundreds or thousands of hours behind the wheel of a car, and if the car malfunctions you can simply stop (most of the time — driving in extreme weather conditions being an exception to this). Private pilots engaged in general aviation may take years to reach 1000 hours flying an aircraft, whereas a professional pilot probably flies 1000 hours each year; and has a rigorously routine re-training and certification schedule (from what I understand) because an aircraft malfunction in the air is a very serious situation. Plus the amount of information that pilots need to know in order to fly safely is substantially greater than what drivers need to know; the maneuvers that pilots need to execute are much more cognitively and mechanically intensive, and the concurrent task workload is much higher.
A private pilot engaged in general aviation is the one taking on the risk of an accident, along with anyone they bring along (e.g. friends/family). When a (non-pilot) passenger pays someone else to fly them, they have little understanding of the risks involved in the activity - whereas most adults know how to drive or could easily get a license; and even if they don’t, they understand the risks of road travel - whereas non-pilots have few understanding of the risks of air travel.
I think there's a substantial difference between impossible and illegal. Uber was mostly possible (don't want to minimize their efforts in operation optimization) but also illegal/unregulated. Same for AirBnB.
Personal Computers on the other hand... that's almost all innovation with a dash of unregulated (garage companies, surreptitious deals, etc).
Personal Computers on the other hand... that's almost all innovation with a dash of unregulated (garage companies, surreptitious deals, etc).
> Uber was impossible, because it was illegal.
Radio/Computer dispatch predates Uber. Where Uber got innovative, legally speaking, was making a Black Car service (can't be hailed from the street) just work with scheduling in minutes instead of calling ahead a few hours beforehand.
> Amazon was impossible, as you couldn't pack and ship stuff that cheaply.
Sears did it a hundred year prior here in America.
Radio/Computer dispatch predates Uber. Where Uber got innovative, legally speaking, was making a Black Car service (can't be hailed from the street) just work with scheduling in minutes instead of calling ahead a few hours beforehand.
> Amazon was impossible, as you couldn't pack and ship stuff that cheaply.
Sears did it a hundred year prior here in America.
> how they didn't do due diligence
"due diligence" processes are in practice a lot less stringent or rigorous than an outsider would expect them to be given the amount of money involved. Companies get bought based on glorified sales pitches and nobody looks too hard at what they're buying is the unfortunate truth of the matter. Investors are no better.
"due diligence" processes are in practice a lot less stringent or rigorous than an outsider would expect them to be given the amount of money involved. Companies get bought based on glorified sales pitches and nobody looks too hard at what they're buying is the unfortunate truth of the matter. Investors are no better.
I think it probably depends. When we sold our company they spent months digging into numbers. And they kept asking for new types of metrics that we had to figure out ways to derive from data that wasn't necessarily designed to measure those metrics.
If you had sat next to Bill Clinton on a TED talk stage and had a former Secretary of State and his friends on your board I bet things would have gone more smoothly for you.
I went through a similar experience. Turns out the acquiring company knew it's audience well - all of the metrics were for sales pitches tailored to specific investors that they were raising money from, which they got shortly before finally closing our deal.
Turtles all the way down.
Turtles all the way down.
You’re talking about selling your company, rather than raising money for a startup.
At the stage where you’re selling a company, you’re expected to have sales, metrics, and various track records that can be verified, hence the intensive due diligence. And usually the acquiring company has in-house expertise on the domain, and is capable of doing the due diligence.
Early stage startups have none of that, just an idea, things the team have done before as proof they can execute, and sometimes some social proof like TED talks or high-profile board members.
The challenge of doing due diligence then is that most general VCs that invest across a broad range of domains lack the in-house expertise to fully vet all of them. They can hire SME advisors, or ask around in their network, and should. But it’s possible for things to slip through the cracks sometimes.
At the stage where you’re selling a company, you’re expected to have sales, metrics, and various track records that can be verified, hence the intensive due diligence. And usually the acquiring company has in-house expertise on the domain, and is capable of doing the due diligence.
Early stage startups have none of that, just an idea, things the team have done before as proof they can execute, and sometimes some social proof like TED talks or high-profile board members.
The challenge of doing due diligence then is that most general VCs that invest across a broad range of domains lack the in-house expertise to fully vet all of them. They can hire SME advisors, or ask around in their network, and should. But it’s possible for things to slip through the cracks sometimes.
We worked with a med-tech company, as a subcontract. That company kept getting funding, investors kept pumping money in. Despite the company now being to old the justify being a startup, they had never been profitable.
We happend to know one of the newer investors and asked who did technical due dilligence, because from what we could tell the primary product was just a bunch of outdated open source software glued together and general build on 15 year old tech. We got a very angry call from the CEO telling us “to mind our own fucking business”. We don’t work for them anymore.
We happend to know one of the newer investors and asked who did technical due dilligence, because from what we could tell the primary product was just a bunch of outdated open source software glued together and general build on 15 year old tech. We got a very angry call from the CEO telling us “to mind our own fucking business”. We don’t work for them anymore.
Look at the board. Older men. They saw an attractive, young, energetic technology wizard and fell for her charm. I don't know if one could go as far as to say this is female privilege, but I think there was definitely elements of seduction.
> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.
The thing is, the primary goal of an investor is not to invest in companies that are honest and actually do what they claim. The goal is to invest in a company that reaches a valuation high enough to let them recoup their investment at a profit.
If that valuation happens through fraud, hype, destroying the environment, whatever, that doesn't really factor in. It probably is the case that successfully doing what the company claims has a positive correlation with higher valuation, but it's not strictly necessary.
The failure mode for the investors in Theranos is not that it was fraudulent. It's that the fraud was discovered before they could cash out. They didn't need to believe that Theranos was honest, they just needed to believe that other later investors would believe they were honest.
The thing is, the primary goal of an investor is not to invest in companies that are honest and actually do what they claim. The goal is to invest in a company that reaches a valuation high enough to let them recoup their investment at a profit.
If that valuation happens through fraud, hype, destroying the environment, whatever, that doesn't really factor in. It probably is the case that successfully doing what the company claims has a positive correlation with higher valuation, but it's not strictly necessary.
The failure mode for the investors in Theranos is not that it was fraudulent. It's that the fraud was discovered before they could cash out. They didn't need to believe that Theranos was honest, they just needed to believe that other later investors would believe they were honest.
Can you provide any examples of a high-profile company, ultimately shown to be dishonest, where the early investors were able to “cash out” before this dishonesty became known?
Groupon.
I remember the company/service but I'm unfamiliar with the unfolding of the company.
They launched their IPO while marginal revenue was still solidly negative; published a bunch of non-standard metrics; and the founders and early investors took out 80% of the money raised even before the IPO.
https://en.m.wikipedia.org/wiki/Groupon#Initial_public_offer...
https://en.m.wikipedia.org/wiki/Groupon#Initial_public_offer...
Depends on what you call early. Nikola and WeWork come to mind, I assume Newman wasn't the only one to cash out early enough during one of the founding rounds.
Uber
Explanation, since this is being downvoted.
Uber might not have lied about their business, but it surely looks like investors never cared about the businesses viability and rather only cared about being able to turn a profit on their investment (which was the point being made by the gp).
To this day, it is still not clear if Uber’s business model is viable. Also not to mention the original CEO/founder’s reputation and attitude, which the investors also didn’t care about until it became too big of a scandal. Additionally, the investors didn’t even care that Uber was technically illegal (same as Airbnb btw).
Some references:
https://techcrunch.com/2021/02/12/will-ride-hailing-profits-...
https://www.marketwatch.com/story/uber-and-lyft-are-staging-...
https://www.businessinsider.com/uber-company-scandals-and-co...
Explanation, since this is being downvoted.
Uber might not have lied about their business, but it surely looks like investors never cared about the businesses viability and rather only cared about being able to turn a profit on their investment (which was the point being made by the gp).
To this day, it is still not clear if Uber’s business model is viable. Also not to mention the original CEO/founder’s reputation and attitude, which the investors also didn’t care about until it became too big of a scandal. Additionally, the investors didn’t even care that Uber was technically illegal (same as Airbnb btw).
Some references:
https://techcrunch.com/2021/02/12/will-ride-hailing-profits-...
https://www.marketwatch.com/story/uber-and-lyft-are-staging-...
https://www.businessinsider.com/uber-company-scandals-and-co...
Agreed. EBITDA in general is hot garbage, but that is egregious.
"Uber might not have lied about their business"
Yea that is what we discussing about Theranos. Theranos was an outright fraud. You cannot say the same about Uber whether they inflated or lied about their profits etc. Uber provides a real service and honestly a good one for people. Theranos on the other hand, played with people's lives by lying about their entire business model and product which never worked. Big difference.
Yea that is what we discussing about Theranos. Theranos was an outright fraud. You cannot say the same about Uber whether they inflated or lied about their profits etc. Uber provides a real service and honestly a good one for people. Theranos on the other hand, played with people's lives by lying about their entire business model and product which never worked. Big difference.
I think you're somewhat making an argument that the "means" are justified if the end is noble. I think the whole discussion revolts around the several issues with that "system" or "philosophy" here in the Valley.
I personally don't think it's the right way to do things. Big fraud, small lies (fraud), it's all pretty bad.
I personally don't think it's the right way to do things. Big fraud, small lies (fraud), it's all pretty bad.
To some extent, aren't startups supposed to be doing things to challenge the status quo which sometimes can mean that they are breaking rules ? Uber overall has been a net positive in my humble opinion so I definitely think that to an extent, the means are justified if the end is noble.
If we're going to restraint to personal opinions, my strong personal opinion is that startups have to operate in the context of truth, rule of law and business ethics. That would be my hope. I think it's totally possible to succeed and still work through that lens. I think thinking otherwise, is actually a fallacy perpetuated by certain groups here in the Valley.
I strongly believe that you can challenge the status quo and abide by honesty and rule of law.
