[HN Gopher] Elizabeth Holmes urged employees to hide Theranos' l...
___________________________________________________________________
Elizabeth Holmes urged employees to hide Theranos' lab equipment
from inspectors
Author : samizdis
Score : 251 points
Date : 2021-09-29 14:08 UTC (8 hours ago)
(HTM) web link (arstechnica.com)
(TXT) w3m dump (arstechnica.com)
| gumby wrote:
| 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.
| photochemsyn wrote:
| 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.
|
| 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.
| 908B64B197 wrote:
| > 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...
| [deleted]
| krageon wrote:
| > 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.
| bcrosby95 wrote:
| 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.
| foobarian wrote:
| 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.
| akiselev wrote:
| 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.
| SkyMarshal wrote:
| 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.
| mrweasel wrote:
| 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.
| josefresco wrote:
| > What just amazed me is how gullible all the investors were
|
| You have confused gullibility with willful ignorance.
| comeonseriously wrote:
| > 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?
| makotech222 wrote:
| > 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.
|
| weird, maybe we shouldn't have our economy be decided by the
| whims of private investors.
| MattGaiser wrote:
| 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.
| 908B64B197 wrote:
| > 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.
| pron wrote:
| 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).
| lesuorac wrote:
| 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.
| kube-system wrote:
| 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.
| Hermitian909 wrote:
| 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.
| shadilay wrote:
| 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
| kube-system wrote:
| 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.
| zardo wrote:
| There were definitely no rocket experts claiming rockets
| can't be made out of steel. That's not a new thing.
| hef19898 wrote:
| 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.
| LanceH wrote:
| 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.
| malcolmgreaves wrote:
| The fake it part is calling something full self driving
| when it does anything but that.
| MrGando wrote:
| 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.
| kube-system wrote:
| > "Full Self-Driving Capability $10,000"
|
| ... is listed today as an option when configuring any
| vehicle on tesla.com
| MrGando wrote:
| You're right. I think there's several regulators on it,
| but no one has forced them to rephrase the statement.
| tsimionescu wrote:
| They're charging for "full self-driving" separately from
| the car, so I think it's fair to put it in the same
| bucket.
| kiba wrote:
| 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.
| AlbertCory wrote:
| 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.
| adventured wrote:
| 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.
| sumtechguy wrote:
| The voice pitch thing she was doing was a nice touch too.
| AlbertCory wrote:
| 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.
| overkalix wrote:
| 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).
| darkr wrote:
| 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.
| yawaworht1978 wrote:
| 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.
| sam_lowry_ wrote:
| Not scientific, physical.
| jcrites wrote:
| 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.
| ghaff wrote:
| 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.
| moftz wrote:
| 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.
| jcrites wrote:
| 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.
| bdcravens wrote:
| 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.
| ClumsyPilot wrote:
| 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?
| ufo wrote:
| 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).
| rsynnott wrote:
| > 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.
| fossuser wrote:
| > 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.
| boatsie wrote:
| 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.
| malthaus wrote:
| 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
| ryandrake wrote:
| 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.
| dumbfoundded wrote:
| 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...
| NationalPark wrote:
| 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.
| supperburg wrote:
| Never ever forget that anyone who said Holmes was a fraud was
| screamed down by accusations of sexism and toxic masculinity.
| JohnWhigham wrote:
| _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-...
| dontblink wrote:
| 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.
| munificent wrote:
| _> 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_.
| avalys wrote:
| 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?
| danans wrote:
| Still unfolding, but Lordstown Motors looks like exactly
| that.
|
| https://hindenburgresearch.com/lordstown/
| jborichevskiy wrote:
| Enron, for one
|
| https://en.wikipedia.org/wiki/Enron#Peak_and_decline_of_sto
| c...
| effingwewt wrote:
| uBeam.
| stagger87 wrote:
| MoviePass
| mardifoufs wrote:
| 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
| [deleted]
| [deleted]
| stagger87 wrote:
| I'm pretty sure early investors cashed out in 2017.
| humaniania wrote:
| Oil companies and their suppression of climate change
| science.
| hef19898 wrote:
| 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.
| rsynnott wrote:
| Enron, to some extent.
