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I think some of the anger is entirely natural and expected - it's not just that Theranos failed, or that their ideas were bad to begin with, it's that they beha

I think some of the anger is entirely natural and expected - it's not just that Theranos failed, or that their ideas were bad to begin with, it's that they behaved unethically, in poor faith, and illegally to boot. First of all, their fraud endangered people. People rely on blood diagnostics to save their lives and maintain their health - their fraud is not as simple as failing to clean your home or failing to bring you dinner. Much of the anger I think isn't even from the perspective of Silicon Valley, it's simply being angry at a company that put many people at risk via deep, systemic, and willful fraud. On a tribal level, their behavior also reflects on us, because we're all part of this Silicon Valley pool. When a member of your "tribe" behaves poorly IMO it's entirely natural to feel anger at them. On a higher and more pragmatic level, Theranos' behavior to some degree threatens the health of the industry, by inviting more heavy-handed regulation, and bringing more intense scrutiny from both outside and inside (one can argue both these things are justified, though). We've generally operated so far under the idea that everyone (for the most part) is behaving in good faith, that startup failures are honest failures, and don't involve unprecedented, deep, systemic fraud. There is also anger at investors in general, stemming from a general feeling that they aren't doing enough to police bad behavior from their founders. Startup failures are to be expected - they are core to the SV model - but in general whenever SV companies behave egregiously badly their investors are entirely mute. This is doubly infuriating when, like in Theranos' case, the bad behavior has serious consequences.

pj_mukh 11y ago
Has a misdiagnosis and resulting fall-out actually been tracked down? Most of the Theranos projects I remember were beta projects (with Walgreens and such). Fairly common to raise money on a vision, launch an unfinished product (she used the competitors devices to deliver results?) to gauge customer interest, esp in targetted markets, then go gung-ho on Engineering to deliver. Maybe this doesn't work in Bio-tech? I wouldn't know. I agree this will bring a whole lot of unwanted attention to a new industry, but would argue that this was because of the litany of borderline clickbait articles that have followed the WSJ expose. Now if Theranos dies, we'll never know if they were actually full of shit, or if they were actually close to solving the problem but died because they couldn't weather the PR shitstorm.
- woah 11y ago
  Your whole description of raising money, gauging customer interest, etc. is not really applicable here. Interest did not need to be gauged, they were claiming to have a technology that was fundamentally better than the existing tech. This is not a case of "do people want to use my new todo app?". The use of competitor equipment in this case was a tacit admission of their failure to deliver. The business proposition was "we have blood tests that are superior in every way", not "we want to open blood testing centers in Walmart". How much VC funding do you think they would have gotten on a pitch of opening retail blood testing centers with conventional equipment? It sounds like a boring, low margin business that no VC would want a part of.
  - pj_mukh 11y ago
    Most smart "hard tech companies" play with go to market strategies. If they don't, they should. Theranos was actually doing that right. If they were unsure of their tech (or worse were trying to swindle the market), why bother going to market with $400M in the bank? This points to sincere market experimentation. Whether it is appropriate for a biotech company to do so (with actual health information on the line) is another matter. At best, the FDA should have space for this kind of beta testing (clearly marked, always cross-checked etc.).
- TheOtherHobbes 11y ago
  >Has a misdiagnosis and resulting fall-out actually been tracked down? In the VC system - certainly. When you have startups offering a real service with real profitability struggling to find cash for expansion, while some well-connected placeholder who is incompetent at best and fraudulent at worst ambles in and gets $400m for hype and promises, a "PR shitstorm" is the least of everyone's worries. It's good that some people weren't convinced. But enough people were convinced for $400m to change hands. That's really not a good result for a system that likes to pretend it's good at making smart choices about funding.

pj_mukh 11y ago

Has a misdiagnosis and resulting fall-out actually been tracked down? Most of the Theranos projects I remember were beta projects (with Walgreens and such). Fairly common to raise money on a vision, launch an unfinished product (she used the competitors devices to deliver results?) to gauge customer interest, esp in targetted markets, then go gung-ho on Engineering to deliver. Maybe this doesn't work in Bio-tech? I wouldn't know. I agree this will bring a whole lot of unwanted attention to a new industry, but would argue that this was because of the litany of borderline clickbait articles that have followed the WSJ expose. Now if Theranos dies, we'll never know if they were actually full of shit, or if they were actually close to solving the problem but died because they couldn't weather the PR shitstorm.

woah 11y ago
Your whole description of raising money, gauging customer interest, etc. is not really applicable here. Interest did not need to be gauged, they were claiming to have a technology that was fundamentally better than the existing tech. This is not a case of "do people want to use my new todo app?". The use of competitor equipment in this case was a tacit admission of their failure to deliver. The business proposition was "we have blood tests that are superior in every way", not "we want to open blood testing centers in Walmart". How much VC funding do you think they would have gotten on a pitch of opening retail blood testing centers with conventional equipment? It sounds like a boring, low margin business that no VC would want a part of.
- pj_mukh 11y ago
  Most smart "hard tech companies" play with go to market strategies. If they don't, they should. Theranos was actually doing that right. If they were unsure of their tech (or worse were trying to swindle the market), why bother going to market with $400M in the bank? This points to sincere market experimentation. Whether it is appropriate for a biotech company to do so (with actual health information on the line) is another matter. At best, the FDA should have space for this kind of beta testing (clearly marked, always cross-checked etc.).
TheOtherHobbes 11y ago
>Has a misdiagnosis and resulting fall-out actually been tracked down? In the VC system - certainly. When you have startups offering a real service with real profitability struggling to find cash for expansion, while some well-connected placeholder who is incompetent at best and fraudulent at worst ambles in and gets $400m for hype and promises, a "PR shitstorm" is the least of everyone's worries. It's good that some people weren't convinced. But enough people were convinced for $400m to change hands. That's really not a good result for a system that likes to pretend it's good at making smart choices about funding.