I strongly believe that you can challenge the status quo and abide by honesty and rule of law.
A dishonest company in other ways too. They sent drivers and riders misleading information about any local attempts to regulate them in the slightest.
When they first launched UberX in DC, I called them out for a price comparison of Taxi vs UberX that couldn't possibly be true. They quietly changed the blog post and marketing materials shortly after.
When they first launched UberX in DC, I called them out for a price comparison of Taxi vs UberX that couldn't possibly be true. They quietly changed the blog post and marketing materials shortly after.
> which the investors also didn’t care about until it became too big of a scandal
More like investors didn't care until they needed liquidity.
More like investors didn't care until they needed liquidity.
The idea that Uber is not profitable is a myth isn’t it? I remember they posted some financial documents a while back that showed them in the red. But when I looked at the papers there were literal billions in advertising and expansion.
Uber runs the app. People call an Uber and they pay money. Some of that money goes to the driver and some goes to Uber. You’re really saying that Uber can’t collect enough money to run their computers and pay some staff? It just doesn’t make sense. Of course they can.
Uber runs the app. People call an Uber and they pay money. Some of that money goes to the driver and some goes to Uber. You’re really saying that Uber can’t collect enough money to run their computers and pay some staff? It just doesn’t make sense. Of course they can.
> The idea that Uber is not profitable is a myth isn’t it?
I worked on the long-term forecasting team while I was there. At least 5-6 years ago, Uber was very, very far from profitable. I can't imagine much has changed enough for it to make them profitable. Maybe with the new CEO things changed but I'm doubtful. That company had a slew of issues.
I worked on the long-term forecasting team while I was there. At least 5-6 years ago, Uber was very, very far from profitable. I can't imagine much has changed enough for it to make them profitable. Maybe with the new CEO things changed but I'm doubtful. That company had a slew of issues.
Right, but would they be profitable if you took out the advertising and expansion costs? From the document I saw, yes. Can you please explain where are these enormous costs that are necessary to run the business? Is it SV salaries? Are their servers costing too much money? It doesn’t make sense. It’s like saying that the concept of dispatching taxis with a computer is not capable of being profitable. It simply isn’t true. It’s like people who said Amazon and Tesla were vapor ware because they were unprofitable. Everyone in the media and most people on HN couldn’t fathom the concept of subtracting R&D.
It's not an easy question to answer, but the majority of the cost were salaries and marketing. We didn't consider the one-off costs of e.g. legal, from what I remember.
It was in the order of thousands (I think either $2k or $22k, sorry for the rounding error) per user signup that Uber paid in terms of marketing and advertising - and that was regardless of if they generated any money. It was way more for driver signups since the driving bonuses were pretty sizeable.
The amount of staff Uber has is way too much, in my opinion. Uber's internals are the definition of "over-engineered", to the point things were just too complicated for any single person to really work with, let alone understand to any degree. We had teams internally that were making the same thing but had no idea each other existed - and this happened pretty frequently.
There was a lot of turn and restructuring in upper management, not to mention pulling out of China and then having months in a row with almost daily sexual harassment/discrimination/bad CEO news stories breaking out. So the rest of the company was just kind of left to fend for itself for a long time, just burning even more money despite nothing getting released.
I knew one other engineer that... to this day, I'm not sure he even wrote a single line of code. He was always hanging around other people, wanting to chat. When you'd casually ask "so what are you working on these days?" he'd just shrug and smile. Never got a straight answer out of him. He was higher up in the ranks than I was, younger, assumedly paid more. Couldn't answer basic questions about writing code, but loved to brag about his new designer shoes and stuff. Just an anecdote.
It was insanity. Everyone I personally interacted with hated working there, and it was clear it was way too crowded. That, along with the marketing/ad spend, made me convinced Uber would never be profitable.
It was in the order of thousands (I think either $2k or $22k, sorry for the rounding error) per user signup that Uber paid in terms of marketing and advertising - and that was regardless of if they generated any money. It was way more for driver signups since the driving bonuses were pretty sizeable.
The amount of staff Uber has is way too much, in my opinion. Uber's internals are the definition of "over-engineered", to the point things were just too complicated for any single person to really work with, let alone understand to any degree. We had teams internally that were making the same thing but had no idea each other existed - and this happened pretty frequently.
There was a lot of turn and restructuring in upper management, not to mention pulling out of China and then having months in a row with almost daily sexual harassment/discrimination/bad CEO news stories breaking out. So the rest of the company was just kind of left to fend for itself for a long time, just burning even more money despite nothing getting released.
I knew one other engineer that... to this day, I'm not sure he even wrote a single line of code. He was always hanging around other people, wanting to chat. When you'd casually ask "so what are you working on these days?" he'd just shrug and smile. Never got a straight answer out of him. He was higher up in the ranks than I was, younger, assumedly paid more. Couldn't answer basic questions about writing code, but loved to brag about his new designer shoes and stuff. Just an anecdote.
It was insanity. Everyone I personally interacted with hated working there, and it was clear it was way too crowded. That, along with the marketing/ad spend, made me convinced Uber would never be profitable.
Wow what a substantive and interesting comment. Thanks
> It doesn’t make sense. It’s like saying that the concept of dispatching taxis with a computer is not capable of being profitable.
If that’s all you are doing, then yeah, that’s probably not profitable because competition would just eat your margins. You’re essentially a broker matching drivers with passengers, and they can use any service they want. They will choose the one with the lowest cost to use and that pays the most to serve i.e. they will use the one that leaves the least amount of profit for the broker.
Therefore Uber has to have some other value add, which will eat into profits (unclear what that could be, I think they were hoping it could be robotaxis); or, they have to spend massively in advertising to maintain mindshare, which will also eat into profits.
This is why they spend so much on advertising and expansion. They want to be the first player in town because when there are more players, it’s a race to the bottom. You can’t take out the advertising and expansion dollars and say they would be profitable without them, because those dollars are staving off competitors for as long as Uber can. Imagine a future where you have an “Expedia” of taxi services, that search dozens of providers and gives you the lowest one. That’s Uber’s future if they stop their spending.
The question of profitability then becomes: how can Uber justify its existence while staving off competitors, and can they manage this before going under? Maybe given an infinite time horizon and infinite VC cash, Uber could be profitable one day, but for now I don’t think it’s clear they are or will be soon.
If that’s all you are doing, then yeah, that’s probably not profitable because competition would just eat your margins. You’re essentially a broker matching drivers with passengers, and they can use any service they want. They will choose the one with the lowest cost to use and that pays the most to serve i.e. they will use the one that leaves the least amount of profit for the broker.
Therefore Uber has to have some other value add, which will eat into profits (unclear what that could be, I think they were hoping it could be robotaxis); or, they have to spend massively in advertising to maintain mindshare, which will also eat into profits.
This is why they spend so much on advertising and expansion. They want to be the first player in town because when there are more players, it’s a race to the bottom. You can’t take out the advertising and expansion dollars and say they would be profitable without them, because those dollars are staving off competitors for as long as Uber can. Imagine a future where you have an “Expedia” of taxi services, that search dozens of providers and gives you the lowest one. That’s Uber’s future if they stop their spending.
The question of profitability then becomes: how can Uber justify its existence while staving off competitors, and can they manage this before going under? Maybe given an infinite time horizon and infinite VC cash, Uber could be profitable one day, but for now I don’t think it’s clear they are or will be soon.
> If that’s all you are doing, then yeah, that’s probably not profitable because competition would just eat your margins.
So markets don’t exist? Businesses can’t exist in a market? This is economics 101. No wonder everyone is so off
So markets don’t exist? Businesses can’t exist in a market? This is economics 101. No wonder everyone is so off
No, that's not what I said. My point is explicitly that markets do exist, and that markets are the mechanism by which Uber will find itself unprofitable, because they aren't adding enough value to the equation. Having the app and the scheduling algorithm was a game changer a decade ago, but now that part of the business has been effectively commoditized.
But Uber doesn't want to be 1 of 1000 taxi players in a crowded market with no margins. They want to be taxi king of the world. How do they stay on top when every local municipality can hire some college kids to make a close facsimile to what Uber does? Sure maybe it's not as good as the Uber offering, but they don't have to support a global taxi empire, so they can offer their service for a lot less than Uber can. If that app takes hold in city X, why are people going to use Uber when they come to town 30% more expensive than your small town provider?
But Uber doesn't want to be 1 of 1000 taxi players in a crowded market with no margins. They want to be taxi king of the world. How do they stay on top when every local municipality can hire some college kids to make a close facsimile to what Uber does? Sure maybe it's not as good as the Uber offering, but they don't have to support a global taxi empire, so they can offer their service for a lot less than Uber can. If that app takes hold in city X, why are people going to use Uber when they come to town 30% more expensive than your small town provider?
> Right, but would they be profitable if you took out the advertising and expansion costs?
An issue with this line of thought is that you think that they could one day flip a switch and just like that stop expanding or acquiring new customers.
Two problems with that are: 1) most likely if they stop growing, they start shrinking - it’s not like they are the only ones out there doing what they do, and 2) a lot of their marketing and expansion expenses (as corroborated by the sibling comment) don’t go towards acquiring new customers, but rather new drivers, which given their turn over, they can’t stop putting money into.
So basically if they stop spending money on advertising and expansion, they will loose all their drivers and slowly churn customers as well.
Hence, it doesn’t matter if they could technically be profitable without advertising and expansion, because then their business becomes unviable.
An issue with this line of thought is that you think that they could one day flip a switch and just like that stop expanding or acquiring new customers.
Two problems with that are: 1) most likely if they stop growing, they start shrinking - it’s not like they are the only ones out there doing what they do, and 2) a lot of their marketing and expansion expenses (as corroborated by the sibling comment) don’t go towards acquiring new customers, but rather new drivers, which given their turn over, they can’t stop putting money into.