| ta1234567890 wrote:
| 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...
| codegeek wrote:
| "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.
| MrGando wrote:
| 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.
| codegeek wrote:
| 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.
| MrGando wrote:
| 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.
| Alex3917 wrote:
| > 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.
| edot wrote:
| Agreed. EBITDA in general is hot garbage, but that is
| egregious.
| eli wrote:
| 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.
| supperburg wrote:
| 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.
| junon wrote:
| > 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.
| supperburg wrote:
| 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.
| junon wrote:
| 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.
| supperburg wrote:
| Wow what a substantive and interesting comment. Thanks
| ta1234567890 wrote:
| > 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.
| hef19898 wrote:
| 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!
| supperburg wrote:
| 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.
| varjag wrote:
| There's a bunch of ways to rationally explain the losses
| in any operation. None of them make it profitable.
| ModernMech wrote:
| > 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.
| supperburg wrote:
| > 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
| ModernMech wrote:
| 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?
| dogman144 wrote:
| 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...
| ta1234567890 wrote:
| > 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.
| exogeny wrote:
| 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).
| nosianu wrote:
| 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.
| stickfigure wrote:
| 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
| edot wrote:
| 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.
| mrkramer wrote:
| 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.
| jollybean wrote:
| 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.
| chmsky00 wrote:
| 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...
| mardifoufs wrote:
| 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...
| lizdax wrote:
| 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-b018-3ef
| 8794b1...
| kingTug wrote:
| Robinhood
| michael1999 wrote:
| Groupon.
| guiriduro wrote:
| Most, if not all SPACs.
| cryptica wrote:
| 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...
| Radim wrote:
| 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.
| cryptica wrote:
| 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.
| spaceflunky wrote:
| This sounds plausible, but as someone else said, has this
| ever been proven to be the case? What are some good examples?
| olalonde wrote:
| 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?
| akiselev wrote:
| _> 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).
| gruez wrote:
| >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.
| ..
| aj7 wrote:
| 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.
| jacinabox wrote:
| 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?
| hef19898 wrote:
| 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.
| Ajay-p wrote:
| 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.
| robertlagrant wrote:
| > 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.
| pessimizer wrote:
| 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.
| hef19898 wrote:
| 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.
| sjg007 wrote:
| 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.
| random314 wrote:
| 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.
| misiti3780 wrote:
| 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.
| nitrogen wrote:
| 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.
| robertlagrant wrote:
| 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.
| adolph wrote:
| _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...
| nitrogen wrote:
| 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.
| InitialLastName wrote:
| 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.
| jbay808 wrote:
| 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.
| misiti3780 wrote:
| yes, but it was not happening in March 2020 in the US for a
| variety of reasons.
| cactus2093 wrote:
| 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?
| random314 wrote:
| 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.
| gitfan86 wrote:
| 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
| michaelrpeskin wrote:
| 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.
| cblconfederate wrote:
| Were they the first ones to do it?
| mrkramer wrote:
| She defrauded investors out of so much money, she deserves at
| least 10 years in prison imo.
| spaetzleesser wrote:
| 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.
| danjac wrote:
| 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.
| mrkramer wrote:
| 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.
| rsynnott wrote:
| 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.
| spaetzleesser wrote:
| 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 .
| rsynnott wrote:
| 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.
| aj7 wrote:
| 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.
| fullshark wrote:
| I think it also makes for compelling pictures, which was her
| primary goal at all times: marketing.
| AlbertCory wrote:
| 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...
| bryanrasmussen wrote:
| I am actually very, very surprised that they had lab equipment?
| throwoutway wrote:
| 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)
| the-dude wrote:
| 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' ?
| moogly wrote:
| 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.
| throwoutway wrote:
| Maybe I forgot, but I think they were operating both.
| lmkg wrote:
| 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.
| tito wrote:
| BioCurious received some very nice lab equipment for free when
| Theranos shutdown: https://biocurious.org/
| louwrentius wrote:
| 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.
| danso wrote:
| 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.
| FloayYerBoat wrote:
| ...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.
| philg_jr wrote:
| And the new podcast that Carreyrou is doing for the most
| updated info on the evidence and trial, "Bad Blood: The Final
| Chapter".
