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Major Investor Sues Theranos

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Re: Major Investor Sues Theranos

#201

Post by sangnoir »

djf1 wrote: post #104
alexqgb wrote: post #79

Earlier quoted context omitted.

Alternately, it reflects the tenor of the story and the facts it contains. You could say this is inappropriate editorializing, but that makes the obviously absurd implication that fraud is a neutral thing, and that there are many good kinds of fraud in additional to the bad ones. If you're reporting clear facts about something unambiguously bad, then it's entirely appropriate for the supporting photographs to support…

It's entirely appropriate for the supporting photographs to support the article, but that's not what the parent is questioning. If the news is based on facts, then the facts can speak for themselves. An unflattering photo does not support the article if the article is not related to how well the subject takes photos.

> If the news is based on facts, then the facts can speak for themselves

Photos, are not based on facts. There is no such thing as a 'neutral' photo - all photographs are editorialized. Timing, framing, composition, lighting, contrast are among the hundreds of variables that contribute to a photo. Most news organisation are well of this and they allow post-processing of photos (to different extents). I would say an unflattering photo goes well with an unflattering article.

Re: Major Investor Sues Theranos

#202

Post by sangnoir »

briandear wrote: post #176
Alex3917 wrote: post #125

Earlier quoted context omitted.

> This is true for male and female founders. It's not just founders, think about the pictures of Obama and O.J. where they were made blacker. Or the images of James Holmes or Saddam. People will actually complain and threaten to kill the magazine editors if they don't make the 'bad guys' look evil enough; look at what happened with the Rolling Stone photo of the Boston Marathon bomber.

The problem with the Boston thing is that RS put them on the cover -- essentially giving them one of the most honored spots in music. That's what people were mad about -- elevating monsters and putting them at the same level as you might Bono. They weren't complaining about the saturation or hue.

> elevating monsters and putting them at the same level as you might Bono.

I disagree with the dehumanization of people who do dispicable things (e.g. the Boston Bomber or Nazis) - they were not monsters but humans like you and I; only with very warped belief systems. There danger is that categorizing them as monsters will limit our understanding of how they come about and/or how to prevent this from recurring in the future.

On the issue of appearing on a magazine cover - I do not think the glamorizing was intentianal. Good-looking people dominate covers, and monster or not, the dude was good looking. Hitler was once Time magazine "Man of the Year" - they were not lionizing him, but only declaring he had made the greatest impact of the year.

Re: Major Investor Sues Theranos

#203

Post by MisterBastahrd »

nerfhammer wrote: post #26
ThrustVectoring wrote: post #5

Earlier quoted context omitted.

FYI, the "web" link is exactly for this. Paywalled sources get penalized in Google's search results, so most of the time searching for the article's title and clicking the Google search results link gets you the full article.

They've upgraded their paywall game, having a google referer doesn't help anymore.

Of course it does. You just have to block the cookie too.

Re: Major Investor Sues Theranos

#204

Post by ceterum_censeo »

jacquesm wrote: post #200
ceterum_censeo wrote: post #195

Earlier quoted context omitted.

> they failed to do due diligence before investing Do we know the scope of the DD that was done?

I haven't seen any proof that DD was done at all - to date, this may change - but if the scope didn't at least include a review of the core technology then it was too narrow.

It doesn't strike me as charitable to take your strong stance that the investors were incompetent based on speculation with the benefit of hindsight.

I agree that they would be negligent if they did not run DD with a scope that included a review of the Theranos platform technology and implemented devices, but it is entirely possible to do proper DD and be fooled by a skilled charlatan.

Re: Major Investor Sues Theranos

#205

Post by jacquesm »

ceterum_censeo wrote: post #204
jacquesm wrote: post #200

Earlier quoted context omitted.

I haven't seen any proof that DD was done at all - to date, this may change - but if the scope didn't at least include a review of the core technology then it was too narrow.

It doesn't strike me as charitable to take your strong stance that the investors were incompetent based on speculation with the benefit of hindsight. I agree that they would be negligent if they did not run DD with a scope that included a review of the Theranos platform technology and implemented devices, but it is entirely possible to do proper DD and be fooled by a skilled charlatan.

> It doesn't strike me as charitable to take your strong stance that the investors were incompetent based on speculation with the benefit of hindsight.

Then please provide some proof that proper DD was done. I haven't seen any, and funny enough, Theranos did not defend itself at all by saying the investors did their own proper DD, which would be the easiest way out for them.

> it is entirely possible to do proper DD and be fooled by a skilled charlatan.

Sorry, I do not subscribe to that. You don't get to cheat on physics, biology, math. This is not some kind of magical device, it is an ordinary, real world device with very specific inputs and very specific outputs. In fact, such devices already existed which gives you a control. The disruption came along one parameter only, the amount of blood required to do the test.

It is trivial to come up with a foolproof test to see whether or not Theranos has a working device.

If they did not at the time have a device then you are investing in a company that your DD partner will tell you may very well fail because a device as specified may fail to materialize. If they had a process but no device then that too could have been tested.

Yes, it is hindsight because it is after the fact, but this is how the job is normally done and that wouldn't change before or after. It's just that we happen to live after the fact that doesn't make everything automatically hindsight. Just like naming your variables properly in a piece of software can't be called hindsight if you find a project failed because of not naming variables properly. It is simply not good practice, irrespective of the timing.

