3 ms·

Hindsight is 20/20. Investors couldn't just step into the future and ask someone whether or not Theranos was a scam and why.

lotsofpulp 7y ago
They could have asked to see the proof that it worked and asked an independent third party to verify it. That's usually what happens when people do due diligence, and it happens every day in the business world.
- ashtonkem 7y ago
  Also, experts raises the red flags years before the scam was finally revealed. The fraud was trivially discoverable; investors let their goals cloud good judgement.
  - lalos 7y ago
    You could claim the same about Tesla, it has a lot of expert criticizing their financials but it is still up in the air if they are right or wrong. I guess if it does fail people will claim that it was obvious all along...
    - ashtonkem 7y ago
      Tesla sells a product. Whether or not their business model around the product will work and whether the company is well administered is debatable. With Theranos the experts were skeptical that the product was theoretically even possible, and they never demonstrated it working to anyone. All the “demonstrations” involved cheap tricks of shuffling people from room to room so lab techs could manually process the samples. Furthermore anyone doing basic due process could’ve gotten a traditional lab test and compared to the Theranos tests, exactly like investigative reporters did later. Such an obvious test would’ve revealed problems much earlier, and nobody on the inside decided to try that. At least with Tesla you can actually buy a car and actually drive it.
    - astura 7y ago
      No, you can't say that about Tesla, nobody ever said making an electric car was literally impossible. Quite the contrary, the technology is well understood. The experts raised the red flags very early that what Theranos was trying to do didn't appear to be scientifically possible based on current knowledge.
- isoskeles 7y ago
  But they didn't. And there is zero guarantee it won't happen again to healthcare companies. The whole point here is making some generic statement about an entire industry being a good investment is a simple-minded opinion. If this made any sense, the entire economy should be made of only healthcare companies, they're just so good, right?
viklove 7y ago
Investors chose Theranos for the same reason they chose WeWork. It's not because they're making sound investments, it's because they have more money than they know what to do with, and it's becoming increasingly obvious that they don't deserve it. Must "unicorns" are taking advantage of various levels of market fraud, on one side you have Theranoses, somewhere in the middle you've got WeWork, and far on the other end is Uber. All unproven, ridiculous ideas that are not making society better, but rather serve solely to funnel money into the hands of a few wealthy investors. The American dream is finally dead, and it's SV that killed it.

lotsofpulp 7y ago

They could have asked to see the proof that it worked and asked an independent third party to verify it. That's usually what happens when people do due diligence, and it happens every day in the business world.

ashtonkem 7y ago
Also, experts raises the red flags years before the scam was finally revealed. The fraud was trivially discoverable; investors let their goals cloud good judgement.
- lalos 7y ago
  You could claim the same about Tesla, it has a lot of expert criticizing their financials but it is still up in the air if they are right or wrong. I guess if it does fail people will claim that it was obvious all along...
  - ashtonkem 7y ago
    Tesla sells a product. Whether or not their business model around the product will work and whether the company is well administered is debatable. With Theranos the experts were skeptical that the product was theoretically even possible, and they never demonstrated it working to anyone. All the “demonstrations” involved cheap tricks of shuffling people from room to room so lab techs could manually process the samples. Furthermore anyone doing basic due process could’ve gotten a traditional lab test and compared to the Theranos tests, exactly like investigative reporters did later. Such an obvious test would’ve revealed problems much earlier, and nobody on the inside decided to try that. At least with Tesla you can actually buy a car and actually drive it.
  - astura 7y ago
    No, you can't say that about Tesla, nobody ever said making an electric car was literally impossible. Quite the contrary, the technology is well understood. The experts raised the red flags very early that what Theranos was trying to do didn't appear to be scientifically possible based on current knowledge.
isoskeles 7y ago
But they didn't. And there is zero guarantee it won't happen again to healthcare companies. The whole point here is making some generic statement about an entire industry being a good investment is a simple-minded opinion. If this made any sense, the entire economy should be made of only healthcare companies, they're just so good, right?

viklove 7y ago

Investors chose Theranos for the same reason they chose WeWork. It's not because they're making sound investments, it's because they have more money than they know what to do with, and it's becoming increasingly obvious that they don't deserve it. Must "unicorns" are taking advantage of various levels of market fraud, on one side you have Theranoses, somewhere in the middle you've got WeWork, and far on the other end is Uber. All unproven, ridiculous ideas that are not making society better, but rather serve solely to funnel money into the hands of a few wealthy investors. The American dream is finally dead, and it's SV that killed it.