So basically if they stop spending money on advertising and expansion, they will loose all their drivers and slowly churn customers as well.
Hence, it doesn’t matter if they could technically be profitable without advertising and expansion, because then their business becomes unviable.
Uber pays drivers a substantial amount through bonuses which are categorized as marketing and advertising. Your claim that they could operate without marketing is saying Uber could operate without drivers. Without bonuses, they would lose a significant amount of driver supply, without driver supply, the rider experience is slow, when it’s slow - they lose customers.
Advertising is a core business expense for them needed to run the business.
Advertising is a core business expense for them needed to run the business.
Excluding an integral part of the costs to say they are profitable is like saying you are cash flow positive, after including external funding. There is a reason why companies are running their books the way they are. Very good and valid ones!
I don’t know if that’s a technical accounting term but “integral” is the key word there. Massive expansion is not integral to the normal operations of a business. R&D and literal billion dollar ad campaigns are tools to expand and grow into whatever space is open from lack of competition. Amazon filled their space, Tesla theirs and one of the computerized taxi companies will fill that space. Until they do, they will spend money on expansion. So that’s the key. It’s a temporary state. “Integral” is a completely incorrect term for the cost of that growth. The viability of a business is based on how much it costs them to actually carry out their core business.
And maybe Uber has already gotten as big as they will get. It doesn’t change the fact that they don’t need one billion dollars in advertising. And also, what you are asserting is that it’s impossible for a computerized taxi company to exist. So do you think it would be cheaper to have a human dispatcher? Obviously you can run a profitable taxi company. It’s been a thing for a long time and the computers aren’t making it any worse or more expensive I can assure you.
And maybe Uber has already gotten as big as they will get. It doesn’t change the fact that they don’t need one billion dollars in advertising. And also, what you are asserting is that it’s impossible for a computerized taxi company to exist. So do you think it would be cheaper to have a human dispatcher? Obviously you can run a profitable taxi company. It’s been a thing for a long time and the computers aren’t making it any worse or more expensive I can assure you.
There's a bunch of ways to rationally explain the losses in any operation. None of them make it profitable.
> The idea that Uber is not profitable is a myth isn’t it?
No, it’s a financial/accounting fact expressed by Uber themselves in their filings as a public company.
Having a business model (which is what you are describing), doesn’t make it profitable.
Hertz had a business model too, they owned cars, people rented cars and paid money for that. Are you saying Hertz couldn’t collect enough money to run their operations and pay some staff? Well they couldn’t, and they went bankrupt. They were also in the red for several years before the pandemic hit.
No, it’s a financial/accounting fact expressed by Uber themselves in their filings as a public company.
Having a business model (which is what you are describing), doesn’t make it profitable.
Hertz had a business model too, they owned cars, people rented cars and paid money for that. Are you saying Hertz couldn’t collect enough money to run their operations and pay some staff? Well they couldn’t, and they went bankrupt. They were also in the red for several years before the pandemic hit.
Collecting enough money to pay staff/run servers != profitable. You're asking a cash flow vs. a income statement question. With enough cash flow, yes, can achieve any sort of operational expense that you're referring to.
Uber still hasn't turned a profit, and might be able to soon via some creative accounting: https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-f...
Uber still hasn't turned a profit, and might be able to soon via some creative accounting: https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-f...
They hide tons of opex as "marketing".
There it is! The one person who actually answers my question!
WeWork and Nikola come to mind. Robinhood depending on if you consider purporting yourself to be “stealing from the rich, giving to the poor - Robinhood”, but you actually take orders from Citadel to be fraud. I think a lot of recent IPOs will turn out to be fraud-lite, in which it is shown over the next decade that these companies were pump and dumps that never actually do anything. They look just good enough to garner investment at IPO for initial investors to cash out.
Most any company with ML or AI in their branding, running stupid amounts of CNBC ads and repeating their AI name 30 times during the ad.
Most any company with ML or AI in their branding, running stupid amounts of CNBC ads and repeating their AI name 30 times during the ad.
Which investor actually made money from WeWork? If anything it's an example proving the opposite. The founder may have made some money but the investors were left holding the bags. The whole scandal was centered around the size of the investment loss that the main investor, Softbank, had to eat...
Benchmark did. Invested in the early rounds (starting with Series A of $15m, mentioned in "WeWork, Adam Neumann, and the great Startup Delusion"), mid rounds and the final stake when they were supposed to IPO was $626m -- 40x their initial investment, according to FT[0].
0. https://www.ft.com/content/d32c8526-f555-11e9-b018-3ef8794b1...
0. https://www.ft.com/content/d32c8526-f555-11e9-b018-3ef8794b1...
Well, yeah…
The old political ways are not going anywhere anytime soon. The useful land is politically captured.
Hack the planet; have money = untouchable in our society.
After biological well-being, there isn’t much economic activity needed to sustain the species.
This is why the market went up during the lockdown but do nothing companies worth $75 a year ago are worth <$10 again.
At some point it just becomes keeping the simulation alive for the sake of those that benefit most from the simulation; these gods, then this god, then no god, we create value…
The old political ways are not going anywhere anytime soon. The useful land is politically captured.
Hack the planet; have money = untouchable in our society.
After biological well-being, there isn’t much economic activity needed to sustain the species.
This is why the market went up during the lockdown but do nothing companies worth $75 a year ago are worth <$10 again.
At some point it just becomes keeping the simulation alive for the sake of those that benefit most from the simulation; these gods, then this god, then no god, we create value…
WeWork and Theranos were selling hype no real solution or service. They seem like companies from dot com bubble era, I thought tech investors got smarter but they are still as stupid as they were 30 years ago.
WeWork is different than Theroanos.
People actually rented WeWork properties and got a valuable service.
The problem was more or less shenanigans on the Exec. side, and unsustainable financial situation.
In that case, the 'consumers' actually end up ahead, with a cheaper services than otherwise, then investors lost.
People actually rented WeWork properties and got a valuable service.
The problem was more or less shenanigans on the Exec. side, and unsustainable financial situation.
In that case, the 'consumers' actually end up ahead, with a cheaper services than otherwise, then investors lost.
>WeWork is different than Theroanos.
From my understanding, WeWork was more of a working business that was overvalued and had a lot of self-dealing with the CEO (which I would characterize as embezzling, but may not legally have been.) Theranos invested their money in trying to make an impossible product, lying and failing at it the whole time.
But I could be wrong, sensationalist news headlines and such.
From my understanding, WeWork was more of a working business that was overvalued and had a lot of self-dealing with the CEO (which I would characterize as embezzling, but may not legally have been.) Theranos invested their money in trying to make an impossible product, lying and failing at it the whole time.
But I could be wrong, sensationalist news headlines and such.
I believe this is correct.
This is the first one that came to mind for me.
Most, if not all SPACs.
Still unfolding, but Lordstown Motors looks like exactly that.
https://hindenburgresearch.com/lordstown/
https://hindenburgresearch.com/lordstown/
Do cigarette companies lying about health effects of smoking and Big Oil doing the same about climate change count?
Just example links, I think I'm not making any outrageous claims but that this has long been established and discussed here too many times:
https://stopswithme.com/exposing-big-tobacco/big-tobacco-fou...
https://www.theguardian.com/environment/2021/jun/30/climate-...
The investors already got theirs many times over.
I think you could also include any company that left what became a "super fund site" (US name, similar in other countries). They cannot have believed creating and leaving all that toxic waste in the ground would be a neutral action.
Just example links, I think I'm not making any outrageous claims but that this has long been established and discussed here too many times:
https://stopswithme.com/exposing-big-tobacco/big-tobacco-fou...
https://www.theguardian.com/environment/2021/jun/30/climate-...
The investors already got theirs many times over.
I think you could also include any company that left what became a "super fund site" (US name, similar in other countries). They cannot have believed creating and leaving all that toxic waste in the ground would be a neutral action.
Oil companies and their suppression of climate change science.
MagicLeap, Groupon, Nikola, WeWork, Uber..
A company doesn't have to have an exit for early investors to get out. You just need to find a sucker to buy into a round later than you.
How to do that, in the modern context, is pretty clear. Either do it through outright fraud (Theranos, Nikola, MagicLeap), extreme FOMO (MagicLeap), or raising so much that you crush competition despite comically bad fundamentals and never get to unit-profitability (Uber, others).
A company doesn't have to have an exit for early investors to get out. You just need to find a sucker to buy into a round later than you.
How to do that, in the modern context, is pretty clear. Either do it through outright fraud (Theranos, Nikola, MagicLeap), extreme FOMO (MagicLeap), or raising so much that you crush competition despite comically bad fundamentals and never get to unit-profitability (Uber, others).
Robinhood
MoviePass
Movie pass was literally a loss for the vast majority of its investors. If anything it was a wealth transfer from the public/private market to the app users who got extremely subsidized movie tickets. Moviepass was a total loss for it's investors, so how does that not prove the opposite of what's being argued here
Enron, to some extent.
The hard part here is "ultimately shown to be dishonest" - who is privy to what is said in boardrooms and sale negotiations? How about just examples where the investors managed to get out just before the bubble popped?
The canonical example would be Broadcast.com, which made Mark Cuban a billionaire.
https://en.wikipedia.org/wiki/Broadcast.com
1998 IPO at $1B valuation
1999 bought by Yahoo! for $5.7B
2002 shut down
The canonical example would be Broadcast.com, which made Mark Cuban a billionaire.
https://en.wikipedia.org/wiki/Broadcast.com
1998 IPO at $1B valuation
1999 bought by Yahoo! for $5.7B
2002 shut down
uBeam.
This sounds plausible, but as someone else said, has this ever been proven to be the case? What are some good examples?
But in the end, it's such a gamble that I'm skeptical any of the investors knew or suspected fraud when they initially invested. I've heard of exits for companies without a business model or revenue, but how many companies have an exit event (e.g. get acquired or IPO) with no product at all?
