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Theranos' Death Rattle


TwiceHorn

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On 7/18/2018 at 10:02 PM, CooterBrown said:

I was most shocked that when they told Murdock about the upcoming story after he’d invested, he didn’t get in the way at all. He did sell sell all his stock back for $1 so he took a $125M loss on his taxes.

 

The book was fantastic. That gem stuck in my mind as well ... sort of goes against the fake news narrative of Murdoch as this svengali that controls this vast media messaging.

I still cannot believe she was able to get so much money from so many people and have literally nothing ... I assume she had something but it just was not as good as advertised ... the only thing she had was an idea. #pussyisundefeated

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1 hour ago, Kyle said:

The book was fantastic. That gem stuck in my mind as well ... sort of goes against the fake news narrative of Murdoch as this svengali that controls this vast media messaging.

I still cannot believe she was able to get so much money from so many people and have literally nothing ... I assume she had something but it just was not as good as advertised ... the only thing she had was an idea. #pussyisundefeated

Usually investors putting > $1M into a startup do very thorough diligence. Verifying revenue numbers, reviewing employment agreements, interviewing clients about the quality of your product, etc. Holmes basically said “we’re not willing to do any of that and  have plenty of interest from other investors if you insist”. Amazingly this strategy worked to to the tume of $750M.

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1 hour ago, Auto Driller said:

Usually investors putting > $1M into a startup do very thorough diligence. Verifying revenue numbers, reviewing employment agreements, interviewing clients about the quality of your product, etc. Holmes basically said “we’re not willing to do any of that and  have plenty of interest from other investors if you insist”. Amazingly this strategy worked to to the tume of $750M.

Enron.  “You’re too stupid to understand and I don’t have time to explain it” on a quarterly call.

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13 hours ago, Auto Driller said:

Usually investors putting > $1M into a startup do very thorough diligence. Verifying revenue numbers, reviewing employment agreements, interviewing clients about the quality of your product, etc. Holmes basically said “we’re not willing to do any of that and  have plenty of interest from other investors if you insist”. Amazingly this strategy worked to to the tume of $750M.

About 18 mos ago I was contacted by a search firm asking if there was anyone in my network who they should speak with about an open Board seat at Theranos.  I had never heard of Theranos and started checking around...not my proudest moment as a few responded with "ahhh.....how 'bout NO!"

Saw over the weekend that Mad Dog Mattis was on the Board.

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There were a bunch of heavy hitters completely duped by Theranos.  It's kind of emblematic of the times right now.  Rush to get on the train of 'the next big thing' at all costs, without doing several levels of proper DD. Our media is most certainly that way, but even in the trading world we'll see some story come out on Twitter and a stock will jump or drop 15% instantly, then the news comes out that it isn't real and a reversal happens.  FOMO is a poor strategy in the short run, let alone the long run.  

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There is a new podcast about Theranos titled, "The Dropout." I just listened to the first episode and will keep up with it as I read the book.

The one thing that stuck out to me was how many people she hired away from Apple. One lead designer left 15,000 shares of Apple to go to Theranos at the beginning. That sucks. 

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45 minutes ago, Trey3216 said:

There were a bunch of heavy hitters completely duped by Theranos.

Imo, they wanted to be duped. 

Like the poster above who referenced Enron and the "you're too stupid to understand" conference call, and all the bozos who, years ago, bid up the internet stocks that had not even the semblance of a sound business model. They want to be the cool kids in high school and can't bother to do the grunt/analytical work.

I think I recall that Henry Kissinger and George Schultz were invested or on the Board of Theranos. 

Holmes should be in a federal prison for many years.

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1 hour ago, gecko said:

About 18 mos ago I was contacted by a search firm asking if there was anyone in my network who they should speak with about an open Board seat at Theranos.  I had never heard of Theranos and started checking around...not my proudest moment as a few responded with "ahhh.....how 'bout NO!"

Saw over the weekend that Mad Dog Mattis was on the Board.

 

1 hour ago, Trey3216 said:

There were a bunch of heavy hitters completely duped by Theranos.  It's kind of emblematic of the times right now.  Rush to get on the train of 'the next big thing' at all costs, without doing several levels of proper DD. Our media is most certainly that way, but even in the trading world we'll see some story come out on Twitter and a stock will jump or drop 15% instantly, then the news comes out that it isn't real and a reversal happens.  FOMO is a poor strategy in the short run, let alone the long run.  

