5 ms·

The ugly, unethical underside of Silicon Valley

38 points by aburan28 10y ago

readhn 10y ago
We all know, consciously or subconsciously, what it means. We are nearing another top, a la early 2000s dot com or real estate of 2006-2007. Everything is cyclical. Too much of a good thing is bad for all of us. It is time for a lot of pain soon for all of us. It's overdue.
- godzillabrennus 10y ago
  As long as the federal reserve keeps pumping money into the market with QE while keeping interest rates low there won't be much incentive for anyone to stop investing in risky stuff like venture funds.
Mz 10y ago
“What if Theranos is the canary in the coal mine?” says Roger McNamee, a 40-year VC veteran and managing director at Elevation Partners. “Everyone is looking at Theranos as an outlier. We may discover it’s not an outlier at all.” Eh, it seems to be a pretty obvious outlier. It was valued at $10 Billion at one time, having not shipped a thing. Not too many companies hit that valuation even with shipping product. That doesn't mean fraud is not more rampant than we want to believe. But I think, yes, Theranos is an outlier.
- readhn 10y ago
  Theranos is not an outlier. From my experience in biotech its pretty common "to stretch" the truth and hide/not mention inconvenient facts. Not many get to multi billion evaluations but many do get multi million funding this way.... And then go bust.
  - eli_gottlieb 10y ago
    A family member of mine left a biotechnology job for similar reasons: death-march management, disrespect for scientists, and the obvious fact that the only purpose of the company was to pile IP into a closet, never to ship a product. It was a straight-up exploitative scam, but for people with PhDs.
    - readhn 10y ago
      Yep. The patenting process - talk about stretching the truth - a lot of the stuff is put in there just so other potential companies would be blocked from doing work in this direction. Not based on solid science and results but just ideas and speculations of the management. I have seen many cases (in biotech startups) where good knowledgeable scientists would try to do what is right and would end up getting fired or forced out of companies. The worst is when management completely takes over and disregards science for business purposes - seems like what happened with Theranos.
- sago 10y ago
  I don't think 'outlier' was referring to purely valuation there, but the combination of ethical laxity, smoke and mirrors and misleading positioning. MagicLeap is another that comes to mind. It's a distribution, certainly, higher valuations are rarer, but that doesn't mean they aren't part of the same coal seam.
- godzillabrennus 10y ago
  Plenty of medtech companies have sold for nine figures without validation of FDA approval much less shipping a product. The valuation of Theranos before it tanked was the incredible part of that saga.
randycupertino 10y ago
"Vinod Khosla did not show up at TechCrunch Disrupt to be harangued by some smartass, know-nothing journalist." Thought for sure they were about to bring up his beach house blocking public access to a public beach. http://www.indiawest.com/news/global_indian/california-starts-eminent-domain-process-to-claim-vinod-khosla-s/article_9b4fc282-cbad-11e6-968e-7ba1a58a0a08.html http://www.indiawest.com/news/global_indian/california-start...

38 points by aburan28 10y ago

We all know, consciously or subconsciously, what it means. We are nearing another top, a la early 2000s dot com or real estate of 2006-2007. Everything is cyclical. Too much of a good thing is bad for all of us. It is time for a lot of pain soon for all of us. It's overdue.

godzillabrennus 10y ago
As long as the federal reserve keeps pumping money into the market with QE while keeping interest rates low there won't be much incentive for anyone to stop investing in risky stuff like venture funds.

Mz 10y ago

“What if Theranos is the canary in the coal mine?” says Roger McNamee, a 40-year VC veteran and managing director at Elevation Partners. “Everyone is looking at Theranos as an outlier. We may discover it’s not an outlier at all.” Eh, it seems to be a pretty obvious outlier. It was valued at $10 Billion at one time, having not shipped a thing. Not too many companies hit that valuation even with shipping product. That doesn't mean fraud is not more rampant than we want to believe. But I think, yes, Theranos is an outlier.

readhn 10y ago
Theranos is not an outlier. From my experience in biotech its pretty common "to stretch" the truth and hide/not mention inconvenient facts. Not many get to multi billion evaluations but many do get multi million funding this way.... And then go bust.
- eli_gottlieb 10y ago
  A family member of mine left a biotechnology job for similar reasons: death-march management, disrespect for scientists, and the obvious fact that the only purpose of the company was to pile IP into a closet, never to ship a product. It was a straight-up exploitative scam, but for people with PhDs.
  - readhn 10y ago
    Yep. The patenting process - talk about stretching the truth - a lot of the stuff is put in there just so other potential companies would be blocked from doing work in this direction. Not based on solid science and results but just ideas and speculations of the management. I have seen many cases (in biotech startups) where good knowledgeable scientists would try to do what is right and would end up getting fired or forced out of companies. The worst is when management completely takes over and disregards science for business purposes - seems like what happened with Theranos.
sago 10y ago
I don't think 'outlier' was referring to purely valuation there, but the combination of ethical laxity, smoke and mirrors and misleading positioning. MagicLeap is another that comes to mind. It's a distribution, certainly, higher valuations are rarer, but that doesn't mean they aren't part of the same coal seam.
godzillabrennus 10y ago
Plenty of medtech companies have sold for nine figures without validation of FDA approval much less shipping a product. The valuation of Theranos before it tanked was the incredible part of that saga.

randycupertino 10y ago

"Vinod Khosla did not show up at TechCrunch Disrupt to be harangued by some smartass, know-nothing journalist." Thought for sure they were about to bring up his beach house blocking public access to a public beach. http://www.indiawest.com/news/global_indian/california-starts-eminent-domain-process-to-claim-vinod-khosla-s/article_9b4fc282-cbad-11e6-968e-7ba1a58a0a08.html http://www.indiawest.com/news/global_indian/california-start...