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This is sort of par for the course in the world of early stage startups. No one wants to be your first customer as it is risky, but you need that first custome
by bhouston 3y ago
This is sort of par for the course in the world of early stage startups. No one wants to be your first customer as it is risky, but you need that first customer. So you "fake it until you make it."
It is similar to dressing the part you want - at least when that mattered. You buy more expensive clothes than you should be able to afford so that people think you are more successful than you are, and then they are more willing to bet on you, and then you become more successful.
There is nothing that is a red flag for me in the above story.
I also had a prospective first client want to visit our offices so I quickly rented an office and asked my part-time contractors to all come into the office that day to fill it out. It worked! And then I could afford an office and hiring those part-time contractors as full-time employees. So it was sort of a self-fulfilling.
- jen20 3y ago> There is nothing that is a red flag for me in the above story. Elizabeth? Is that you?
- refurb 3y agoIf Elizabeth Holmes had been able to pull off some successful product that made a lot of money, no doubt all the "fake it 'til you make it" she did at the beginning (showing demos that didn't work, sending tests to outside labs and saying they were run on their equipment) would have been forgiven no doubt. Just another nostalgic Silicon Valley "hustler" story.
- kelipso 3y agoShe really only got into trouble because her lies became obvious and she risked people's lives. If it was some CRUD app and she didn't get enough customers or whatever, more than likely she'd have gotten money for another company.
- shapefrog 3y ago> she risked people's lives She was found not guilty of that bit. The conviction and jail time is only for defrauding the investors.
- hef19898 3y agoOnly that Theranos product was techically impossible. Which makes the whole thing even crazier, nobody did even the slightest due dilligence there. Seems to be par of th cours so, other exhibits are FTX and WeWork.
- bhouston 3y agoThe core FTX crypto exchange business was very profitable. But Alameda wasn't. Also everyone at FTX was committing fraud.
- hef19898 3y agoBased on what financial statements do we know FTX was profitable? Also, the stole customer funds.
- bhouston 3y ago> Based on what financial statements do we know FTX was profitable? The crypto-exchange part I have read many times it was profitable. Running an exchange is a profitable endeavour as you just take a cut of all transactions. As long as you control your costs it is a money printer. The rest of FTX was full of fraud and Alameda was a money sink via unprofitable speculation. Also likely helping laundry money as well via poor KYC. Running an exchange is a great business though if you have the volume, doesn't matter if it is crypto or futures or stocks.
- play_ac 3y agoNo, crypto exchanges are only profitable as a result of massive wash trading and scamming. If they had to actually compete the margins would be hilariously low. Probably even lower than a typical bank because the product is just worse.
- JumpCrisscross 3y ago> If Elizabeth Holmes had been able to pull off some successful product Like Loopt?
- astrange 3y agoTheranos wasn't a Silicon Valley company - nobody in SV invested in it except Draper (who's a nutcase) because they all thought it was a scam. It was an affinity fraud on non-SV rich people founded on acting like a tech company.
- shalmanese 3y agoI think OPs point was that this was sama finding the line of what was the most egregious thing that is acceptable to admit in public which is almost certainly not the most egregious thing he's done and could be a large part of the explaination of why people's opinion of him knowing certain private actions diverges so much from everyone else.
- Jochim 3y agoI believe such behaviour is harmful and that we shouldn't be rewarding those that engage in it.
- 8note 3y agoThe bad behaviour is predicating the purchase on seeing the office. Having an office doesn't make a company real, nor any more or less likely to execute on the project
- Jochim 3y agoBoth can be bad. Even more so when you don't know which party established the idea as bad in the first place. A purchaser who insists they only see white employees in the office is bad. Anyone that forces their non-white employees out of sight to secure that purchase is just as bad, if not worse. To play along is to accept the notion, to contribute to it's perceived validity, and to harm anyone who happens to be honest. The result is that people we'd be better off without are pushed upwards in society.
- cma 3y ago> Having an office doesn't make a company real or less likely to execute on the project Having real employees vs sham ones does imply a lot about a business, even if it isn't a perfect signal.
- saiya-jin 3y agoInteresting viewpoint, lie is a lie and amoral is amoral. We can wrap it in nice package or act like 'it had to be done because others are doing it', and it may be a correct statement. But its still a plain in-your-face lie. If that telco would know truth they would most probably cut them out, not due to their size but due to their lies. This is not how trust is built, this is how you lose it very quickly and for good. Maybe we need to accept that this is expected from all startup owners/ceos. Fine with me too, but its still amoral. We define our own legacy, if we ever care (and these mega egos do care a lot).
- JumpCrisscross 3y ago> This is sort of par for the course in the world of early stage startups It’s so par of the course that I’m willing to bet it didn’t happen.