4 ms·

I hope everyone learns their lesson from this - only lie to poor people. Someday we will have to reckon with the fact that SV founder culture encourages this k

I hope everyone learns their lesson from this - only lie to poor people. Someday we will have to reckon with the fact that SV founder culture encourages this kind of behaviour.

khazhoux 4y ago
No, it does not encourage this behavior. And that’s why Elizabeth Holmes sucks. SV thrives on trust, not on deceipt. There’s a big difference between a founder saying “I’m going to change the world!”, which is optimism mixed with naïveté, versus a founder saying “my technology works!” when they know it does not.
- walrus01 4y ago
  I mean this in the nicest way possible, but are you old enough to have been around for the "dotcom 1.0" boom money, VC funding, startups and irrational exuberance of investment in anything tech related from 1995-2000? It's always been like this.
  - khazhoux 4y ago
    Yyup, I’ve been here a long time. I’m not saying there hasn’t been fraud, but the SV Way is not to outright lie about the core technology, as EH did. Dotcom 1.0 was full of hucksters and it rightly crashed. The hasn’t been the norm in this newer era of YC, A16Z, First Round, etc. Integrity is valued and expected.
    - voisin 4y ago
      > The hasn’t been the norm in this newer era of YC, A16Z, First Round, etc. Integrity is valued and expected. And yet Sequoia was an investor and huge proponent of FTX.
      - khazhoux 4y ago
        I may need to recalibrate in light of FTX. Did Sequoia know what was really happening?
        voisin 4y ago
        If the bluest of blue chip VCs didn’t know, is that better or worse?
        TheOtherHobbes 4y ago
        I think when/if SBF comes to trial we'll be able to tell how corrupt the culture is. If he walks without at least a double digit sentence, that's going to Raise Some Questions.
    - potatolicious 4y ago
      I think there's a big gap between the idealized notion of the "SV Way" and how it has been practiced in actuality. Like, how can we say Holmes is an outlier when we had literally all of crypto? Sure we're all (rightfully!) ragging on the FTX thing, but the sheer amount of fraud in the space generally was mind-boggling and treated as a matter of course! If anything the last several years has convinced me that the VC emperors truly have no clothes - the level of diligence done throughout the gig economy hype cycle, and then followed by the crypto hype cycle, is frankly embarrassing. We spent the past several years at least dealing with a non-stop train of hucksters!
    - jen20 4y ago
      One read of the “jepsen” articles completely disproves this for database startups, most of whom have fundamentally lied about their core technology. I’m sure there are further examples should anyone care to do that level of digging.
  - voisin 4y ago
    I concur with your assessment. There is a very strong “fake it till you make it” mentality. Run fast and break things (FB), ignore the rules and regulations (AirBNB, Uber), etc. she wasn’t really doing anything that most other startups don’t do all the time, she just did it more “successfully”.
    - imgabe 4y ago
      The key part of the “fake it til you make it” strategy, and this is what Holmes missed, is that you do eventually have to make it.
      - lotu 4y ago
        Most startups don't eventually make it, they fail, we just only remember the ones that succeeded.
      - walrus01 4y ago
        The key part of "fake it til you make it" is significantly less harmful if you're making some novel software product or tech hardware gadget (like all the bankrupt attempts at new handheld gaming consoles) versus a medical diagnostics apparatus.
- mbesto 4y ago
  > SV thrives on trust, not on deceipt. Depends highly on the who the deception is against.
Cupertino95014 4y ago
It does and her fangirl'ing of Steve Jobs is notorious. But she was in a different field than Jobs was. The problem is, the medical field has stricter laws around it, and it's much easier to prove that someone is lying.
givemeethekeys 4y ago
I agree that lying to people wealthier and more powerful than you is a dangerous endeavor - it has alway been. If you're suggesting that SV culture encourages lying more than, Wall Street, Hollywood, Shenzhen, Bengaluru or any other place where large amounts of money moves to high risk ideas, then I disagree. It's at most the same, if not significantly less corrupt. If you're suggesting that SV culture enourages lying to rich people more than other places, then I think you're misinformed about rich people.
kkielhofner 4y ago