> I've heard of exits for companies without a business model or revenue, but how many companies have an exit event (e.g. get acquired or IPO) with no product at all?
Depends on your definition of "no product at all" but it happens all the time in biotech.
Most biotech companies don't have a product until FDA approval because they can't legally sell anything (unless it's a product other biotech/pharma companies can use for their own R&D).
Depends on your definition of "no product at all" but it happens all the time in biotech.
Most biotech companies don't have a product until FDA approval because they can't legally sell anything (unless it's a product other biotech/pharma companies can use for their own R&D).
>The goal is to invest in a company that reaches a valuation high enough to let them recoup their investment at a profit.
Alternatviely, they want to invest in insane companies/founders on the off chance that they actually make it.
>But another theory is: No, those investors really want to be lied to. Those investors are holding a competition of the form “who can sound the most excited and persuasive and crazy when they lie to us,” and they give their money to the winner. They wouldn’t put it quite that way. But what the investors want is a fantasist, a wild-eyed dreamer, a visionary who sees the world not as it is but as it could be. They want someone who looks at $1 million in revenue and sees $10 million. They want someone who looks at some blueprints for an electric truck and sees hundreds rolling off the production line. They want someone who looks at a finger-prick blood test that doesn’t work and sees one that does work. They want someone who believes in something that nobody else believes in, an out-of-consensus visionary who wants to change the world. Obviously obviously obviously they would prefer it if this person’s wild belief comes true, if she succeeds in changing the world. But the first step is to back founders with crazy ideas. And then if one of them works out, that pays for 10 that are just crazy.
>This theory is also well supported! Lots of venture capitalists will say it out loud! But also, like, man, look at the entire history of SoftBank Group Corp. Look at how SoftBank’s Masayoshi Son met WeWork’s Adam Neumann, and Neumann pitched him on some vision of office-space-rental changing the world, and Son gave Neumann $3.1 billion. And, famously, “Mr. Neumann has told others that Mr. Son appreciated how he was crazy—but thought that he needed to be crazier.” You don’t say that and then turn around and check every line of the financial projections for exaggerations and unjustified assumptions. If you invest in startups by (1) meeting crazy people and (2) telling them to be crazier, your main investment criterion is not scrupulous accuracy.
https://www.bloomberg.com/opinion/articles/2021-08-31/theran...
Alternatviely, they want to invest in insane companies/founders on the off chance that they actually make it.
>But another theory is: No, those investors really want to be lied to. Those investors are holding a competition of the form “who can sound the most excited and persuasive and crazy when they lie to us,” and they give their money to the winner. They wouldn’t put it quite that way. But what the investors want is a fantasist, a wild-eyed dreamer, a visionary who sees the world not as it is but as it could be. They want someone who looks at $1 million in revenue and sees $10 million. They want someone who looks at some blueprints for an electric truck and sees hundreds rolling off the production line. They want someone who looks at a finger-prick blood test that doesn’t work and sees one that does work. They want someone who believes in something that nobody else believes in, an out-of-consensus visionary who wants to change the world. Obviously obviously obviously they would prefer it if this person’s wild belief comes true, if she succeeds in changing the world. But the first step is to back founders with crazy ideas. And then if one of them works out, that pays for 10 that are just crazy.
>This theory is also well supported! Lots of venture capitalists will say it out loud! But also, like, man, look at the entire history of SoftBank Group Corp. Look at how SoftBank’s Masayoshi Son met WeWork’s Adam Neumann, and Neumann pitched him on some vision of office-space-rental changing the world, and Son gave Neumann $3.1 billion. And, famously, “Mr. Neumann has told others that Mr. Son appreciated how he was crazy—but thought that he needed to be crazier.” You don’t say that and then turn around and check every line of the financial projections for exaggerations and unjustified assumptions. If you invest in startups by (1) meeting crazy people and (2) telling them to be crazier, your main investment criterion is not scrupulous accuracy.
https://www.bloomberg.com/opinion/articles/2021-08-31/theran...
This is spot on. Investors don't give a damn about the business. They just want a machine that they put money in and more money comes out. I wouldn't be surprised if a lot of fast growing businesses these days are frauds. In such environment, the less they know, the better.
Only frauds can succeed in a monetary system which is itself founded on fraud. So it makes no sense to do due diligence if you know that the company is all hooked up to the money printers because the business doesn't matter. Only the money printer and the business' connection to it matters; everything else is a nuisance.
The business of almost every company in the tech sector these days is the 'capture the newly printed fiat money business.' Any other narrative is fake and only used to create a facade of legitimacy for the company.
No company will ever admit that their main line of business is 'government contracts', 'government grants', 'laundered credit from shell companies', 'foreign money laundering', etc...
Only frauds can succeed in a monetary system which is itself founded on fraud. So it makes no sense to do due diligence if you know that the company is all hooked up to the money printers because the business doesn't matter. Only the money printer and the business' connection to it matters; everything else is a nuisance.
The business of almost every company in the tech sector these days is the 'capture the newly printed fiat money business.' Any other narrative is fake and only used to create a facade of legitimacy for the company.
No company will ever admit that their main line of business is 'government contracts', 'government grants', 'laundered credit from shell companies', 'foreign money laundering', etc...
You're not wrong but… it's pretty disheartening. Do you see a way out?
For businesses that want to minimize their reliance on the (trickle-down scraps of) the fraud money business.
For businesses that want to minimize their reliance on the (trickle-down scraps of) the fraud money business.
I think the economy has become overly financialized - It has become too difficult to earn income through value creation and too easy to earn income through financial schemes - People are realizing this and giving up on value creation en mass. Fraud has become institutionalized (and therefore legalized).
IMO, the financial system has already suffered irreparable damage to its reputation. I think there might be calls for asset seizures and redistribution soon. In the US, the BLM movement has already been campaigning for 'financial reparations'. South Africa just passed a law to allow land to be seized by the government without compensation. I think this might become more widespread - Hopefully it will only be restricted to specific assets; I think big corporate stocks are a likely target for expropriation because they have benefited the most from money printing; it will be easy for people to find evidence of wrongdoing and use it as a basis to seize and redistribute shares (or simply nationalize the companies altogether).
My gut feeling is that we're headed to some kind of partial-communist government - First, they will only seize the assets related to big finance, big tech, big pharma since this will have public support. Maybe later once the public has warmed up to the new form of government, the government will be able to make a move on all private property.
IMO, the financial system has already suffered irreparable damage to its reputation. I think there might be calls for asset seizures and redistribution soon. In the US, the BLM movement has already been campaigning for 'financial reparations'. South Africa just passed a law to allow land to be seized by the government without compensation. I think this might become more widespread - Hopefully it will only be restricted to specific assets; I think big corporate stocks are a likely target for expropriation because they have benefited the most from money printing; it will be easy for people to find evidence of wrongdoing and use it as a basis to seize and redistribute shares (or simply nationalize the companies altogether).
My gut feeling is that we're headed to some kind of partial-communist government - First, they will only seize the assets related to big finance, big tech, big pharma since this will have public support. Maybe later once the public has warmed up to the new form of government, the government will be able to make a move on all private property.
To push this line of reasoning one step further: Therano's CEO's entire strategy seems to have been "fake it till you make it".
In other words, many an actually useful/profitable companies was started on an idea that was known to be impossible from the get-go, but they amass enough capital, visibility and momentum that they can later "pivot" to something that actually works.
Whether that scenario falls in the "fraud" bucket is an interesting question.
In other words, many an actually useful/profitable companies was started on an idea that was known to be impossible from the get-go, but they amass enough capital, visibility and momentum that they can later "pivot" to something that actually works.
Whether that scenario falls in the "fraud" bucket is an interesting question.
> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.
When you're sat on stage next to Bill Clinton people assume someone somewhere has done some due diligence already. Turns out there are a lot more jobs out there to do with marketing, hype, and event planning than there are doing fact checking.
When you're sat on stage next to Bill Clinton people assume someone somewhere has done some due diligence already. Turns out there are a lot more jobs out there to do with marketing, hype, and event planning than there are doing fact checking.
What is Bill Clinton but a hype man, though? The board of Theranos was filled with names evocative of gravitas to baby boomers, but whose input on anything would be worthless.
Clinton? For all his faults, a two term president. And one that left with a federal budget running in the black. That requires some skills, even if I have no idea which exactly.
Edit: Come to think of it, Clinton was also a president that didn't start or prolong a pointless war, on the scale of the war on terror, Vietnam or Korea.
Edit: Come to think of it, Clinton was also a president that didn't start or prolong a pointless war, on the scale of the war on terror, Vietnam or Korea.
Clinton is probably one of the best Presidents in recent history. Obama is the best currently and Biden will probably be the best if he can get his legislation passed and the pandemic under control. Right now blue states with mask requirements and mandatory vaccinations are doing very very well. The rest of us are in for a bumpy ride.
[deleted]
You mean like most people currently know that most of the crypto-claims are bs but hype it up anyway?
You don't invest in something that's changing the world, you're investing in something that gains value, changing the world is just the narrative to get the sucker downstream to jump on board
EDIT: to add something less controversial, i can recommend the book "the key man" of a similar bluff in the impact investing space
You don't invest in something that's changing the world, you're investing in something that gains value, changing the world is just the narrative to get the sucker downstream to jump on board
EDIT: to add something less controversial, i can recommend the book "the key man" of a similar bluff in the impact investing space
> What just amazed me is how gullible all the investors were
You have confused gullibility with willful ignorance.
You have confused gullibility with willful ignorance.
