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I did not know much about Theranos before the recent skeptical articles started to appear on newspapers regarding the falseness of their claims. The larger que
by gamesbrainiac 11y ago
I did not know much about Theranos before the recent skeptical articles started to appear on newspapers regarding the falseness of their claims.
The larger question is, how do you get to a $9B valuation without having rock solid technology or evidence to prove the effectiveness of their technology?
I would assume that the VCs in SV are a pretty smart bunch. How on earth did this happen in the first place? If Theranos really did not have the kind of earth shattering technology that they claim to have, how did they get so much money?
If you take a look at their angellist page, then you'll see that they did not even need to raise the money in stages, no seed or series stuff. If you take a look at one of their investors, DFJ, has invested in a lot of successful companies like skype and tesla. Also other investors have invested in companies like Uber and Lyft.
I don't know too much about medicine or tests for that matter. But what I do know is that people don't invest their money without good reason to do so.
What is confounding is that $45M is not chunk change, and yet they managed to raise this much cash in an unconventional way.
- siavosh 11y agoNot to sound too cynical, but didn't we all have similar questions when it came to investment banks and sub prime mortgages and credit instruments a few years ago? Can the greater fool theory coupled with herding behavior help explain some of this?
- JabavuAdams 11y agoHave you seen Elizabeth Holmes' pedigree? Have you looked at who's on her board? In terms of pattern-matching, her speaking and body language match several uber-engineers I know. Top it off with a photogenic appearance. Slam dunk. We're animals with 1 square meter x 2 mm of sometimes-rational coiled up in our heads.
- randycupertino 11y agoAll because she put on Steve Jobs drag, affected a surfer dude accent and bleached her hair blonde? Here she is prior to her tech wunderkind makeover: https://tribwxin.files.wordpress.com/2014/10/elizabeth-holmes.jpg?w=770 https://tribwxin.files.wordpress.com/2014/10/elizabeth-holme...
- compactmani 11y agoIt's true, we can make mistakes from time to time.
- toufka 11y agoCareful. That kind of logical hiccup is exactly what investors #2 through the last thought. And like you say, few to none in that line come from from biomedical or biotech backgrounds. The emperor might have been sold an invisible set of clothing.
- frozenport 11y agoWanna know how it works? Thats a secret. The only people that can smell this kinda bullshit are technical experts. For example, there might not be enough white blood cells in such a small sample to do a meaningful assay. And perhaps there were a few people who didn't invest. But on the other hand, their technology wasn't promising anything revolutionary. Nothing that couldn't be done by BD. Hype+Boring Tech
- stefantalpalaru 11y ago> I would assume that the VCs in SV are a pretty smart bunch. They're also gamblers, and they win when they sell the hot potato for profit, not when the company becomes profitable.
- GFK_of_xmaspast 11y ago> I would assume that the VCs in SV are a pretty smart bunch. How on earth did this happen in the first place? Maybe the pg effect writ large? “I can be tricked by anyone who looks like Mark Zuckerberg. There was a guy once who we funded who was terrible. I said: ‘How could he be bad? He looks like Zuckerberg!’ ”
- pessimizer 11y ago> But what I do know is that people don't invest their money without good reason to do so. Not coincidentally, this false belief is by far the most common reason people invest their money badly, and why Ponzi schemes work.