I have quite a few people in my life who were convinced she wouldn't be convicted. I had to remind them she stole from and (more importantly) embarrassed extremely powerful and well connected people. This is the double-edged sword of the composition of the Theranos board and high profile investors. It really makes the whole thing even more astonishing. Not only are you constantly lying, defrauding, etc but you're doing it to former Secretaries of State, a former Secretary of Defense, four star generals, etc. These facts are why I think this is just pathological for her. I couldn't imagine screwing over people who have literally spent their lives implementing United States foreign policy and managing armed forces who by their intended purpose have killed a lot of people. I would live every day completely terrified. I mean this isn't a Putin opponent but still... As one example George Schultz considers his involvement in Theranos to have completely destroyed his legacy. Ouch. The justice system kind of "is what it is" but in this case there were a lot of people with a lot of weight to throw around to tip the scales.
- bmitc 4y ago
  I'm not sure I feel bad for George Shultz. His grandson gave him the knowledge he needed and instead of being a part of the solution in outing the fraud, he decided to take the side of Theranos and pressured his grandson to keep quiet instead of backing him. Kudos to Tyler Shultz going through all that.
  - kkielhofner 4y ago
    I should have been clearer - I don't feel bad for Shultz, Kissinger, Mattis, Perry or any of the others. I'm just trying to point out how brazen this fraud was considering you're messing with people who can hit back - to put it mildly. More than that, they've spent their entire lives in the ring. Yes, and a shoutout to Tyler Shultz!
    - bmitc 4y ago
      No worries. I was just jumping off your comment if anything, and not necessarily replying. And yes, I cannot imagine how stressful it must have been for Tyler.
baby 4y ago
I'm guessing things might have been a bit different if it wasn't also playing with people's health?
jillesvangurp 4y ago
The lesson here is that that investors can blame founders for their own stupidity and walk free with their reputations intact and their very questionable behavior unchallenged. And several of those weren't betting with their own money of course. Which IMHO makes them negligent in a way that you might argue is actually fraudulent. You might even argue that some of them were maybe willingly part of this fraud and just looking the other way on the off chance that this thing might have exited before the shit hit the fan. Raise lots of hype, offload the company, via some exit and cash in before the whole pyramid scheme implodes. That too is part of SV founder culture. Business as usual if it doesn't work. Great success if it does. Nobody seems to be talking much about the elephant in the room here BTW; which is that this is about a pretty young woman dealing with male investors in a culture where sexism, harassment, etc. are routinely covered up by disingenuous political correctness. It seems we just don't talk about this and pretend it wasn't a huge factor both with investors being taken for the fools they were, the media drooling all over this because having cute women on the front page is great for business, the public interest in Ms. Holmes (same), the near complete lack of that for her male co-conspirator, and a (male) judge taking the side of the cringe worthy crowd of crocodile shedding wealthy male "victims" demanding revenge for being taken advantage of by a pretty woman. If she was male this company would not have raised this much and the related fraud would not be front page news. Nor would the sentence be this high because this is business as usual in SV. It's a harsh sentence for two kids to have to grow up with mummy in prison.
- pbhjpbhj 4y ago
  >It's a harsh sentence for two kids to have to grow up with mummy in prison. // Holmes herself is entirely responsible for that though, right. She gave that "sentence".
  - jillesvangurp 4y ago
    It was demanded by an angry mob of mostly male victims and accommodated by a male judge. You can't deny a certain amount of bias and sexism here. And a fair judge might rule differently and perhaps not separate kids from their mother. Having kids is not an excuse of course. This judge sentenced more than the prosecutor even asked. Seems harsh and petty to me to do that. As it is, judges are elected officials in the US that dependent on campaign financing and support. Guess where the money is in Silicon Valley? Hard to prove that connection of course but this looks like the rich and wealthy "victims" buying some vengeance and getting it.

