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
Except that the investors gave the keys of their cars to Holmes. Holmes didn't grab their money without their permission.
Mine certainly does
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?
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.
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.
Looks more like she "messed with the wrong mf'ers" as they say. Tbf, $1 billion is a lot of money.
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.