One of the things that this emphasizes is "heavy hitters" or otherwise, corporate directors are, often as not, complete stooges for management.  And in glamorous companies like Theranos, it's a celebutante cocktail party with a six figure salary.

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Just now, Parliament said:

So the stooges get board seats, options, etc for the name-recognition they bring?  How much of their OWN MONEY did they put in?

Sometimes they are actual investors, sometimes they get options or warrants as part of their compensation, sometimes they aren't invested at all.  Reading Carreyrou's book, I didn't get the impression that the directors were a whole lot different from the directors of most publicly traded corporations, just a bit more gullible, blinded, or bullied by the blondo.

Given that directors are intended to be the real governance of a corporation, I find it startling how disengaged from the reality of the corporation are many or most of them.  It's not limited to Theranos in any way.

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55 minutes ago, TwiceHorn said:

Sometimes they are actual investors, sometimes they get options or warrants as part of their compensation, sometimes they aren't invested at all.  Reading Carreyrou's book, I didn't get the impression that the directors were a whole lot different from the directors of most publicly traded corporations, just a bit more gullible, blinded, or bullied by the blondo.

Given that directors are intended to be the real governance of a corporation, I find it startling how disengaged from the reality of the corporation are many or most of them.  It's not limited to Theranos in any way.

They rubber-stamp executive compensation recommendations.  That's a pretty big job, and a pretty good racket

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  • 4 weeks later...

This is allsome.

She gets a husky, names it Balto, tells people it’s a wolf, walks it around Theranos despite protests from the scientists. And it wasn’t potty trained. It would literally shit in the board room during meetings. 

She enrolls Balto in search and rescue training, but he failed out because husky.

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3 minutes ago, HenryJames said:

This is allsome.

She gets a husky, names it Balto, tells people it’s a wolf, walks it around Theranos despite protests from the scientists. And it wasn’t potty trained. It would literally shit in the board room during meetings. 

She enrolls Balto in search and rescue training, but he failed out because husky.

Had to find a breed with a deeper voice than hers

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On 1/28/2019 at 9:05 AM, Telegraph_it said:

There is a new podcast about Theranos titled, "The Dropout." I just listened to the first episode and will keep up with it as I read the book.

The one thing that stuck out to me was how many people she hired away from Apple. One lead designer left 15,000 shares of Apple to go to Theranos at the beginning. That sucks. 

I have listened the the podcast. Like TV news has done since it started, not much new reporting but adds sound to Carreyrou's book. Not to imply it is bad, but not a ton of new stuff. That being said, one dot I think it connected more was the role of her original mentor at Stanford, Channing Robertson, and the role he played. Given his CV, he should have called bullshit on day one. I inferred from the podcast that Robertson provided credibility early that got many of the early people on board - who would question a Stanford professor? Then everyone else was "if X is doing it, it must be okay." Then it just snowballed: credibility begot credibility. That plus the overwhelming desire to parade a hot chick around Silicon Valley as a genius a la the girl that fucked up Yahoo, and there you go.

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19 minutes ago, Kyle said:

I have listened the the podcast. Like TV news has done since it started, not much new reporting but adds sound to Carreyrou's book. Not to imply it is bad, but not a ton of new stuff. That being said, one dot I think it connected more was the role of her original mentor at Stanford, Channing Robertson, and the role he played. Given his CV, he should have called bullshit on day one. I inferred from the podcast that Robertson provided credibility early that got many of the early people on board - who would question a Stanford professor? Then everyone else was "if X is doing it, it must be okay." Then it just snowballed: credibility begot credibility. That plus the overwhelming desire to parade a hot chick around Silicon Valley as a genius a la the girl that fucked up Yahoo, and there you go.

Yeah, I kind of wondered about Robertson, but I concluded that her "macro" ideas were plausible, even to him.  Further, I think most engineering professors, or professors generally, might be reluctant to shit all over a young, earnest student and perhaps even somewhat awed by her dropping out to pursue the idea while hiring gifted technologists like Ian Gibbons.