I hope everyone learns their lesson from this - only lie to poor people. Someday we will have to reckon with the fact that SV founder culture encourages this kind of behaviour.

khazhoux 4y ago

No, it does not encourage this behavior. And that’s why Elizabeth Holmes sucks. SV thrives on trust, not on deceipt. There’s a big difference between a founder saying “I’m going to change the world!”, which is optimism mixed with naïveté, versus a founder saying “my technology works!” when they know it does not.

walrus01 4y ago
I mean this in the nicest way possible, but are you old enough to have been around for the "dotcom 1.0" boom money, VC funding, startups and irrational exuberance of investment in anything tech related from 1995-2000? It's always been like this.
- khazhoux 4y ago
  Yyup, I’ve been here a long time. I’m not saying there hasn’t been fraud, but the SV Way is not to outright lie about the core technology, as EH did. Dotcom 1.0 was full of hucksters and it rightly crashed. The hasn’t been the norm in this newer era of YC, A16Z, First Round, etc. Integrity is valued and expected.
  - voisin 4y ago
    > The hasn’t been the norm in this newer era of YC, A16Z, First Round, etc. Integrity is valued and expected. And yet Sequoia was an investor and huge proponent of FTX.
    - khazhoux 4y ago
      I may need to recalibrate in light of FTX. Did Sequoia know what was really happening?
      - voisin 4y ago
        If the bluest of blue chip VCs didn’t know, is that better or worse?
      - TheOtherHobbes 4y ago
        I think when/if SBF comes to trial we'll be able to tell how corrupt the culture is. If he walks without at least a double digit sentence, that's going to Raise Some Questions.
  - potatolicious 4y ago
    I think there's a big gap between the idealized notion of the "SV Way" and how it has been practiced in actuality. Like, how can we say Holmes is an outlier when we had literally all of crypto? Sure we're all (rightfully!) ragging on the FTX thing, but the sheer amount of fraud in the space generally was mind-boggling and treated as a matter of course! If anything the last several years has convinced me that the VC emperors truly have no clothes - the level of diligence done throughout the gig economy hype cycle, and then followed by the crypto hype cycle, is frankly embarrassing. We spent the past several years at least dealing with a non-stop train of hucksters!
  - jen20 4y ago
    One read of the “jepsen” articles completely disproves this for database startups, most of whom have fundamentally lied about their core technology. I’m sure there are further examples should anyone care to do that level of digging.
- voisin 4y ago
  I concur with your assessment. There is a very strong “fake it till you make it” mentality. Run fast and break things (FB), ignore the rules and regulations (AirBNB, Uber), etc. she wasn’t really doing anything that most other startups don’t do all the time, she just did it more “successfully”.
  - imgabe 4y ago
    The key part of the “fake it til you make it” strategy, and this is what Holmes missed, is that you do eventually have to make it.
    - lotu 4y ago
      Most startups don't eventually make it, they fail, we just only remember the ones that succeeded.
    - walrus01 4y ago
      The key part of "fake it til you make it" is significantly less harmful if you're making some novel software product or tech hardware gadget (like all the bankrupt attempts at new handheld gaming consoles) versus a medical diagnostics apparatus.
mbesto 4y ago
> SV thrives on trust, not on deceipt. Depends highly on the who the deception is against.

