61–70 of 257 posts
During a bubble assets are overvalued even when everyone has the known facts. If a valuation is based on fraud then it's not indicative of a bubble.
The difference between fraud and development is a very small one. As Telsa motors will show in the next 9 months.
Maybe Elon is over confident, over enthusiastic, short sighted, etc. but his vision is world class and world changing.
And he has delivered, consistently.
An interesting side note about this story is the homogeneity and lack of relevant background among Theranos's board of directors. All the outside directors were white, prestigious (former generals, senators, cabinet secretaries, etc) and relatively old. Research shows that homogenous groups are less likely to challenge each other. My coauthor and I wrote about this in our book Meltdown (Published by Penguin Press in…
Yeah, it's pretty clear that it was by design.
Moreover, Holmes seems to have known the impossibility of her claims, or perhaps, was over confident initially about the possibilities of technology and later came to the realization that current technology cannot fulfill her vision.
At that point, she should have come clean, but chose to continue the charades.
Earlier quoted context omitted.
>The media, though, never paid enough attention (or was possibly subverted by Theranos itself) to the naysayers. Rupert Murdoch put 125 million dollars into Theranos, so the press itself was invested. This investment was only public after investors sued: https://www.smh.com.au/business/markets/rupert-murdoch-among...
But some credit is due to Rupert Murdoch: despite pressure from Elizabeth Holmes (and his investment in it), he decided to allow the reporter, John Carreyrou, to publish his critical pieces on Theranos in the WSJ [1]: Several people who have worked at Murdoch papers have told me that he isn’t above interceding in editorial matters, but in this case, despite his personal interest, he didn’t. A source who has known Mur…
I seriously doubt he allowed Carreyrou to continue for the sake of good journalism.
Not that I'm defending Theranos, they should have come out and said "We're running into issues" waaaaaay before they did and way before they put kiosks into Walgreens. That their diagnostic technique seemed impossible to experts doesn't disqualify them, but once they had failed to get it to work themselves, and yet assert that it does. That is when it steps over the line into fraud as far as I am concerned.
It's all part of the perverse incentives involved with well-funded tech companies.
There is no real incentive to call out fraud. As an investor or a partner you might pass on a deal, but to go public with your concerns means risking a possible lawsuit, raising the ire of the people who are already on the bandwagon, being excluded from future deals, and being dismissed as someone who is out of touch and "not getting it."
Contrarians can short publicly-traded companies, so there is a financial incentive to call out BS, but for private companies there is very little upside in raising concerns publicly.
If you doubt this effect, contrast the number of articles talking about how blockchain is the future with those taking a hard look at blockchain's financial viability for specific applications. The former group are the ones being asked to speak at conferences and landing large consulting contracts.
Earlier quoted context omitted.
Sure, there were skeptics. And there were also SV gurus shouting "Fake it till you make it!" "Impostor Syndrome!" "Ignore the haters!" When you immediately equate all self-doubt with Impostor Syndrome -- rather than develop actionable heuristics to detect when said doubt is justified -- don't feign surprise when some people take it seriously. Maybe they were just fooled by your confidence. ("You" in the general sense…
I don’t know. That thinking might paper over a middling start-up with a mix of sincerity and hype but just a poor product or unsuccessful funding rounds. Theranos, and other unicorn-scale hype, is a whole different thing. It doesn’t get this bad unless there is a seriously malevolent drive for the money, essentially saying that you deserve money just for an idea, just for being a made-up executive, regardless of all…
BINGO! What a great term. I've never heard it called that before (which now seems hard to believe), but have definitely seen it SO many times before (specifically in massive corporate IT programs - the domain I work in as an enterprise architect). Did you coin this phrase? I'm so using this! Thank you.
Earlier quoted context omitted.
But some credit is due to Rupert Murdoch: despite pressure from Elizabeth Holmes (and his investment in it), he decided to allow the reporter, John Carreyrou, to publish his critical pieces on Theranos in the WSJ [1]: Several people who have worked at Murdoch papers have told me that he isn’t above interceding in editorial matters, but in this case, despite his personal interest, he didn’t. A source who has known Mur…
He gets credit for not doing something extremely unethical that would have been quite risky, probably stupidly so (because it would bring him into the controversy)?
Earlier quoted context omitted.
The difference between fraud and development is a very small one. As Telsa motors will show in the next 9 months.
Why so much hate for Tesla? Maybe Elon is over confident, over enthusiastic, short sighted, etc. but his vision is world class and world changing. And he has delivered, consistently.
This goes to answer both your comment and (at present) the top comment of this post, which asks why people ignore a chorus of naysayers saying that what's being done is impossible. The entire mindset of the Silicon Valley disrupter--we're the plucky underdog fighting an established oligopoly by doing the impossible (at least for the established oligarchs)--is very ripe for an unethical fraudster to milk. Distinguishing between the two cases is not easy, especially given the tendency to believe your own hype and oversell your current capabilities.
It's not unique to Theranos. It's all part of the perverse incentives involved with well-funded tech companies. There is no real incentive to call out fraud. As an investor or a partner you might pass on a deal, but to go public with your concerns means risking a possible lawsuit, raising the ire of the people who are already on the bandwagon, being excluded from future deals, and being dismissed as someone who is ou…
It works both ways though, a lot of people said Tesla was a fraud and they couldn't build a "real" electric car with a range of 300 miles. And to the credit of the critics they weren't wrong, there was some serious integration of battery technology that had never been done before that made it possible for the Model S to exist. Not that I'm defending Theranos, they should have come out and said "We're running into iss…