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What Madoff did was illegal and malicious from the outset. Do you believe that when Holmes was handed the opportunity, at 19, to bring the Edison to market tha

by Fricken 10y ago

What Madoff did was illegal and malicious from the outset. Do you believe that when Holmes was handed the opportunity, at 19, to bring the Edison to market that she set out with the intent of defrauding investors? The only thing she's provably guilty of thus far is believing in her company a little more than is sensible and being preternaturally competent as a fundraiser. When Musk claims he can get people to Mars for $200k, do we say 'That's preposterous!', and slap him in cuffs? It's up to the investors of Spacex to decide whether or not they want to gamble on that proposition. Would you put 100 million into Magic Leap because Rony Abovitz says 'it's rad', or would you insist on seeing a demo first? Because none of Theranos investors did that.

alexqgb 10y ago
The fact that Madoff's intent was criminal from the outset and that Holmes' probably wasn't is irrelevant. The point is that it became criminal. And that's why she's in the firing line today.
- Fricken 10y ago
  At what point did she shift from being an optimistic entrepeneur to a criminal? Was it when she started getting magazine covers? Was it when Hwnry Kissinger joined the board of directors? She's still giving her company 110% in spite of everything that has transpired. Usually the correct time for a startup founder/CEO to call it quits is when they run out of capital, until then it's their job to try and make it work come hell or high water.
  - chx 10y ago
    When she lied about what Theranos has...?
  - ng12 10y ago
    When diagnostic medicine was being conducted with technology she knew wasn't what it was claimed to be. We threw the Enron guys in prison and they only hurt people's wallets, not their health. I don't think she gets off the hook because she's a Sillicon Valley sweetheart.
  - oneloop 10y ago
    Basically, when she said "our machines, which we have already deployed in production and doctors are using them to make potentially life/death decisions, can do X". At that point.
  - rdtsc 10y ago
    > At what point did she shift from being an optimistic entrepeneur to a criminal? Going out on a limb here, I would say when found out their machine didn't provide accurate results. Yet waited until threatened to be closed for two years before voiding results. This is not Uber for Dogs, and puppy doesn't get to the park to play with its friends, but potentially life or death situations. We are not talking just a 0.01% error rate, this is stuff like like 20-40% error rates in some tests. > Was it when Hwnry Kissinger joined the board of directors? Well, some would say it would be a warning sign, for sure ;-)
  - learningram 10y ago
    http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther... Read this article.
lmartel 10y ago
There's a difference between saying "I believe we can develop X" and "we currently have X." As I understand it, Holmes and Theranos did the latter. And that's fraud.
- shard972 10y ago
  I think the point though is how far away is that from Musk?
  - mikeash 10y ago
    The answer is "extremely far, so it's not sensible to compare them." It's perfectly fine to say "We are going to attempt to build something, here's our plan" and then fail. It's completely unacceptable to say "We have something" when you don't. The only way Theranos could be analogous to Musk is if he had got up on that stage in Guadalajara and said "we have a Mars rocket ready to go, we've tested it extensively, it works, we'll begin commercial flight soon, the line for reservations is on your left, please bring your checkbooks."
    - shard972 10y ago
      > The only way Theranos could be analogous to Musk is if he had got up on that stage in Guadalajara and said "we have a Mars rocket ready to go, we've tested it extensively, it works, we'll begin commercial flight soon, the line for reservations is on your left, please bring your checkbooks." Devils advocate but isn't that what SpaceX told facebook when launching their satellite? I would assume they asked for money to launch that thing and I would also assume facebook didn't want it blown up.
      - mikeash 10y ago
        There's no comparison to be made between an accident occurring in an inherently risky field and peddling technology that you know doesn't work. Nitpick mode: Facebook didn't own that satellite and their only involvement in it was a plan (now, obviously, altered) to lease a decent chunk (but by no means all) of its capacity from its owner once it was operational. I'm not sure why everyone decided it was Facebook's satellite.
spotman 10y ago
I agree with your sentiment, but another piece of the puzzle here should be considered: Playing fast and loose with health care, that may be key to determining whether you have some life-threatening disease, is a big deal. This is not like taking some VC money for the next social network, and having no chops to pull it off. Peoples lives could come into play.
- rdtsc 10y ago
  Exactly. If Elon wants to spend his billions building spaceships, as long as they don't routinely fall and kill people, then everyone will cheer for him and that's fair. Screwing up people's blood tests and then seemingly lying about, is a whole different thing.
oneloop 10y ago
How do you know that Madoff was malicious from the outset, I wonder? The guy had a 30 year career, have you studied his beginnings? Maybe you did, but knowing nothing I'd find it more plausible that the guy started small fudging a couple of numbers hoping the next year would be better and eventually snowballed out of control.
- jarsin 10y ago
  He was not always a scammer. He ran a top market making business in his early days and served as chairman of nasdaq etc. That gave him the clout he needed. Then he used that clout to scam wealthy people starting in the 90's.
- dredmorbius 10y ago
  My somewhat cursory read of Madoff was that he tarbabied himself. He had been running a successful investment company, but hit losses. The good, and lawful, thing to do would have been to come clean at that point. He didn't, and his downfall began there. Instead he did the bad, and illegal, thing: doubled down and paid off the small number of exiting investors with new investor's deposits, whilst lying about returns. If you've read John Kenneth Galbraith's The Great Crash: 1929 (a short and highly readable account), you'll find a very familar story in Madoff. He fell prey to what JKG calls "the bezzle".
learningram 10y ago
The examples you are comparing are not similar at all. Musk should be collecting money for the situation to be similar. >being preternaturally competent as a fundraiser. Why are you trying put a positive spin on this whole mess like a PR agency ? What would you describe Madoff as in that case ? A man of great persuasive ability ?
SmokyBourbon 10y ago
You sure drank the koolaid. The technology DOES NOT EXIST. It was a lie. This is a real quote from the CEO: "a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel." She took her daddy's money and created a scam company to defraud investors. She relied on secrecy to keep the scam running long enough for real scientists to invent a product for Theranos to sell. It didn't happen. The house of cards came crashing down.

by Fricken 10y ago

alexqgb 10y ago

The fact that Madoff's intent was criminal from the outset and that Holmes' probably wasn't is irrelevant. The point is that it became criminal. And that's why she's in the firing line today.

