Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors • Hacker News Board

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#121

Post by danans » Wed, Sep 29, 2021, 5:03 PM UTC

avalys wrote: post #83

munificent wrote: post #74

Earlier quoted context omitted.

> 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 throug…

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?

Still unfolding, but Lordstown Motors looks like exactly that.

https://hindenburgresearch.com/lordstown/

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#122

Post by gumby » Wed, Sep 29, 2021, 5:04 PM UTC

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.

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#123

Post by mrkramer » Wed, Sep 29, 2021, 5:05 PM UTC

She defrauded investors out of so much money, she deserves at least 10 years in prison imo.

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#124

Post by akiselev » Wed, Sep 29, 2021, 5:06 PM UTC

bcrosby95 wrote: post #56

krageon wrote: post #54

Earlier quoted context omitted.

> 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.

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.

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.

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#125

Post by ghaff » Wed, Sep 29, 2021, 5:07 PM UTC

jcrites wrote: post #67

MattGaiser wrote: post #45

Earlier quoted context omitted.

The problem is that successful startups often start out claiming that which is impossible. Uber was impossible, because it was illegal. Amazon was impossible, as you couldn't pack and ship stuff that cheaply. Personal computers were at one point considered ludicrous.

Uber was 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 medal…

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.

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#126

Post by cryptica » Wed, Sep 29, 2021, 5:09 PM UTC

munificent wrote: post #74

photochemsyn wrote: post #29

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 is…

> 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 throug…

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...

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#127

Post by mrkramer » Wed, Sep 29, 2021, 5:10 PM UTC

edot wrote: post #93

avalys wrote: post #83

Earlier quoted context omitted.

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?

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 gar…

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.

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#128

Post by ryandrake » Wed, Sep 29, 2021, 5:10 PM UTC

photochemsyn wrote: post #29

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 is…

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.

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#129

Post by chmsky00 » Wed, Sep 29, 2021, 5:11 PM UTC

edot wrote: post #93

avalys wrote: post #83

Earlier quoted context omitted.

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?

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 gar…

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 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…

Re: Elizabeth Holmes urged employees to hide Theranos’ lab equipment from inspectors

#130

Post by nosianu » Wed, Sep 29, 2021, 5:13 PM UTC

avalys wrote: post #83

munificent wrote: post #74

Earlier quoted context omitted.

> 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 throug…

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?

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.