Re: Major Investor Sues Theranos

#206

Post by jacquesm »

StreamBright wrote: post #192
jacquesm wrote: post #155

I'm definitely not a friend of Theranos, but : they failed to do due diligence before investing, the error is theirs. I wonder if they would sue as well if Theranos had scored big time. If you treat investing as gambling don't sue if you lose a hundred million dollars of your customers money.

There are many things that you are not a position to verify if you are an investor. On the top of that, there is a huge difference between misreporting your numbers versus stating that you are capable of doing something while you know it for sure that are not.

Investors routinely hire experts to do their verification for them, if your experts are not given full access then you should walk. If there is a huge difference in the numbers then it should have been found during the DD, this is one of the most frequently occurring reasons why deals do not go through after the terms sheet has been signed (another one is undeclared security breaches).

Re: Major Investor Sues Theranos

#207

Post by M_Grey »

logicallee wrote: post #153
M_Grey wrote: post #99

Earlier quoted context omitted.

We're not journalists, this is not a journalistic outlet.

I'm just going to go ahead and disagree. This is journalism and news in 2016. (I'm also including people's blog write-ups that they or others submit.) On tech and fundraising issues, I'd say HN and yhe niche blog posts submitted, do count for a kind of journalism.

Only by throwing the definition of the word out the window to make a point, could that possibly fly.

Re: Major Investor Sues Theranos

#208

Post by protomyth »

Mithaldu wrote: post #179
protomyth wrote: post #101

Earlier quoted context omitted.

Photo choice is one of the most effective editorial tools a publication has. For example, do they show a photo of the person as a child, wearing a suit, or casual clothes posed with a weapon? Each is technically the same person, but all will prejudice your view towards the subject.

Editorializing (i.e. opinions) should stay in the opinion pieces, not be mixed in with reporting of facts. It calls the trustworthiness of the entire rest of the article in question. (Although i guess it's kinda nice if it's done blatantly so you already know in advance the article is particularly untrustworthy.)

> Editorializing (i.e. opinions) should stay in the opinion pieces, not be mixed in with reporting of facts.

preaching to the choir

> It calls the trustworthiness of the entire rest of the article in question. (Although i guess it's kinda nice if it's done blatantly so you already know in advance the article is particularly untrustworthy.)

In a lot of ways it is subconscious, but not always. If you take a objective view and look at US Presidential 2016 race articles, you get a pretty good feel for the base opinion of the editors from the picture they use of the candidates.

Every news outlet has a prejudice, and I find the choice of images to be one of the easy ways to communicate that to you. If you look for it, you can gear your reaction to the information provided.

Re: Major Investor Sues Theranos

#209

Post by moosey »

jondubois wrote: post #43
garrincha wrote: post #4

I have a feeling that this level of lying is much more pervasive in startups than people realize.

I think humanity is literally evolving to lie and cheat at a biological level. Soon, universities will have courses in 'Mastering the art of cheating and lying'.

I wouldn't say that we've evolved in some way to lie and cheat more. The wikipedia page on the subject[1] covers the fact that such things exist in cooperative groups in nature and mitigation techniques exist.

Instead I would argue that 'cheating' behaviors are rewarded by some current economic and taxation models (tax loopholes that are created and used by already wealthy individuals to avoid taxation, rewards for destroying jobs only to increase profit, rather than avoid loss).

One can even look at American culture, and see how too often the value of a human is derived from the amount of wealth that they have. I'm not suggesting that all Americans do this, I'm simply suggesting that it's something that underlies so many arguments against taxing the rich and helping the poor; that the position that they are in is due to some kind of karmic result.

So, instead of saying that these are new, I'm arguing that we've just begun to reward behaviors that work against the cooperative goals of society.

[1]: https://en.wikipedia.org/wiki/Cheating_(biology)

Re: Major Investor Sues Theranos

#210

Post by ceterum_censeo »

jacquesm wrote: post #205
ceterum_censeo wrote: post #204

Earlier quoted context omitted.

It doesn't strike me as charitable to take your strong stance that the investors were incompetent based on speculation with the benefit of hindsight. I agree that they would be negligent if they did not run DD with a scope that included a review of the Theranos platform technology and implemented devices, but it is entirely possible to do proper DD and be fooled by a skilled charlatan.

> It doesn't strike me as charitable to take your strong stance that the investors were incompetent based on speculation with the benefit of hindsight. Then please provide some proof that proper DD was done. I haven't seen any , and funny enough, Theranos did not defend itself at all by saying the investors did their own proper DD, which would be the easiest way out for them. > it is entirely possible to do proper DD…

> Then please provide some proof that proper DD was done.

If you are stating that "they [investors] failed to do due diligence", then the onus is on you to provide proof that the proper DD was done if you don't want your argument referred to as speculation. I am not drawing a conclusion one way or the other.

> The disruption came along one parameter only, the amount of blood required to do the test.

That wasn't the only disruption and I'm not sure that was the primary one: I would argue the primary disruption was regulatory (using/abusing the LDT framework and consumer-initiated testing).

> It is trivial to come up with a foolproof test to see whether or not Theranos has a working device.

I would never use the words trivial and foolproof for anything in medicine or laboratory testing: there is nothing simple about running a comparison between labs, especially for biological samples. Run an identical sample at Quest and Labcorp and the values will differ, perhaps in a statistically-significant way.

I agree in that I would expect that proper due diligence should have recommended against an investment in Theranos. Not participating in the scientific community is a giant red flag. I completely disagree that technical DD on the technology platform would necessarily reveal the flaws in Theranos.

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