Also, I looked him up, and he has a long history of expert testimony in litigation, but almost no experience (on his CV at least) in business.  So, he apparently got kind  of entrepreneurial with his "experting," and probably saw Theranos as another opportunity to feather his nest to his greater glory.

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2 minutes ago, immortal13 said:

Do you guys think she had deluded herself into believing she could bring this idea to fruition or did she know that sooner or later the jig would be up?

I don't know.  I think she's pretty delusional all around.  You see it a lot in tech, an interesting idea that seems feasible at the outset, but when you get into the devilish details, it all falls apart.  Usually, though, there isn't a whole company built around the one idea.  It's one of several and there is management and esteemed colleagues to bring the inventor back down to earth.

I sense that there is a lot of Theranos-type stuff, on a smaller scale, in SV.

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Similar mindset to the guy that conned everyone with Fyre Festival, IMO. I think he and Holmes both truly thought they would pull these things off, even to the day it finally came crashing down. Not sure what that disorder is, but I think it’s genuine belief in the face of facts that make it impossible. 

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40 minutes ago, Mach 1 said:

Didn't even click on the link but I know it well.  One of the dumber ideas and lulz-y stories to ever come out of Silicon Valley.

Only in Silcon Valley are things like Juicero and people like Holmes taken seriously.

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20 minutes ago, Aqua Buddha said:

Didn't even click on the link but I know it well.  One of the dumber ideas and lulz-y stories to ever come out of Silicon Valley.

Only in Silcon Valley are things like Juicero and people like Holmes taken seriously.

The founder had juice *experience*!! You don’t make money passing up opportunities like that.

/VC

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I don't know what's more lulzy about that story: that these assholes thought there was a market for $10 Capri Sun, or that people thought they were getting over when they figured out you could squeeze the $10 Capri Sun without the machine.
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A little off topic but the Silcon Valley jargon is bleeding over into other industries, like real estate and construction, to try and sound hip and edgy.  Companies are forming that want to manufacture entire buildings off site, then truck them in large sections and bolt everything together.  As a potential customer,  I was asked to sign an NDA to have access to look at their "IP" and better understand their "platform."   WTF?  What you're doing is called prefab, just give me a brochure and a Power Point presentation.

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16 hours ago, Mach 1 said:

A little off topic but the Silcon Valley jargon is bleeding over into other industries, like real estate and construction, to try and sound hip and edgy.  Companies are forming that want to manufacture entire buildings off site, then truck them in large sections and bolt everything together.  As a potential customer,  I was asked to sign an NDA to have access to look at their "IP" and better understand their "platform."   WTF?  What you're doing is called prefab, just give me a brochure and a Power Point presentation.

Bro, it’s category killing innovation. Disruptors don’t just give away their IP.

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As an IP lawyer for nearly 30 years, laboring in total obscurity for half that time, this whole thing amuses me.

20 hours ago, Mach 1 said:

A little off topic but the Silcon Valley jargon is bleeding over into other industries, like real estate and construction, to try and sound hip and edgy.  Companies are forming that want to manufacture entire buildings off site, then truck them in large sections and bolt everything together.  As a potential customer,  I was asked to sign an NDA to have access to look at their "IP" and better understand their "platform."   WTF?  What you're doing is called prefab, just give me a brochure and a Power Point presentation.

 

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Reading the book. Shocked by the following passage (not):

"Sunny had elevated a group of ingratiating Indians to key positions. One of them was Sam Anekal, the manager in charge of integrating the various components of the miniLab who had clashed with Ian Gibbons. Another was Chinmay Pangarkar, a bioengineer with a Ph.D. in chemical engineering from the University of California, Santa Barbara. There was also Suraj Saksena, a clinical chemist who had a Ph.D. in biochemistry and biophysics from Texas A&M. On paper, all three had impressive educational credentials, but they shared two traits: they had very little industry experience, having joined the company not long after finishing their studies, and they had a habit of telling Elizabeth and Sunny what they wanted to hear..."

If you want someone to toe the company line, that's a good choice.

 

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People are willing to overlook a lot of red flags if they think they can make a shit ton of money doing it. Lots of money has been made in this country by backing emerging technology, and lots of investors and board members signed on solely because the buzz had reached "11". Greed will always result in people who should know better getting burned.

 

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