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Yes, but the con of Elizabeth Holmes was a case of blatant fraud. Obviously investors should work harder to do due-diligence that can uncover actively fraudulen

Yes, but the con of Elizabeth Holmes was a case of blatant fraud. Obviously investors should work harder to do due-diligence that can uncover actively fraudulent behavior, but you can understand some people being caught out by it. There was very little in WeWork's model that wasn't visibly problematic on the surface.

lotsofpulp 7y ago
According to experienced scientists with decades of experience and knowledge about testing blood, there were very clear problems with Theranos' claims.
- duxup 7y ago
  Yeah there was no technical info on how they overcame the issues with actually maintaining the machines... and how they operated with so little blood. Competitors and scientists were pretty skeptical. Word has it when they tried to pick up some traditional investors and started asking questions they just got BS and a lot of those investors walked.
- lancesells 7y ago
  From everything I've read and watched on Theranos they were committing major fraud. It's hard to blame investors where the company itself is creating false test results during meetings. As far as I can tell it's way worse than WeWork.
  - TeMPOraL 7y ago
    Somebody explain uBeam to me then. They're just a regular startup that everyone with high school-level knowledge of physics knows is bullshit, and yet they're still around.
    - Trevor908 7y ago
      They fired just about everyone and are gliding along until their money runs out, hoping for a miracle. (And so that the executives can keep paying themselves healthy salaries, undoubtedly.)
  - jacquesm 7y ago
    Investors should never rely on the target for such info. And if a company refuses DD then you just walk.
x0x0 7y ago
In WeWork's defense -- and it's cray I have to say that -- you can, in a world where we aren't on covid lockdown, stroll into a WeWork and rent an office at the rates they advertise. I've even worked in one. It wasn't a great experience, but they're definitely not fraudulent or in any way really comparable to Theranos. Not a good investment, but not fraudulent. Whether they can make money given their model is a matter for CPAs. But they sell a real product at least.
- luckylion 7y ago
  > Not a good investment, but not fraudulent. As in "claiming you're a tech company and inflating your valuation isn't fraudulent". I believe the GP's point was that, if Theranos hadn't been a fraud, it was a story that investments made sense in. WeWork wasn't, it only "worked" because it was essentially a pyramid scheme where the guy at the top took the money investors brought in, pissed some off it away publicly and then used that to show potential investors how great his company was going.
- wpietri 7y ago
  Not a fraud for the customers, at least in the short term. But I think it made even less sense as a business, so I think it's just as much of a con job for the investors. Think of it as akin to a Ponzi scheme. Early Ponzi investors do fine. They get paid a real rate of return, and often can even withdraw their money. Does that make it less of a fraud? Nope. It just means the house of cards hasn't collapsed yet.
  - x0x0 7y ago
    Fair, but did they lie to investors, or did they just sell a (really) optimistic story? Particularly that consumer/business preferences would change for tiny crappy loud pay-by-the-month offices? If folks like Vision can't be considered sophisticated, and capable of making up their own minds about the likelihood of a financial model working, and whether they like a somewhat-self-serving ownership structure, I don't know who can.
    - 7y ago

lotsofpulp 7y ago

According to experienced scientists with decades of experience and knowledge about testing blood, there were very clear problems with Theranos' claims.

duxup 7y ago
Yeah there was no technical info on how they overcame the issues with actually maintaining the machines... and how they operated with so little blood. Competitors and scientists were pretty skeptical. Word has it when they tried to pick up some traditional investors and started asking questions they just got BS and a lot of those investors walked.
lancesells 7y ago
From everything I've read and watched on Theranos they were committing major fraud. It's hard to blame investors where the company itself is creating false test results during meetings. As far as I can tell it's way worse than WeWork.
- TeMPOraL 7y ago
  Somebody explain uBeam to me then. They're just a regular startup that everyone with high school-level knowledge of physics knows is bullshit, and yet they're still around.
  - Trevor908 7y ago
    They fired just about everyone and are gliding along until their money runs out, hoping for a miracle. (And so that the executives can keep paying themselves healthy salaries, undoubtedly.)
- jacquesm 7y ago
  Investors should never rely on the target for such info. And if a company refuses DD then you just walk.

x0x0 7y ago

In WeWork's defense -- and it's cray I have to say that -- you can, in a world where we aren't on covid lockdown, stroll into a WeWork and rent an office at the rates they advertise. I've even worked in one. It wasn't a great experience, but they're definitely not fraudulent or in any way really comparable to Theranos. Not a good investment, but not fraudulent. Whether they can make money given their model is a matter for CPAs. But they sell a real product at least.

luckylion 7y ago
> Not a good investment, but not fraudulent. As in "claiming you're a tech company and inflating your valuation isn't fraudulent". I believe the GP's point was that, if Theranos hadn't been a fraud, it was a story that investments made sense in. WeWork wasn't, it only "worked" because it was essentially a pyramid scheme where the guy at the top took the money investors brought in, pissed some off it away publicly and then used that to show potential investors how great his company was going.
wpietri 7y ago
Not a fraud for the customers, at least in the short term. But I think it made even less sense as a business, so I think it's just as much of a con job for the investors. Think of it as akin to a Ponzi scheme. Early Ponzi investors do fine. They get paid a real rate of return, and often can even withdraw their money. Does that make it less of a fraud? Nope. It just means the house of cards hasn't collapsed yet.
- x0x0 7y ago
  Fair, but did they lie to investors, or did they just sell a (really) optimistic story? Particularly that consumer/business preferences would change for tiny crappy loud pay-by-the-month offices? If folks like Vision can't be considered sophisticated, and capable of making up their own minds about the likelihood of a financial model working, and whether they like a somewhat-self-serving ownership structure, I don't know who can.
  - 7y ago