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They are literally the victims. Elizabeth Holmes made representations which she knew to be false to secure investments. That is explicitly fraud. That investor

by JackFr 5y ago

They are literally the victims. Elizabeth Holmes made representations which she knew to be false to secure investments. That is explicitly fraud. That investors may have been foolish and greedy does not take away from the fact that Holmes acted to deceive them. If I leave the keys in the ignition of my sports car and it’s stolen, I’m a very foolish person, but certainly no less the victim of a car theft.

bserge 5y ago
Any records of what she actually said to investors? Imo, it was likely just the usual pitch with vague promises and a lot of "believe/estimate/think/consider/approximately/likely/close to/in development". Just like any other startup before they strike it big or lose millions. Looks more like she "messed with the wrong mf'ers" as they say. Tbf, $1 billion is a lot of money.
dannyr 5y ago
"If I leave the keys in the ignition of my sports car and it’s stolen, I’m a very foolish person, but certainly no less the victim of a car theft." Except that the investors gave the keys of their cars to Holmes. Holmes didn't grab their money without their permission.
- sschueller 5y ago
  If you talk to your insurance, you are not the victim. They won't pay out a claim if you left your key in the car.
  - relaunched 5y ago
    They'd say you didn't take reasonable care.
    - projektfu 5y ago
      And then, in the US, if you have comprehensive coverage, they'd pay the claim.
  - short12 5y ago
    What kind of crap insurance do you have? Mine certainly does
  - JackFr 5y ago
    That's not true.
- JackFr 5y ago
  She told them she was the valet.
thow-58d4e8b 5y ago
> Elizabeth Holmes made representations which she knew to be false to secure investments. That is explicitly fraud. the problem - this became an institutionalized modus operandi of Silicon Valley, finance, higher education, IP law, crypto, even real estate - essentially the entire economy of intangible goods and services. As Jim Chanos put in ‘We are in the golden age of fraud’ - lying to investors, public or congress or courts became so normalized that people no longer see any problem with it
- derbOac 5y ago
  Not to minimize what happened with Theranos but I suspect a lot of discussion around it is and has been shaped by the larger problem it is a small part of. Yes, there was blatant fraud and lots of blame and harm of various sorts to go around the whole network associated with it, but for every one Theranos there's who knows how many more that are part of something more subtle but collectively no less problematic. Maybe Holmes was engaging in outright fraud, but for every one Holmes doing that, there's probably 100s across various fields bending the truth systematically to various degrees short of what Theranos represents.
sumedh 5y ago
> Elizabeth Holmes made representations which she knew to be false to secure investments. Lot of companies do that atleast with software. Didnt Bill Gates tell IBM that they have an OS when they didnt and then bought an OS from someone else?
- projektfu 5y ago
  Being on the purchasing end of things, I see it pretty commonly with software. While it's being sold, they tell you that it does things. During installation, they tell you those things are having the bugs ironed out and will be available soon. After installation and a few months of use, they ask you to participate in a focus group about how the features should look when they get around to starting them. However, the software people rarely try to gaslight you into believing that the features actually do exist and you don't need them anyway. At least, in my experience. And, when pressed by customers, they usually fess up that the features are still "under development". Listening to the "The Dropout" podcast, the thing that is striking is that Theranos had a bunch of things they said to investors and customers (Walgreens, Safeway) that they would not fess up to in deposition before the SEC. All of a sudden, the genius founder can't remember hardly anything of what happened in the last 10 years. I don't doubt that Holmes wanted it to work. I think she thought that in the first few years, her R&D lab would actually be producing a machine that did what they claimed, and that they'd just be running the tests in house until the FDA approval came to sell them to everyone and his dog. But it seems she and the other brass didn't want to ever hear that they were not succeeding. And so they had to lie. I was pretty disappointed because the articles about it made it seem like she had made or been part of a breakthrough in her undergraduate research to dramatically reduce the sample size. Imagine the applications in veterinary medicine! But this was not the case, she took existing tech and then started raising investment on the promise that it could be extended by sufficiently smart people, and then sold an image of herself as a prodigy to keep the ball rolling, while immunizing herself to the reality of the actual performance of the machines.
- andi999 5y ago
  The big difference is that they knew they could make it fast. It is like you are a carpenter and say you have a table in stock which you didn't build yet. The big difference is she didn't have anything and no viable path to deliver it. A fundamental step had to be made which wasn't there. It is like promising anti gravity flight. If you have a functioning anti gravity Prototyp you can probably make a plane with enough engineering. If you don't it will not happen no matter how much money you pour in.