Cupertino95014 4y ago

It does and her fangirl'ing of Steve Jobs is notorious. But she was in a different field than Jobs was. The problem is, the medical field has stricter laws around it, and it's much easier to prove that someone is lying.

givemeethekeys 4y ago

I agree that lying to people wealthier and more powerful than you is a dangerous endeavor - it has alway been. If you're suggesting that SV culture encourages lying more than, Wall Street, Hollywood, Shenzhen, Bengaluru or any other place where large amounts of money moves to high risk ideas, then I disagree. It's at most the same, if not significantly less corrupt. If you're suggesting that SV culture enourages lying to rich people more than other places, then I think you're misinformed about rich people.

kkielhofner 4y ago

I have quite a few people in my life who were convinced she wouldn't be convicted. I had to remind them she stole from and (more importantly) embarrassed extremely powerful and well connected people. This is the double-edged sword of the composition of the Theranos board and high profile investors. It really makes the whole thing even more astonishing. Not only are you constantly lying, defrauding, etc but you're doing it to former Secretaries of State, a former Secretary of Defense, four star generals, etc. These facts are why I think this is just pathological for her. I couldn't imagine screwing over people who have literally spent their lives implementing United States foreign policy and managing armed forces who by their intended purpose have killed a lot of people. I would live every day completely terrified. I mean this isn't a Putin opponent but still... As one example George Schultz considers his involvement in Theranos to have completely destroyed his legacy. Ouch. The justice system kind of "is what it is" but in this case there were a lot of people with a lot of weight to throw around to tip the scales.

bmitc 4y ago
I'm not sure I feel bad for George Shultz. His grandson gave him the knowledge he needed and instead of being a part of the solution in outing the fraud, he decided to take the side of Theranos and pressured his grandson to keep quiet instead of backing him. Kudos to Tyler Shultz going through all that.
- kkielhofner 4y ago
  I should have been clearer - I don't feel bad for Shultz, Kissinger, Mattis, Perry or any of the others. I'm just trying to point out how brazen this fraud was considering you're messing with people who can hit back - to put it mildly. More than that, they've spent their entire lives in the ring. Yes, and a shoutout to Tyler Shultz!
  - bmitc 4y ago
    No worries. I was just jumping off your comment if anything, and not necessarily replying. And yes, I cannot imagine how stressful it must have been for Tyler.

baby 4y ago

I'm guessing things might have been a bit different if it wasn't also playing with people's health?

jillesvangurp 4y ago

The lesson here is that that investors can blame founders for their own stupidity and walk free with their reputations intact and their very questionable behavior unchallenged. And several of those weren't betting with their own money of course. Which IMHO makes them negligent in a way that you might argue is actually fraudulent. You might even argue that some of them were maybe willingly part of this fraud and just looking the other way on the off chance that this thing might have exited before the shit hit the fan. Raise lots of hype, offload the company, via some exit and cash in before the whole pyramid scheme implodes. That too is part of SV founder culture. Business as usual if it doesn't work. Great success if it does. Nobody seems to be talking much about the elephant in the room here BTW; which is that this is about a pretty young woman dealing with male investors in a culture where sexism, harassment, etc. are routinely covered up by disingenuous political correctness. It seems we just don't talk about this and pretend it wasn't a huge factor both with investors being taken for the fools they were, the media drooling all over this because having cute women on the front page is great for business, the public interest in Ms. Holmes (same), the near complete lack of that for her male co-conspirator, and a (male) judge taking the side of the cringe worthy crowd of crocodile shedding wealthy male "victims" demanding revenge for being taken advantage of by a pretty woman. If she was male this company would not have raised this much and the related fraud would not be front page news. Nor would the sentence be this high because this is business as usual in SV. It's a harsh sentence for two kids to have to grow up with mummy in prison.

pbhjpbhj 4y ago
>It's a harsh sentence for two kids to have to grow up with mummy in prison. // Holmes herself is entirely responsible for that though, right. She gave that "sentence".
- jillesvangurp 4y ago
  It was demanded by an angry mob of mostly male victims and accommodated by a male judge. You can't deny a certain amount of bias and sexism here. And a fair judge might rule differently and perhaps not separate kids from their mother. Having kids is not an excuse of course. This judge sentenced more than the prosecutor even asked. Seems harsh and petty to me to do that. As it is, judges are elected officials in the US that dependent on campaign financing and support. Guess where the money is in Silicon Valley? Hard to prove that connection of course but this looks like the rich and wealthy "victims" buying some vengeance and getting it.