| callistus wrote:
| 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.
| curtis3389 wrote:
| > "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.
| Animats wrote:
| All that is in the book "Bad Blood".
| dev_tty01 wrote:
| 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.
| tushar-r wrote:
| 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.
| fullshark wrote:
| Or read his book! It's fabulous.
| paxys wrote:
| 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).
| carabiner wrote:
| 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
| ipsum2 wrote:
| I despise Holmes, but using a video of her dancing as an
| argument against her seems like an ad homeniem.
| jnewman23 wrote:
| Wait, I thought this was a fake case stemming from structural
| misogyny!
| encryptluks2 wrote:
| If anyone truly deserves a very long prison sentence it is
| Elizabeth Holmes. I think we're about to confirm what we've
| always known and that has been apparent since the start of this
| case. That rich white people, even if they got their money by
| taking advantage of others are pretty immune from harsh
| punishment in the criminal justice system.
| danso wrote:
| Why do you think it's apparent that this case in particular
| will reaffirm that rich white people "are pretty immune from
| harsh punishment in the criminal justice system"? I mean I
| don't argue that the wealthy _often_ escape justice, but why
| would you think the Theranos case is evidence of that? It 's
| literally at trial right now, which is a very, very bad
| scenario for Holmes. The vast majority of cases (including ones
| with a guilty plea) don't go to trial.
| stickfigure wrote:
| Hold your outrage, the show's not over yet.
| thehappypm wrote:
| I kinda disagree. Sure, she was not honest to investors. But
| who cares? these investors are billionaires trying to make a
| quick buck. The faulty equipment in actual pharmacies is
| problematic, but I can actually see how prototypes out in the
| wild is a good thing.
| jjulius wrote:
| >Sure, she was not honest to investors.
|
| ... or the businesses that purchased the machines, and every
| average person who got tested with those machines and put
| their faith in the results, all because she was dishonest.
|
| This is the healthcare industry we're speaking of - it's not
| just investors at stake here, it's everyone's _health_ that
| she put at stake for the sake of getting herself rich.
|
| Edit: Regarding prototypes in the wild; given that this is
| healthcare, I don't mind prototypes being used _as long as
| the unknown accuracy of the devices is clearly communicated
| before they are used, and everyone getting a test understands
| that they 're part of a clinical trial_. This was absolutely
| not the case.
| thehappypm wrote:
| I agree that the prototypes in the wild was done
| improperly. If it's a prototype used for data gathering
| with a big "these are prototypes!" waiver, then that's one
| thing. I'm not sure how they were positioned in the stores
| they were placed in, if they were marketed as a 100%
| accuracy miracle box or an up-and-coming technology that
| still has to have kinks worked out. In either case I'm
| struggling that this is jail time criminal; I think at best
| it's a civil issue.
| jjulius wrote:
| We'll have to agree to disagree here. To me, with the
| level of fraud she engaged in in every area of her
| company, and the fact that that fraud impacted the
| healthcare decisions of individuals who used that test,
| that is a criminal issue.
|
| She was fucking around with the actual health of people
| for her own financial gain.
| chollida1 wrote:
| Well there are stories of people who made actual medical
| decisions from the faulty machines she produced.
|
| I'm guessing everyone who made medical decisions based on her
| faulty machines cares a great deal.
|
| How can you have so little empathy for the everyday people
| caught up in this
| thehappypm wrote:
| The faulty equipment in actual pharmacies is problematic,
| but I can actually see how prototypes out in the wild is a
| good thing.
| dustintrex wrote:
| Not being honest to investors is one thing. _Knowingly_
| peddling faulty lab results to consumers making important
| medical decisions based on the results _and_ unaware that
| they were pawns in this game is quite different.
|
| This is what makes the Theranos case qualitatively different
| from (say) WeWork, and why she's facing criminal charges. You
| buy office space from WeWork, you get exactly what you pay
| for, even if there were insane shenanigans going on in
| investorland. You buy a lab test from Theranos, you're
| getting essentially fake results and risking your health on
| it.
| thehappypm wrote:
| What I'm struggling with is how this is criminal.