Fricken 10y ago
At what point did she shift from being an optimistic entrepeneur to a criminal? Was it when she started getting magazine covers? Was it when Hwnry Kissinger joined the board of directors? She's still giving her company 110% in spite of everything that has transpired. Usually the correct time for a startup founder/CEO to call it quits is when they run out of capital, until then it's their job to try and make it work come hell or high water.
- chx 10y ago
  When she lied about what Theranos has...?
- ng12 10y ago
  When diagnostic medicine was being conducted with technology she knew wasn't what it was claimed to be. We threw the Enron guys in prison and they only hurt people's wallets, not their health. I don't think she gets off the hook because she's a Sillicon Valley sweetheart.
- oneloop 10y ago
  Basically, when she said "our machines, which we have already deployed in production and doctors are using them to make potentially life/death decisions, can do X". At that point.
- rdtsc 10y ago
  > At what point did she shift from being an optimistic entrepeneur to a criminal? Going out on a limb here, I would say when found out their machine didn't provide accurate results. Yet waited until threatened to be closed for two years before voiding results. This is not Uber for Dogs, and puppy doesn't get to the park to play with its friends, but potentially life or death situations. We are not talking just a 0.01% error rate, this is stuff like like 20-40% error rates in some tests. > Was it when Hwnry Kissinger joined the board of directors? Well, some would say it would be a warning sign, for sure ;-)
- learningram 10y ago
  http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther... Read this article.

lmartel 10y ago

There's a difference between saying "I believe we can develop X" and "we currently have X." As I understand it, Holmes and Theranos did the latter. And that's fraud.

shard972 10y ago
I think the point though is how far away is that from Musk?
- mikeash 10y ago
  The answer is "extremely far, so it's not sensible to compare them." It's perfectly fine to say "We are going to attempt to build something, here's our plan" and then fail. It's completely unacceptable to say "We have something" when you don't. The only way Theranos could be analogous to Musk is if he had got up on that stage in Guadalajara and said "we have a Mars rocket ready to go, we've tested it extensively, it works, we'll begin commercial flight soon, the line for reservations is on your left, please bring your checkbooks."
  - shard972 10y ago
    > The only way Theranos could be analogous to Musk is if he had got up on that stage in Guadalajara and said "we have a Mars rocket ready to go, we've tested it extensively, it works, we'll begin commercial flight soon, the line for reservations is on your left, please bring your checkbooks." Devils advocate but isn't that what SpaceX told facebook when launching their satellite? I would assume they asked for money to launch that thing and I would also assume facebook didn't want it blown up.
    - mikeash 10y ago
      There's no comparison to be made between an accident occurring in an inherently risky field and peddling technology that you know doesn't work. Nitpick mode: Facebook didn't own that satellite and their only involvement in it was a plan (now, obviously, altered) to lease a decent chunk (but by no means all) of its capacity from its owner once it was operational. I'm not sure why everyone decided it was Facebook's satellite.

spotman 10y ago

I agree with your sentiment, but another piece of the puzzle here should be considered: Playing fast and loose with health care, that may be key to determining whether you have some life-threatening disease, is a big deal. This is not like taking some VC money for the next social network, and having no chops to pull it off. Peoples lives could come into play.

rdtsc 10y ago
Exactly. If Elon wants to spend his billions building spaceships, as long as they don't routinely fall and kill people, then everyone will cheer for him and that's fair. Screwing up people's blood tests and then seemingly lying about, is a whole different thing.

oneloop 10y ago

How do you know that Madoff was malicious from the outset, I wonder? The guy had a 30 year career, have you studied his beginnings? Maybe you did, but knowing nothing I'd find it more plausible that the guy started small fudging a couple of numbers hoping the next year would be better and eventually snowballed out of control.

jarsin 10y ago
He was not always a scammer. He ran a top market making business in his early days and served as chairman of nasdaq etc. That gave him the clout he needed. Then he used that clout to scam wealthy people starting in the 90's.
dredmorbius 10y ago
My somewhat cursory read of Madoff was that he tarbabied himself. He had been running a successful investment company, but hit losses. The good, and lawful, thing to do would have been to come clean at that point. He didn't, and his downfall began there. Instead he did the bad, and illegal, thing: doubled down and paid off the small number of exiting investors with new investor's deposits, whilst lying about returns. If you've read John Kenneth Galbraith's The Great Crash: 1929 (a short and highly readable account), you'll find a very familar story in Madoff. He fell prey to what JKG calls "the bezzle".

learningram 10y ago

The examples you are comparing are not similar at all. Musk should be collecting money for the situation to be similar. >being preternaturally competent as a fundraiser. Why are you trying put a positive spin on this whole mess like a PR agency ? What would you describe Madoff as in that case ? A man of great persuasive ability ?

SmokyBourbon 10y ago

You sure drank the koolaid. The technology DOES NOT EXIST. It was a lie. This is a real quote from the CEO: "a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel." She took her daddy's money and created a scam company to defraud investors. She relied on secrecy to keep the scam running long enough for real scientists to invent a product for Theranos to sell. It didn't happen. The house of cards came crashing down.