A little history helps [EDIT: Maybe not!] explain it a bit. Back when Holmes was a rising star, we were in the middle of #MeToo, Tech Bro companies were getting increasing scrutiny about their treatment of women, and in general how tech companies were struggling with diversity, and then all of a sudden, we have this company founded by a seemingly smart, driven, technically-savvy woman, educated at Stanford (!) and who wears turtlenecks like Steve Jobs (!!!). It was the perfect narrative. This is the kind of exec they were all looking for right at this moment! People were willing to suspend a lot of disbelief in order to make it real. I imagine these investors had the X-Files "I Want To Believe" poster in their offices. It wasn't so much gullibility as it was a perfect narrative that everyone desperately wanted to believe in.
EDIT: Oh yes, I 100% agree [1] that her outsized personal charisma was a large part of it!
1: https://news.ycombinator.com/item?id=28674285
EDIT2: You're right, I got the MeToo timeline wrong. I seem to have remembered anti-sexism momentum building up long before 2017 but yea the actual hashtag and Weinstein stuff was in the news long after the company rose.
EDIT: Oh yes, I 100% agree [1] that her outsized personal charisma was a large part of it!
1: https://news.ycombinator.com/item?id=28674285
EDIT2: You're right, I got the MeToo timeline wrong. I seem to have remembered anti-sexism momentum building up long before 2017 but yea the actual hashtag and Weinstein stuff was in the news long after the company rose.
That doesn't really square with her board, who were notably from the military and older, conservative leaning men like Kissinger or Shultz. I think they were more taken in by her charisma than they were motivated by feminist activists.
Your timeline makes no sense. Theranos started falling apart in 2016 with charges being filed against Holmes in March 2018. MeToo started in October 2017 with the release of the Harvey Weinstein assault stories.
By the time MeToo started, Theranos had been sued by investors, Walgreens, and CMS. Additionally, Holmes was banned from running labs and Theranos had failed many inspections with severe penalties. Theranos was all but dead by the time MeToo took off.
What really happened (according to my recollection of reading Bad Blood) is that Holmes never really connected with the medical community. Anyone with any domain expertise knew her tech claims were impossible. She used her personal connections to generals, politicians, and wealthy individuals to spin this web of lies and keep raising money. Most of the Silicon Valley Investor elite had nothing to do with Theranos.
I really dislike your interpretation of events. Not only because it makes no sense with the actual history but you play on stereotypes & generalizations to make a point. Tech certainly needs more female founders but you're not helping by twisting what really happened.
1) https://www.chicagotribune.com/lifestyles/ct-me-too-timeline...
2) https://www.cnn.com/2021/09/07/tech/elizabeth-holmes-therano...
By the time MeToo started, Theranos had been sued by investors, Walgreens, and CMS. Additionally, Holmes was banned from running labs and Theranos had failed many inspections with severe penalties. Theranos was all but dead by the time MeToo took off.
What really happened (according to my recollection of reading Bad Blood) is that Holmes never really connected with the medical community. Anyone with any domain expertise knew her tech claims were impossible. She used her personal connections to generals, politicians, and wealthy individuals to spin this web of lies and keep raising money. Most of the Silicon Valley Investor elite had nothing to do with Theranos.
I really dislike your interpretation of events. Not only because it makes no sense with the actual history but you play on stereotypes & generalizations to make a point. Tech certainly needs more female founders but you're not helping by twisting what really happened.
1) https://www.chicagotribune.com/lifestyles/ct-me-too-timeline...
2) https://www.cnn.com/2021/09/07/tech/elizabeth-holmes-therano...
> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.
Gullible or just willing to take a risk on something that may get them a return on their investment before it all collapsed?
Gullible or just willing to take a risk on something that may get them a return on their investment before it all collapsed?
As someone who knows very little about biology, I watched the HBO documentary about Theranos and am kind of still confused by some of the conflicting claims I hear.
In the documentary, they focused a lot on the engineering challenges of the machine they were making. The blood samples would spill, which would gum up the mechanical workings of the machine and make a huge mess and contaminate all the other samples. The documentary claimed that Theranos started doing demos where they would pretend to put the blood samples into the machine, but really take it to a lab bench and run the tests there, and then report the results back.
That implies to me that at least some of their tests were actually possible to do. I left the documentary thinking "someone should simply do this again, solve the mechanical/robotics problem, and not lie about it and this could still be a game changing technology". But then I've seen other sources (like your comment here) claiming that the basic science of what they were trying to do was impossible/fraudulent from the beginning.
Which is true?
In the documentary, they focused a lot on the engineering challenges of the machine they were making. The blood samples would spill, which would gum up the mechanical workings of the machine and make a huge mess and contaminate all the other samples. The documentary claimed that Theranos started doing demos where they would pretend to put the blood samples into the machine, but really take it to a lab bench and run the tests there, and then report the results back.
That implies to me that at least some of their tests were actually possible to do. I left the documentary thinking "someone should simply do this again, solve the mechanical/robotics problem, and not lie about it and this could still be a game changing technology". But then I've seen other sources (like your comment here) claiming that the basic science of what they were trying to do was impossible/fraudulent from the beginning.
Which is true?
There is room for improvement in testing technology and processes.
But not to the extent of "One drop of blood from your finger can provide accurate tests on 26 different types of tests" Especially when some of those tests are only accurate with a large sample of blood
But not to the extent of "One drop of blood from your finger can provide accurate tests on 26 different types of tests" Especially when some of those tests are only accurate with a large sample of blood
I'm always reminded of this when Theranos comes up. Years ago I was in the hospital, they wouldn't let me out until a blood test showed some numbers that made them feel better. I asked about how the one test worked. The nurse would come in and draw a tube of blood (I forget the volume, but if you've had your blood drawn for a test, a typical tube sized - 10's of mL). And then that'd go down to the lab and be mixed with reagents and a tech would look in a microscope slide and count things. Then they'd reverse the math and turn the things they counted into a concentration of stuff in my blood. That's the number the doctor looked at. So when I worked through the process, and deduced that what the lab tech counted was on average 4 particles of interest. And since I was an obnoxious grad student, I brought up shot noise and said that means there's a 50% error in the measurement and that the doctor should discharge me. Of course, he said that even with a 50% buffer, the numbers were too low for him to feel comfortable.
Long story, but they needed an entire tube of my blood to count 4 particles in the microscope. A drop of blood would not have enough things in it to count. Real life is discrete, and often we need a big sample just to get enough things to count.
That's why I always though Theranos was a fraud.
Long story, but they needed an entire tube of my blood to count 4 particles in the microscope. A drop of blood would not have enough things in it to count. Real life is discrete, and often we need a big sample just to get enough things to count.
That's why I always though Theranos was a fraud.
Were they the first ones to do it?
They failed on several fronts
1. The basic equipment they built simply didn't work at all
2. Their workaround trick of getting a finger prick blood draw, dilute it with water and run the test on a Qwest machine produced wrong results.
3. The fundamental approach itself was unviable. You can't get reliable results from a finger prick.
Theranos failed on all fronts except being able to attract investments from non experts.
1. The basic equipment they built simply didn't work at all
2. Their workaround trick of getting a finger prick blood draw, dilute it with water and run the test on a Qwest machine produced wrong results.
3. The fundamental approach itself was unviable. You can't get reliable results from a finger prick.
Theranos failed on all fronts except being able to attract investments from non experts.
So, the first issue (detection) comes down to the detection of a target gene at some minimal level using polymerase chain reaction or perhaps an enzyme-binding assay or something like that. These molecular biology techniques can actually detect even a few copies of a gene (i.e. a virus) in a sample tube, so a finger prick could plausibly work for this kind of detection goal. The main thing to keep in mind is the difficultly of quantitative measurements at these low levels. For example, I wouldn't be easily able to tell if my sample had ten copies of the gene or a hundred copies of the gene, certainly not cheaply and efficiently.
But, the blood chemistry tests - the second, quantitative goal - are far worse. Those are supposed to produce results with error bars, I'd guess at least +/- 10% accuracy is what you want (I'm not a doctor or nurse). But if you have a finger prick, well, what about evaporation of liquid volume? You can see it happening on a really good scale, 10 ul will evaporate away pretty fast. Also, is a finger prick (capillary) going to be like blood from a vein?
The problem is that precision with tiny volumes is possible, but requires massive preparation and dedicated professionals and certainly doesn't scale easily. Any such system would have to be calibrated daily, tested (with known standards), then samples would be run, then you test it again... Let alone cross contamination and about a hundred other problems. Furthermore - 26 different quantitative tests at once???
So, that's the kind of thing I meant when talking about the easier detection goal (where 26 pos/neg 'is the gene there' tests on a single sample might be plausible) vs. the much harder quantitative goal.
But, the blood chemistry tests - the second, quantitative goal - are far worse. Those are supposed to produce results with error bars, I'd guess at least +/- 10% accuracy is what you want (I'm not a doctor or nurse). But if you have a finger prick, well, what about evaporation of liquid volume? You can see it happening on a really good scale, 10 ul will evaporate away pretty fast. Also, is a finger prick (capillary) going to be like blood from a vein?
The problem is that precision with tiny volumes is possible, but requires massive preparation and dedicated professionals and certainly doesn't scale easily. Any such system would have to be calibrated daily, tested (with known standards), then samples would be run, then you test it again... Let alone cross contamination and about a hundred other problems. Furthermore - 26 different quantitative tests at once???
So, that's the kind of thing I meant when talking about the easier detection goal (where 26 pos/neg 'is the gene there' tests on a single sample might be plausible) vs. the much harder quantitative goal.
Never ever forget that anyone who said Holmes was a fraud was screamed down by accusations of sexism and toxic masculinity.
Even now, people are still doing it! NYT ran an op-ed piece from a woman VC partner (who had a BS sexual harassment case got shot down in court) basically saying "yeah but what about all the male CEOs that don't get punished? You're sexist if you don't punish them!" as if Holmes is receiving any punishment herself. The delusional headcanons that some people view the world through...
https://www.nytimes.com/2021/09/15/opinion/elizabeth-holmes-...
https://www.nytimes.com/2021/09/15/opinion/elizabeth-holmes-...
> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.
What's interesting with Theranos is the composition of it's board... It's exclusively older men with little to no expertise on the subject matter (Channing Robertson might be an exception to the latter rule). Not a single rising female Silicon Valley executive or professor was invited to join, which is surprising considering how much she was advocating for more women in SV.
Maybe she knew that female executives and founders wouldn't have the same reaction to a wide eyed conventionally attractive 19 years old blonde as the 40+ years old men she was used to "deal" with...
I mean, we all know how Marissa Mayer got the job...
What's interesting with Theranos is the composition of it's board... It's exclusively older men with little to no expertise on the subject matter (Channing Robertson might be an exception to the latter rule). Not a single rising female Silicon Valley executive or professor was invited to join, which is surprising considering how much she was advocating for more women in SV.
Maybe she knew that female executives and founders wouldn't have the same reaction to a wide eyed conventionally attractive 19 years old blonde as the 40+ years old men she was used to "deal" with...
I mean, we all know how Marissa Mayer got the job...
> I mean, we all know how Marissa Mayer got the job...
Honestly, how? Charm is one thing but some people might consider other more physical means. I'm not familiar with any story but I never payed much attention to Marissa Mayer's carrier to be frank.
Honestly, how? Charm is one thing but some people might consider other more physical means. I'm not familiar with any story but I never payed much attention to Marissa Mayer's carrier to be frank.
> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.
If you look at the investors, with few exceptions, they were _not_ sophisticated VC firms with experience in the area. Most of them were, for want of a better classification, elderly rich people. This should probably, in retrospect, have been a huge red flag.
If you look at the investors, with few exceptions, they were _not_ sophisticated VC firms with experience in the area. Most of them were, for want of a better classification, elderly rich people. This should probably, in retrospect, have been a huge red flag.
Why did Theranos insist on using 'a single drop of blood.' Why not be able to run a normal blood sample through an unprecedentedly compact form factor testing unit. Wouldn't that be good enough?
(a) Holmes seemed to be obsessed with this due to a personal phobia of venous blood draws (personal quirks are a surprisingly common driver of weird decisions in Silicon Valley-ish companies; the fact that small low capacity vehicles are used in Boring Company tunnels seems to be down to Musk's phobia of public transport, for instance).
(b) The original idea was that a patient would have one of these things _in their house_; a patient can't reasonably do a venous blood draw on themselves, but they can do a finger prick. There are some real working tests that work this way for this reason; HIV self-tests are normally finger-prick tests, say.
But by the time they'd repositioned as "the machines are in a pharmacy, or maybe a central lab", yeah, it made no sense anymore.
(b) The original idea was that a patient would have one of these things _in their house_; a patient can't reasonably do a venous blood draw on themselves, but they can do a finger prick. There are some real working tests that work this way for this reason; HIV self-tests are normally finger-prick tests, say.
But by the time they'd repositioned as "the machines are in a pharmacy, or maybe a central lab", yeah, it made no sense anymore.
I totally agree with this, and I'm still sad that what Theranos was planning to do with Walgreens was canned.
I mean, if I could walk into a Walgreens, choose from a menu of lots of different tests at transparent, low prices (IIRC a lot of their prices were great), get a normal, standard venous blood draw, and then have that draw analyzed while I finishes shopping at Walgreens so I could get my results in 15-20 minutes, I think that would be a fantastic experience.
Is there some reason the above is not possible or viable?
I mean, if I could walk into a Walgreens, choose from a menu of lots of different tests at transparent, low prices (IIRC a lot of their prices were great), get a normal, standard venous blood draw, and then have that draw analyzed while I finishes shopping at Walgreens so I could get my results in 15-20 minutes, I think that would be a fantastic experience.
Is there some reason the above is not possible or viable?
In industry terms? Absolutely. In terms of getting a billion dollar evaluation for being a disruptive start up? Probably not.
Also, the former seems to be a harder problem to solve than the latter.
Also, the former seems to be a harder problem to solve than the latter.
Maybe it's something like Elon Musk and his "no LIDAR" thing.
Why using small amounts of blood important?
Are there some tests that need extremely large amounts of blood that the patient cannot provide? Or is the point to improve the patient's experience?
When I give blood for testing, there is no difference in my experience as a patient, however many vials are taken, it just takes a bit longer. What am I missing?
Are there some tests that need extremely large amounts of blood that the patient cannot provide? Or is the point to improve the patient's experience?
When I give blood for testing, there is no difference in my experience as a patient, however many vials are taken, it just takes a bit longer. What am I missing?
The argument Theranos gave is that it would allow collecting blood from a fingerprick (which would not require a trained professional, and because people are afraid of needles).
> The crazy thing about Theranos is that so many people with experience in microfluidics (developed mainly for DNA sequencing although there are other uses) knew that their claims were impossible, technologically speaking.
I'd push back on this a bit - not because it's wrong in the case of Theranos, but because it's often wrong in the general case. A lot of the time 'industry experts' go on about how some new approach is impossible for X reason and they're often wrong.
Tesla is a good example of this (some people are still saying EVs can't work even today).
You really have to get in the weeds yourself to understand whether something is possible or not rather than deferring to others most of the time. I do agree though that her investors didn't do that.
She was also able to get famous people invested and on her board which I think compounded things.
I'd push back on this a bit - not because it's wrong in the case of Theranos, but because it's often wrong in the general case. A lot of the time 'industry experts' go on about how some new approach is impossible for X reason and they're often wrong.
Tesla is a good example of this (some people are still saying EVs can't work even today).
You really have to get in the weeds yourself to understand whether something is possible or not rather than deferring to others most of the time. I do agree though that her investors didn't do that.
She was also able to get famous people invested and on her board which I think compounded things.
Elizabeth Holmes went out of her way to find non expert investors. Infact, I don't think any silicon valley VCs made any significant investments in Theranos.
I wouldn't say all train professionals knew this. I talked to doctors about Theranos and they were impressed by them and were bullish. It may be they didn't look too much into it.
Context: I was approached by a recruiter and I couldn't understand how Theranos distinguished itself from other labs or get any data when I tried to do diligence on their claims.
Context: I was approached by a recruiter and I couldn't understand how Theranos distinguished itself from other labs or get any data when I tried to do diligence on their claims.
I think a similar situation happened with UBeam. Electrical engineers insisted it would be impossible to charge a phone the way they were claiming. But the “what if” dream made it so nobody wanted to listen to them.
it highlights the abject trust rich people place in certain friend of a friend associations. same thing happened with bernie madoff.
encryptluks2(6)
The problem is that none of this will work against her defense, that she was not of sane state of mind at the time.
Western society is way too tolerant of certain kinds of mental illness, such as sociopathy/psychopathy, and intolerant of others (e.g. anxiety/depression).
Very succinct statement of the issue.
Not only is Western society too tolerant of sociopathy, corporate structures tend to actively filter to top ranks those with such behaviors (just spend 5min reading Glassdoor or any employment-related NH topic...).
Not only is Western society too tolerant of sociopathy, corporate structures tend to actively filter to top ranks those with such behaviors (just spend 5min reading Glassdoor or any employment-related NH topic...).
I have a pet theory on this that is entirely based on my own biased views: societies which are communal, whether around a family, village, tribe, etc..., tend to keep sociopathic tendencies in check. Either the sociopathic individual is exiled from the group, or at least identified and prevented from harming the collective. If the larger structure is still made up of smaller (at most 100s of individuals) communities, exiles risk becoming pariahs and without any societal support, it becomes next to impossible to strive (or even survive).
In highly individualistic societies, a lot of the most personal checks and balances are removed. You no longer have a tight-knit family that imposes some moral framework and behavior on it's members (good or bad).
Having said that, I'm not sure whether there are any truly communal societies left in the modern world. I suppose some isolated, rural communities could qualify, but pretty much all modern countries are now individualistic. Family values are slightly more pronounced in the East/far-East, but not to a degree that matters. Being successful still often trumps being a decent human being.
In highly individualistic societies, a lot of the most personal checks and balances are removed. You no longer have a tight-knit family that imposes some moral framework and behavior on it's members (good or bad).
Having said that, I'm not sure whether there are any truly communal societies left in the modern world. I suppose some isolated, rural communities could qualify, but pretty much all modern countries are now individualistic. Family values are slightly more pronounced in the East/far-East, but not to a degree that matters. Being successful still often trumps being a decent human being.
Indeed! The ability to make a mess then move on to a new crowd to abuse/scam/etc. without your reputation fully following you, is hugely enabling for sociopaths.
I thought her defense was "we tried real hard and it just didn't work, is that a crime?" I guess "also, I'm nuts" adds some spice to the mix.
That defense is not likely to work.
The reason she's using it is because the evidence is so overwhelming, there are no other cards to play.
The reason she's using it is because the evidence is so overwhelming, there are no other cards to play.
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Her actual defense is going to be: "That bad man made me do it"
Cherchez l'homme!
Exactly, "I did do it. But that bad man made me do it."
Wait, that's not her defense from what I've seen. Her defense was that she basically tried her best, was doing actual R&D, there were tech problems, she made some blunders, but failure is not criminal.
Tech problems is a bit of an understatement.
she's going to say Balwani was abusing her emotionally and sexually, which impaired her sense of mind.
https://www.npr.org/2021/08/28/1031961327/elizabeth-holmes-t...
https://www.npr.org/2021/08/28/1031961327/elizabeth-holmes-t...
Any lawyers here - is the general consensus that she is going to jail for a long time?