|
| Like, there are rapid COVID tests out there. They're
| marketed as accurate. Yet everyone knows they're not
| foolproof. If I got a positive rapid test, the first thing
| I'd do is go get a PCR test.
|
| With these Theranos lab tests, it's honestly (to me) a
| similar thing. If I'm a startup trying to make a cheap HIV
| test, and I know it's not perfect, it's wrong sometimes,
| does that make me a criminal for wanting to get real-world
| users to use my product? Isn't it more of a regulatory
| oversight if people are making medical decisions based on
| new and imperfect tech?
| rspeele wrote:
| Depends strongly on how your represent the accuracy of
| your test to those using it. If you are up front about
| the level of accuracy it should be fine.
|
| But my limited understanding of this case is that the
| Edison machine was so inaccurate as to be near useless.
| So if customers had been informed about how bad it was,
| they would not have chosen to use it.
| akshayB wrote:
| I can't recall last time a C-level company executive get into
| trouble for using deceptive tactics, every S&P500 company does
| this to some extent. When they get caught, in majority of cases
| it is a gentle slap on the wrist or given more of a timeout and
| reallocation of their position. Also unfortunately using public
| money and delivering a bad product is not a criminal offense,
| more like being sloppy at what you do. With big lawyers
| involved she might get sometime in a fancy hotel like prison or
| some restrictions on trading stock or fundraising.
| smart_creature wrote:
| She didn't just "using public money and delivering a bad
| product". She lied to investors and regulators. That is
| called fraud and it is definitely a criminal offense. Her
| defense rests on proving she did not do it knowingly or with
| the intention to defraud. Nevertheless, yes she could get
| away with it. And yes, this being the United States race and
| class is involved but more so class in this case.
| mordechai9000 wrote:
| Here's a fun one: a telecom CEO (named Elizabeth, too) was
| forging customer signatures - signatures of people she had
| known and worked with in many cases - to show to investors.
|
| And she took money from friends and employees, and told them
| they were getting shares in the company. In reality she used
| the money to pay off her lifestyle expenses.
|
| To be fair, she probably intended to make good on the
| investments once the company was wildly successful.
|
| The amazing thing is, the company had hired a new CEO and is
| actually still operating. Last I heard.
|
| https://www.bloomberg.com/news/features/2019-10-08/quintilli.
| ..
| superbaconman wrote:
| > According to the indictment, the defendants also allegedly
| made numerous misrepresentations to potential investors about
| Theranos's financial condition and its future prospects. For
| example, the defendants represented to investors that
| Theranos conducted its patients' tests using Theranos-
| manufactured analyzers; when, in truth, Holmes and Balwani
| knew that Theranos purchased and used for patient testing
| third party, commercially-available analyzers. The defendants
| also represented to investors that Theranos would generate
| over $100 million in revenues and break even in 2014 and that
| Theranos expected to generate approximately $1 billion in
| revenues in 2015; when, in truth, the defendants knew
| Theranos would generate only negligible or modest revues in
| 2014 and 2015. https://www.justice.gov/usao-ndca/us-v-
| elizabeth-holmes-et-a...
|
| If that's not fraud, what is?
| wyldfire wrote:
| > Also unfortunately using public money and delivering a bad
| product is not a criminal offense, more like being sloppy at
| what you do.
|
| They lied to FDA auditors in what sounds like a criminal
| conspiracy to defraud investors, business partners, and the
| patients whose blood tests were processed there.
| misiti3780 wrote:
| https://en.wikipedia.org/wiki/Enron_scandal
| makerofspoons wrote:
| Interestingly Holmes' father was a VP at Enron: https://www
| .forbes.com/sites/petercohan/2019/02/17/4-startli...
| hef19898 wrote:
| Maybe it's time for a new SOX moment.
| akshayB wrote:
| The point I am trying to make is way things work in US,
| most likely C-levels and high level officials of companies
| get away with it. I am sure there are cases when folks got
| into trouble. Apple had Antennagate for one of the iphones
| and even with a class-action lawsuit people got like $15
| reimbursement. For these huge companies in most of the time
| amount of fines are more like margin of error in accounting
| spreadsheet.
| billyhoffman wrote:
| These are not remotely comparable.
|
| One is a company that built a product with a design flaw
| effecting only one aspect of the product (cell radio)
| that was only triggered under certain circumstances
| (placing you fingers in certain positions). A civil
| lawsuit against the company caused the company to issue a
| fix (free bumper case which insulated the antenna) that
| retroactively fixed all products that shipped with the
| flaw.
|
| The other is a medical device company that sold a product
| that didn't work, giving incorrect results that directly
| informed how people treated or even detected health
| problems. People inside the company knew this and lied
| anyway, repeatedly, and then those people induced and
| conspired with others to hide their fraud. Those specific
| people are now facing criminal charges.
| floatboth wrote:
| Antennagate and a big fraudulent startup in the _medical_
| (!) industry are quite different scale things.
| hart_russell wrote:
| I think you could have just stopped at rich. Money helps anyone
| going through the US Justice system, regardless of color.
| tmpz22 wrote:
| The data backs it up [1]. Sentencing disparities based on
| race in the United States are undeniable.
|
| [1]: https://www.aclu.org/sites/default/files/assets/141027_i
| achr...
| hart_russell wrote:
| So based on your provided data, white people are
| incarcerated more than latino and "other".
| svrourke wrote:
| There's always someone that has to make sure no one is
| being unfair to white people
| s_dev wrote:
| >That rich white people
|
| Balwani isn't white. He seems just as culpable as Elizabeth.
| hijinks wrote:
| 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.
| apples_oranges wrote:
| The modern wisdom, "fake it till you make it", requires you to
| make it, otherwise you'll pay for lying to us.
| [deleted]
| SkipperCat wrote:
| 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.
| 6gvONxR4sf7o wrote:
| > 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.
| sam0x17 wrote:
| 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.
| N00bN00b wrote:
| >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.
| nvr219 wrote:
| It gets a lot of attention because VCs were publicly conned.
| elliekelly wrote:
| > 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.
| LanceH wrote:
| 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.
| capableweb wrote:
| > 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.
| krageon wrote:
| 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.
| rewma wrote:
| > 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.
| SkipperCat wrote:
| 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.
| jjcon wrote:
| 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
| fnord77 wrote:
| Holmes still made it - she's still rich and probably will serve
| minimal (if any) jail time.
| spaetzleesser wrote:
| And in a few years everything will be forgotten. She will do
| a little philanthropy and be a hero like Michael Milken.
| RegnisGnaw wrote:
| The problem is that none of this will work against her defense,
| that she was not of sane state of mind at the time.
| rsynnott wrote:
| That's traditionally a very difficult defense; it's often tried
| as a Hail Mary, but rarely succeeds.
| thehappypm wrote:
| 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.
| dazc wrote:
| Tech problems is a bit of an understatement.
| fernandotakai wrote:
| 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...
| MisterBastahrd wrote:
| What are they basing that on? Her turtleneck was too tight?
| misiti3780 wrote:
| Any lawyers here - is the general consensus that she is going
| to jail for a long time?
| smart_creature wrote:
| 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
| mannerheim wrote:
| 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).
| smart_creature wrote:
| 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.
| mannerheim wrote:
| 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'.
| kesselvon wrote:
| 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.
| [deleted]
| xqcgrek2 wrote:
| Western society is way too tolerant of certain kinds of mental
| illness, such as sociopathy/psychopathy, and intolerant of
| others (e.g. anxiety/depression).
| toss1 wrote:
| 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...).
| short_sells_poo wrote:
| 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.
| toss1 wrote:
| 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.
| smart_creature wrote:
| I've followed the case fairly closely. I'm not aware that this
| is part of her defense. Where did you get this from?
| RegnisGnaw wrote:
| 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.
| smart_creature wrote:
| 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"
| RegnisGnaw wrote:
| 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.
| smart_creature wrote:
| "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.
| RegnisGnaw wrote:
| 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".
| buescher wrote:
| 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.
| emaginniss wrote:
| Her actual defense is going to be: "That bad man made me do it"
| RegnisGnaw wrote:
| Exactly, "I did do it. But that bad man made me do it."
| dmurray wrote:
| Cherchez l'homme!
| jdorfman wrote:
| 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).
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