by JackFr 5y ago

bserge 5y ago

Any records of what she actually said to investors? Imo, it was likely just the usual pitch with vague promises and a lot of "believe/estimate/think/consider/approximately/likely/close to/in development". Just like any other startup before they strike it big or lose millions. Looks more like she "messed with the wrong mf'ers" as they say. Tbf, $1 billion is a lot of money.

dannyr 5y ago

"If I leave the keys in the ignition of my sports car and it’s stolen, I’m a very foolish person, but certainly no less the victim of a car theft." Except that the investors gave the keys of their cars to Holmes. Holmes didn't grab their money without their permission.

sschueller 5y ago
If you talk to your insurance, you are not the victim. They won't pay out a claim if you left your key in the car.
- relaunched 5y ago
  They'd say you didn't take reasonable care.
  - projektfu 5y ago
    And then, in the US, if you have comprehensive coverage, they'd pay the claim.
- short12 5y ago
  What kind of crap insurance do you have? Mine certainly does
- JackFr 5y ago
  That's not true.
JackFr 5y ago
She told them she was the valet.

thow-58d4e8b 5y ago

> Elizabeth Holmes made representations which she knew to be false to secure investments. That is explicitly fraud. the problem - this became an institutionalized modus operandi of Silicon Valley, finance, higher education, IP law, crypto, even real estate - essentially the entire economy of intangible goods and services. As Jim Chanos put in ‘We are in the golden age of fraud’ - lying to investors, public or congress or courts became so normalized that people no longer see any problem with it

derbOac 5y ago
Not to minimize what happened with Theranos but I suspect a lot of discussion around it is and has been shaped by the larger problem it is a small part of. Yes, there was blatant fraud and lots of blame and harm of various sorts to go around the whole network associated with it, but for every one Theranos there's who knows how many more that are part of something more subtle but collectively no less problematic. Maybe Holmes was engaging in outright fraud, but for every one Holmes doing that, there's probably 100s across various fields bending the truth systematically to various degrees short of what Theranos represents.

sumedh 5y ago

> Elizabeth Holmes made representations which she knew to be false to secure investments. Lot of companies do that atleast with software. Didnt Bill Gates tell IBM that they have an OS when they didnt and then bought an OS from someone else?

projektfu 5y ago
Being on the purchasing end of things, I see it pretty commonly with software. While it's being sold, they tell you that it does things. During installation, they tell you those things are having the bugs ironed out and will be available soon. After installation and a few months of use, they ask you to participate in a focus group about how the features should look when they get around to starting them. However, the software people rarely try to gaslight you into believing that the features actually do exist and you don't need them anyway. At least, in my experience. And, when pressed by customers, they usually fess up that the features are still "under development". Listening to the "The Dropout" podcast, the thing that is striking is that Theranos had a bunch of things they said to investors and customers (Walgreens, Safeway) that they would not fess up to in deposition before the SEC. All of a sudden, the genius founder can't remember hardly anything of what happened in the last 10 years. I don't doubt that Holmes wanted it to work. I think she thought that in the first few years, her R&D lab would actually be producing a machine that did what they claimed, and that they'd just be running the tests in house until the FDA approval came to sell them to everyone and his dog. But it seems she and the other brass didn't want to ever hear that they were not succeeding. And so they had to lie. I was pretty disappointed because the articles about it made it seem like she had made or been part of a breakthrough in her undergraduate research to dramatically reduce the sample size. Imagine the applications in veterinary medicine! But this was not the case, she took existing tech and then started raising investment on the promise that it could be extended by sufficiently smart people, and then sold an image of herself as a prodigy to keep the ball rolling, while immunizing herself to the reality of the actual performance of the machines.
andi999 5y ago
The big difference is that they knew they could make it fast. It is like you are a carpenter and say you have a table in stock which you didn't build yet. The big difference is she didn't have anything and no viable path to deliver it. A fundamental step had to be made which wasn't there. It is like promising anti gravity flight. If you have a functioning anti gravity Prototyp you can probably make a plane with enough engineering. If you don't it will not happen no matter how much money you pour in.