Not a lawyer or legal expert. But American juries are generally unpredictable and overwhelming evidence doesn't always decide cases (look at the O.J Simpson trial or more recently Bill Cosby or the first Epstein case). I think the general consensus is that there's a lot of damning evidence against her and there's a good chance she'll be found guilty. But a lot depends on how effective her defense is in swaying the jury and a lot of technicalities. Plus there's the baby/new mother factor that might influence her sentencing if not the jury verdict
There wasn't overwhelming evidence in the Cosby case, which is precisely why his conviction was overturned. He was convicted based on testimony he was forced to give against himself in a civil trial where he was not allowed to exercise his fifth amendment right against self-incrimination. The previous DA specifically said there wasn't enough evidence to convict Cosby, which is both why he never pursued charges and why Cosby was forced to testify against himself (without the threat of criminal indictment, he didn't have the right against self-incrimination on the civil suit).
You are technically correct but I don't see what the contradiction is. You could say that his testimony was 'overwhelming evidence' (he practically admitted to doing what he was accused of). Yes, improperly obtained and inadmissible, hence the 'technicalities' part. My point is that even an open confession existing somewhere is not a guarantee of conviction or a long prison sentence.
If the exclusion of a single piece of evidence whose use in a trial was unconstitutional meant there wasn't enough evidence to convict, I would say there wasn't 'overwhelming evidence'.
I've followed the case fairly closely. I'm not aware that this is part of her defense. Where did you get this from?
https://www.npr.org/2021/08/28/1031961327/elizabeth-holmes-t...
Basically: yes I did do this, but I was abused by Balwani and as a result I was in an impaired state of mind.
Basically: yes I did do this, but I was abused by Balwani and as a result I was in an impaired state of mind.
Those are not exactly the same thing. And it would undercut her current defense which is "I was just doing my best and we failed and business failure isn't a crime"
She doesn't have a current defense in the court. The defense in court is all that matters in the trial, not media. The prosecution is presenting the evidence right now, she will have her turn afterwards.
"She doesn't have a current defense in the court.The defense in court is all that matters in the trial, not media"
Huh? I don't even know what this means. According to you her defense is "that she was not of sane state of mind at the time". Maybe you can post another npr link that explains what you mean by no current defense in court.
Huh? I don't even know what this means. According to you her defense is "that she was not of sane state of mind at the time". Maybe you can post another npr link that explains what you mean by no current defense in court.
The "Balwani abused me and I had diminished mental capacity" is her planned defense in court as stated in the NRP article.
At the trial right now (in court), her lawyers hasn't presented that defense yet. Right now the trial is in the first step, the prosecution/state presenting their case. Once the prosecution/state rests their case, the defense begin present their case (at this point they will present their "Balwami abused me argument".
At the trial right now (in court), her lawyers hasn't presented that defense yet. Right now the trial is in the first step, the prosecution/state presenting their case. Once the prosecution/state rests their case, the defense begin present their case (at this point they will present their "Balwami abused me argument".
What are they basing that on? Her turtleneck was too tight?
That's traditionally a very difficult defense; it's often tried as a Hail Mary, but rarely succeeds.
The modern wisdom, "fake it till you make it", requires you to make it, otherwise you'll pay for lying to us.
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I'm curious, does this case get so much publicity because it touches upon all the tropes of Silicon Valley? 'Fake it till you make it', 'move fast and break things', 'disrupt the markets', etc.
IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets, but when it comes to life and safety - bad news.
IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets, but when it comes to life and safety - bad news.
> IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets, but when it comes to life and safety - bad news.
She's not on trial for defrauding patients and putting their life and safety at risk. She's on trial for defrauding investors and putting their money at risk.
She's not on trial for defrauding patients and putting their life and safety at risk. She's on trial for defrauding investors and putting their money at risk.
she s also on trial for defrauding doctors and patients
It gets a lot of attention because VCs were publicly conned.
> IMHO, this business model is fine when the only things at risk are venture capital [...]
Isn't there always more risk than just "venture capital" to this "move fast and break things" model?
Take Uber for an example, sure, they've burned so much cash trying to circumvent laws, but not only have they burned cash, they have also changed economies around the world by burning this cash and trying to disrupt things. Many normal taxi drivers are now without jobs, and suddenly the risk seems bigger than just venture capital.
Same with AirBnb and changing the hospitality sector, and many other examples where it seems there is just cash being burned, but that burn also have an outside effect bigger than just the burn.
Isn't there always more risk than just "venture capital" to this "move fast and break things" model?
Take Uber for an example, sure, they've burned so much cash trying to circumvent laws, but not only have they burned cash, they have also changed economies around the world by burning this cash and trying to disrupt things. Many normal taxi drivers are now without jobs, and suddenly the risk seems bigger than just venture capital.
Same with AirBnb and changing the hospitality sector, and many other examples where it seems there is just cash being burned, but that burn also have an outside effect bigger than just the burn.
Yes, organised crime (because that is what you are describing) has big knock-on effects on the rest of society. That is why we treat organised crime the way we normally do. The fact that these corporations were allowed abroad and left to do what they did highlights that the legal system (meant in the first place to protect citizens) has been broken. That that doesn't get looked at harder and seen for what it is is truly tragic.
Totally agree. I can't stand Uber and AirBnb because they mess with people in a bad way. Their sins are well documented. I'm fine with investors losing some $$$ on companies like Juicero. Capitalism needs success and failure to be effective and the death of $699 juice squeezers are an acceptable casualty.
> Many normal taxi drivers are now without jobs, and suddenly the risk seems bigger than just venture capital.
I've lost count of how many times I call an Uber and I end up getting a taxi. I guess IMMV but from my vantage point I'm not sure how realistic is the "taxi drivers are getting fired" take.
One aspect where Uber thankfully did disrupted the taxi industry is that now customers can flag bad taxi drivers for providing a bad customer experience, and in the process push out all the bad apples.
I've lost count of how many times I call an Uber and I end up getting a taxi. I guess IMMV but from my vantage point I'm not sure how realistic is the "taxi drivers are getting fired" take.
One aspect where Uber thankfully did disrupted the taxi industry is that now customers can flag bad taxi drivers for providing a bad customer experience, and in the process push out all the bad apples.
There are two possible "fake it until you make it" levels going on here. Say you draw a regular sample of blood and run tests with competitor's products until yours work. Tests are real, but everyone thinks your tests are doing the work. That's one way. The other way is you take a drop of blood and produce unreliable results.
Generally "fake it until you make it" has some delivery of the actual product, even if it costs more to produce than it generates in revenue. Or it requires human execution of something which appears to be automated.
The Theranos case is interesting because it straight up didn't work. It definitely crossed over from "getting something done differently than it appears" into "straight up fabrication, intimidation, lies, and buying off the politically influential."
Look at the board for the simple reason it gets a lot of attention (beside hitting all the tropes). Short on medical, long on political influence.
Generally "fake it until you make it" has some delivery of the actual product, even if it costs more to produce than it generates in revenue. Or it requires human execution of something which appears to be automated.
The Theranos case is interesting because it straight up didn't work. It definitely crossed over from "getting something done differently than it appears" into "straight up fabrication, intimidation, lies, and buying off the politically influential."
Look at the board for the simple reason it gets a lot of attention (beside hitting all the tropes). Short on medical, long on political influence.
> I'm curious, does this case get so much publicity because it touches upon all the tropes of Silicon Valley?
I think people are so used to being lied to by companies that they’re really happy to see it come back on someone. When’s the last time you saw a press release that wasn’t spun to contort the truth as far as possible? We’re so used to corporate communication being 99% polished turds and, while we accept it, we hate it. Just like all the experts calling out their stuff as impossible, we all know we’re being lied to.
Finally, someone was caught being full of shit in a way that makes them liable.
> IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets
I think this business model is normal when it’s other things at risk, but people are enthusiastic to see comeuppance because they’re so sick of this being business as usual.
I think people are so used to being lied to by companies that they’re really happy to see it come back on someone. When’s the last time you saw a press release that wasn’t spun to contort the truth as far as possible? We’re so used to corporate communication being 99% polished turds and, while we accept it, we hate it. Just like all the experts calling out their stuff as impossible, we all know we’re being lied to.
Finally, someone was caught being full of shit in a way that makes them liable.
> IMHO, this business model is fine when the only things at risk are venture capital and you're trying to sell more widgets
I think this business model is normal when it’s other things at risk, but people are enthusiastic to see comeuppance because they’re so sick of this being business as usual.
All of those things, but also I think a factor we all underestimate is Elizabeth herself has this super creepy presence in nearly every photo and video where she makes an appearance -- something just seems "off", in an almost uncanny valley sort of way, and confirmation that something is in fact "off" in the form of an actual scandal, I think, might satisfy some deep emotion that drove views to the original news stories that showed her picture. Those pictures stick with you, even sans-scandal.
Can't wait to see who they cast in the inevitable Netflix series.
Can't wait to see who they cast in the inevitable Netflix series.
>I think a factor we all underestimate is Elizabeth herself has this super creepy presence in nearly every photo and video where she makes an appearance -- something just seems "off", in an almost uncanny valley sort of way, and confirmation that something is in fact "off" in the form of an actual scandal
Got to learn how to recognize the antisocial ones. This is how you figure that out.
You can fake a lot, but the involuntary eye muscles don't move properly, so you can see it in the eyes.
Some use that to avoid certain people. Some use it to find the people they are looking for. The words that are said don't matter as much. You can just look them in the eyes.
Got to learn how to recognize the antisocial ones. This is how you figure that out.
You can fake a lot, but the involuntary eye muscles don't move properly, so you can see it in the eyes.
Some use that to avoid certain people. Some use it to find the people they are looking for. The words that are said don't matter as much. You can just look them in the eyes.
This goes way beyond "fake it till you make it" - its not just overhyping tech - its active and deliberate deception in a product where you are playing with peoples lives
Holmes still made it - she's still rich and probably will serve minimal (if any) jail time.
And in a few years everything will be forgotten. She will do a little philanthropy and be a hero like Michael Milken.
I am actually very, very surprised that they had lab equipment?
