Funny, this whole thing reminds me of that Futurama episode when Fry is convinced by a snazzy partner to launch a startup with all pizzazz and show and no actual substance. The goal of course is to angle for a buyout/cashout while eventually jilting the investors. This is really what Theranos has done.
Let’s look at the facts behind the situation:
- Elizabeth Holmes assembles a prestigious group of people more for their credential and connections than for actual talent and knowledge of the industry
- She dresses like and bills herself as the female Steve Jobs, leveraging her Stanford professor and school name
- The company says it has a secret technology that will disrupt and revolutionalize the lab testing industry (if this were real, the 800 lb gorillas like Medtronic, which is making continuous glucose monitors for diabetics, and Quest, which processes many lab specimens, would have jumped on it already and innovated themselves or bought the technology from Stanford)
- The company actually ran some specimens on Quest machines and sent the results on as their own
- Internal dissenters who warned and tried to whistleblow were fired, bought out, or otherwise silenced
What can we learn from this? Well, the company is likely bankrupt from shareholders and the FDA bombarding it with lawsuits. The stock is worthless. The big question that remains is whether Holmes gets to keep any of her salary and already cashed out stock, or if there’s some attempt to claw it back by shareholders. If the clawback is unsuccessful, this will set a precedent for future entrepreneurs that selling the idea is more important than having an actual product.
So go ahead and try it at home. Craft a pitch of a zany idea backed by data that makes it plausible. Hype it up, attract investors, grow the userbase (easy to do in tech) or hire enough big name people to generate enough buzz, and then cash out or sell out.