[ad_1]
This article is part of the On Tech newsletter. Here is a collection past columns.
Elizabeth Holmes, founder of the failed blood test attempt Theranos approaching the end of a criminal case to determine whether he has deliberately misled investors, patients, and doctors in his company.
The fundamental question in the case is the line between fraud and scam. The “imitate until you do” ethic in Silicon Valley. Theranos also feels like an extreme result of a financial system that often rewards blindly tossing money while hunting for the winning starting lottery ticket.
Start-up investors are proud to find promising young companies, but their business is kind of bullshit. All investments are very luck. But supporting startups is essentially a bet that few wins can offset a lot of lemons. Beginning traders can, in theory, lose all their money 99 times out of 100 and the next Google is worth it.
This startup venture capital system, until recently, finance is a small corner, but it has a huge impact. He’s helped us bring iPhones, electric cars, social media, and life-saving drugs. The system also has baked-in incentives to not look too hard for sometimes shoddy funding and overlook bad behavior.
In the Holmes case, some financial professionals admitted to writing checks to Theranos without seeing the financial statements or doing much to validate its technology and promises. despite the company’s skepticism about its claims. Theranos raised nearly $1 billion from investors, and that evaporated when the company closed. close in 2018.
Theranos had a big vision to make blood tests faster, cheaper and more accessible. But they do not use their machine to do laboratory tests with blood from a pinhole. it didn’t work as the company says. The question now is whether Holmes knew Theranos would be able to keep his promises and whether he lied about it. He pleaded not guilty and testified He said he had no intention of defrauding or deceiving anyone.
My Colleague as Erin Griffith reportedHolmes’ lawyers said investors in the company should know better and do their own due diligence. (Some did.) Prosecutors said they made their decisions based on false information.
Maybe some of the investors who bet on Theranos were ignorant or careless. But believing in promises that are too good to be true not necessarily disqualifying on initial investments. If the task is to find a handful of diamonds in a sea of garbage, it may not be worth spending the time and resources to weed out potential failures or frauds.
Sometimes, half-jokingly, I wonder if the people who have researched the world to grow tech superstars and make them successful would be better off throwing cash at anyone with a business idea and leaving them alone. It’s not too far SoftBank’s strategy, a Japanese conglomerate that is one of the world’s largest start-up investors.
This is not fruitless. Investors and boards of directors often give startup founders a lot of power and not much oversight. Some startup managers spend years building puny businesses without supporters calling them for it. Others to pay themselves lots of money or manage their business like a fraternity house.
Part of me understands the cold rationality of being lax with young companies. Maybe Adam Neumann intent turn WeWork, the office rental company he helped found, to a trillion dollar companyIf investors let him do what he wants. If he does, wealth will rain down on everyone. If he doesn’t – and didn’t — investors gravitate towards the next potential winning ticket. (Neumann was not charged with fraud and WeWork continued without him.)
Holmes said at his hearing that he wanted investors to paint a big picture of the big change Theranos could unleash to the world. In essence, he said, if Theranos had more time, it could be the life-changing company he dreamed of.
Convicted or not, Holmes is right about the nature of start-up investments. he is is about believing in a fantasy. Sometimes this thread becomes Tesla and many people become rich. And sometimes that fantasy flies away. It’s part of the package.
Before you go …
-
Tornado tracking technology saves lives: Thanks to Doppler radar and other technologies, meteorologists now advance warnings for nearly all severe hurricanes My colleagues in the United States, Thomas Fuller and Tariro Mzezewa, report. The number of people killed by hurricanes has decreased significantly, but people are still dying.
-
Fast fashion but FASTER: of china Shein has become one of the most popular online clothing stores in the world by researching fashion trends online, leveraging the networks of Chinese garment factories, and unraveling the secrets of reaching shoppers on Amazon and other sites. Shein can be a fashionista, and this Rest of the World article states that ultra-fast fashion can be terrible for the environment.
-
New Year’s resolutions for technology: I won’t ruin them all Smart ideas in Brian X. Chen’s column, but one of his recommendations is that we pay more attention to our modems and other relatively boring gadgets that carry the internet into our homes.
hug this
there were two zebras free in suburban Maryland for almost four months. They were finally caught last week.
[ad_2]
Source link