There was a second room where they led the inspectors with true lab eqpt while the other had the inaccurate machines (according to the book)
Are you sure it wasn't the other way around?
Weren't they pretending to operate their own equipment while the real equipment was 'behind the curtain' ?
Weren't they pretending to operate their own equipment while the real equipment was 'behind the curtain' ?
Depends on what's being audited. For investors, you want to show a room of gear that other companies don't have. For certification of medical equipment, you want to demonstrate that your process works.
Maybe I forgot, but I think they were operating both.
Yeah, that's what I remember too. They had the Siemens equipment in a back room that they used to run the real tests on, but pretended that they were using their own tech for these tests.
BioCurious received some very nice lab equipment for free when Theranos shutdown: https://biocurious.org/
If you haven't read the book "Bad Blood" by John Carreyrou I think you should give it a try. I think it's really worth it.
And the new podcast that Carreyrou is doing for the most updated info on the evidence and trial, “Bad Blood: The Final Chapter”.
Thanks for this! Just finished listening to the audiobook and was itching for an update by Carreyrou. There's another podcast, The Drop Out: Elizabeth Holmes on Trial that is also covering the trial.
Seconded. Besides being absolutely stock full of incredible/hilarious inside details about Theranos's rise and fall, it's one of the best books I've ever read about the investigative journalism process. Carreyrou goes out of his way to credit the obscure blog author who tipped him off to Theranos.
...and he details how the Wall Street Journal was pressured by very powerful people / organizations and they fully stood by their journalists. Very surprising and encouraging.
> “Passing,” Christian told him, “is not an option.” In a later email exchange between Christian and Elizabeth, she told her brother, “You handled this excellently.”
> In a separate reply, Balwani was dismissive of Rosendorff’s complaints and later emailed Holmes, urging her to fire him rather than let him finish his last few days. “We need to respond to him now and cut him Monday.”
The worst management.
> In a separate reply, Balwani was dismissive of Rosendorff’s complaints and later emailed Holmes, urging her to fire him rather than let him finish his last few days. “We need to respond to him now and cut him Monday.”
The worst management.
A free way [1] to track the trial, at least some of it. I'm hoping to go to at least one day of it.
I'm sure the actual court reporter trial transcripts will be public at some point (does anyone know?), but they're not in [1].
If you are drawing comparisons between her and the rest of Silicon Valley, you are missing one rather important fact: hard sciences are hard. We have it easy in computers.
There are government agencies involved in testing what she did, and people's health is at stake. Just imagine that some bureaucrat was reading every line of code you wrote.
[1] https://www.courtlistener.com/docket/7185174/united-states-v...
I'm sure the actual court reporter trial transcripts will be public at some point (does anyone know?), but they're not in [1].
If you are drawing comparisons between her and the rest of Silicon Valley, you are missing one rather important fact: hard sciences are hard. We have it easy in computers.
There are government agencies involved in testing what she did, and people's health is at stake. Just imagine that some bureaucrat was reading every line of code you wrote.
[1] https://www.courtlistener.com/docket/7185174/united-states-v...
Thought you'd find this [1] interesting. Carreyrou is a journalist who is part of the story, in fact did heroic work breaking the story. At one time at a Theranos company meeting, they chanted "F** you, Carreyrou!"
I'd love to hear him testify about how they pulled out all the stops to try and suppress his WSJ stories.
[1] https://storage.courtlistener.com/recap/gov.uscourts.cand.32...
I'd love to hear him testify about how they pulled out all the stops to try and suppress his WSJ stories.
[1] https://storage.courtlistener.com/recap/gov.uscourts.cand.32...
I recommend the "Bad Blood: The Final Chapter" podcast by John Carreyrou. He's the journalist who broke the story and the podcast goes into some detail about the history and also talks about what is going on now.
I recommend the video of her dancing to "Can't Touch This": https://www.youtube.com/watch?v=GrT0jKOhnD4
and the video of her using her real, non-deep, voice: https://youtu.be/PjnsYz-xdOI?t=55
and the video of her using her real, non-deep, voice: https://youtu.be/PjnsYz-xdOI?t=55
I despise Holmes, but using a video of her dancing as an argument against her seems like an ad homeniem.
Or read his book! It's fabulous.
Do both! I loved the book and am following the podcast. There's a lot of new commentary about the trial and the material that came out during discovery (which wasn't available to the author when he wrote the book).
Yeah, I've somehow fallen out of the habit of reading books. Need to get back in :)
say what you want about her but if I knew nothing about this company and someone told me the CEO got charged with a crime and she got pregnant after charges were filed.
I'd almost think she is guilty and trying to get a lesser sentence because of having a kid.
As a sane person the last thing I want to do is bring a child into a world where a parent could be in jail for 20 years.
I'd almost think she is guilty and trying to get a lesser sentence because of having a kid.
As a sane person the last thing I want to do is bring a child into a world where a parent could be in jail for 20 years.
The famous picture of her taking reporters into the machine shop is one example.
“Touring the machine shop” is an old trick when you want to waste time and not show anyone anything. Technically naive people don’t realize that modern machines each have a computer attached to them, and there is little proprietary in most shops.
“Touring the machine shop” is an old trick when you want to waste time and not show anyone anything. Technically naive people don’t realize that modern machines each have a computer attached to them, and there is little proprietary in most shops.
I think it also makes for compelling pictures, which was her primary goal at all times: marketing.
Beyond all the fraud, lying, and deceit, the real shame is the lost opportunity and the associated colossal mismanagement. Theranos was able to marshal about a billion dollars with an overarching goal of democratizing access to health data. They basically accomplished nothing. Generating such a concentration of resources for this goal was a notable accomplishment. The subsequent arrogant (and stupid) inability to discern "hard" from "impossible" and adjust their approach to maintain some chance of success to the overarching goal was a grotesque and massive failure.
This one point is misleading:
> while it doesn’t appear that [they] barred inspectors from those rooms, keeping the doors shut certainly made it less likely that they would ask to see what’s inside. Typically during inspections, company employees are supposed to “show inspectors what they asked for,” Rosendorff said.
This one point is unremarkable (at least as stated). When I was in the pharma business I was advised to have a conference room for visitors that was right off the waiting room, so we could have meetings with outsiders (i.e. inspectors) without them having to enter the facility in general. The point wasn’t to cover anything up but just avoid questions.
FWIW we didn’t bother with this —- we didn’t have an “outside” conference room. But that is apparently not that unusual.
State and federal inspectors get to look at anything part of the business. The federal ones can arrive armed! (Though I never saw this, only heard about it)
Everything else I’ve read coming from the trial has been alarming, though I’m not following closely.
> while it doesn’t appear that [they] barred inspectors from those rooms, keeping the doors shut certainly made it less likely that they would ask to see what’s inside. Typically during inspections, company employees are supposed to “show inspectors what they asked for,” Rosendorff said.
This one point is unremarkable (at least as stated). When I was in the pharma business I was advised to have a conference room for visitors that was right off the waiting room, so we could have meetings with outsiders (i.e. inspectors) without them having to enter the facility in general. The point wasn’t to cover anything up but just avoid questions.
FWIW we didn’t bother with this —- we didn’t have an “outside” conference room. But that is apparently not that unusual.
State and federal inspectors get to look at anything part of the business. The federal ones can arrive armed! (Though I never saw this, only heard about it)
Everything else I’ve read coming from the trial has been alarming, though I’m not following closely.
She defrauded investors out of so much money, she deserves at least 10 years in prison imo.
Frankly don't care about the investors, they won't go hungry and they should have known better.
Endangering the lives of ordinary people though - 10 years isn't enough.
Endangering the lives of ordinary people though - 10 years isn't enough.
But the money which was lost investing in Theranos could've been invested in other companies that would actually save the lives of ordinary people the ones that Theranos was suppose to save.
I mean realistically, given the timing, it would probably have been invested in Uber or that iPhone app that was just a "hey" button or something.
There is a documentary on Frontline about cannabis. A guy had a medical marijuana license from one state. Cops in another state find a small amount of marijuana with him. He gets 5 years. Put that in proportion to a possible punishment Holmes may receive.
All that is in the book "Bad Blood".
I know there is “fake it till you make it” but usually these companies have some idea how to get success. But as far as I understand Theranos never had any technology or approach that promised to lead to their goals. They just tried various stuff that never worked and lied about it.
It was more like me starting a company that wants to create a battery with ten times the capacity of current batteries but having no idea how to achieve this so I take in a lot of money and desperately try to figure something out while having no promising insight .
It was more like me starting a company that wants to create a battery with ten times the capacity of current batteries but having no idea how to achieve this so I take in a lot of money and desperately try to figure something out while having no promising insight .
It's a step worse. It's as if you then sold that battery to electric plane manufacturers, really just gave them a standard lithium ion battery, and planes started falling out of the sky. Theranos's broken tech was used on real people and had real consequences.
There's a world of difference between saying "we will do great things" and claiming "we have done great things".
Tyler Schultz and Erika Cheung risked it all. They saved lives by blowing the whistle knowing it could potentially ruin their careers, relationships, financial stability (lawyer fees).
Wait, I thought this was a fake case stemming from structural misogyny!
Working with such small volumes to obtain quantitive estimates of blood chemistry is so implausible, as you are introducing uncontrollable variability - micro-evaporation, even tissue localization issues, I mean all the trained blood chemistry specialists knew this. I worked a little with DNA microfluidics, and it works because it's not quantitative.
Now, what they could have done is just stuck to pos/neg tests, i.e. 'are you infected with this virus or not' which is a lot more plausible as you don't have to meet a quantitative goal, just a detection goal. Also, one-stop STD screening for HIV / herpes / etc. is possible too (I suggested this and someone responded, 'new company name: ClapTrap").
It's really kind of sad, as Theranos might have been able to pull that off (although new management would probably be required), and then they'd have been positioned to do all the COVID testing (which was a major problem in the initial US response).
What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird.