
Don’t Blame Silicon Valley for Theranos - hvo
http://www.nytimes.com/2016/04/27/opinion/dont-blame-silicon-valley-for-theranos.html?action=click&pgtype=Homepage&version=Moth-Visible&moduleDetail=inside-nyt-region-1&module=inside-nyt-region&region=inside-nyt-region&WT.nav=inside-nyt-region&_r=0
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adrenalinelol
It's funny that the times (along with many others) was essentially a PR
mouthpiece for Theranos less than 6 months ago[0]. In the article I cited,
Teranos is lumped in with other darling unicorns (which have proven products).
The news media did just as much due diligence as the investors (next to none)
with Thernaos; I find it somewhat hypocritical to be calling out VCs without
admitting to some blame themselves.

0:
[http://www.nytimes.com/interactive/2015/10/12/t-magazine/eli...](http://www.nytimes.com/interactive/2015/10/12/t-magazine/elizabeth-
holmes-tech-visionaries-brian-chesky.html)

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adevine
Thanks for posting that. That was a painful read, not just about Elizabeth
Holmes, but for the almost-religious hyperbole heaped on all those people. I
know it's "T Magazine", and not NYT "proper", but the New York Times should be
embarrassed by that article.

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albedoa
Notably, it was written by Laura Arrillaga-Andreessen. Probably not the best
attempt at avoiding conflicts of interest.

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bravo22
Nice catch!

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CPLX
This is unmitigated bullshit. The firm was launched into its ludicrous
fundraising path via her relationship with Tim Draper, the consummate Silicon
Valley insider, and even the article points out that the fundraising was
pretty much all SV. Just not _the right_ Silicon Valley, you know.

This should be in a textbook as the archetypal "No True Scotsman" argument.

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on_
Maybe you are right, but what are we blaming silicon valley for? Being wrong
on a venture investment? I don't really understand any of this. A well funded
company was unsuccessful in a spectacular fashion, and the people who thought
it would be and are to "blame" lost money. Sounds like the system working.

Clinkle also lost a ton of money for a lot of pretty smart people. I blame
silicon valley because it was their fault they made a bad investment (as much
as SV can be a collective group). I mean, I bet like 1/10 companies they fund
fail. Some comitted fraud, some had shitty biz plans, some failed for no
reason.

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braythwayt

      > what are we blaming silicon valley for? Being wrong on a venture investment? 
    

An "investment" is a passive activity. Activities designed to increase the
value of the investment by creating the illusion of value are a different
matter, and regulated by law and informally by moral standards.

I think the general feeling is that the investors did far more than merely
throw a few bucks at Theranos.

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AndrewKemendo
I don't think this is correct, especially when considering the rights that
Board members Directors and Officers have.

They can go out and make deals, do press etc... all within their rights as
board members - in fact that's what they are for.

Investments are passive only for non-accredited shareholders.

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braythwayt
If you are telling me that someone is a Director or Officer, they are no
longer "just investing," and therefore we needn't just shrug and say, "They
made a bad investment, so what?"

Having made a bad investment, as a Director or Officer, they had a
responsibility to blow the whistle on malpractices, enforce proper procedures,
fire the CEO long before the CEO was in a position to be barred from the
industry, &c. &c.

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AndrewKemendo
_we needn 't just shrug and say, "They made a bad investment, so what?"_

Well I haven't made a statement on that either way - but I wouldn't advocate
for that.

It is however up to their own judgement how much to do in any case. They
represent shareholders, so they do have fiduciary duty there to be sure
(though I am unsure if that is true for the high profile members of the
Theranos board as it seemed to be largely advisory).

The fact that Holmes has 50+% of the company makes the point in this case
pretty much moot. Aside from leaving the board en masse and abandoning
whatever shares they have, they really are pretty powerless.

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minimaxir
There was a good quote after uBeam (wireless charging) was called out by
engineers for their physics being highly dubious:
[http://techcrunch.com/2015/11/07/wireless-power-
charger/](http://techcrunch.com/2015/11/07/wireless-power-charger/)

> “People are saying that investing [$23.4 million] into uBeam is everything
> wrong with Silicon Valley” uBeam co-founder and CEO Meredith Perry tells me,
> referencing her startup’s big name investors. They include Andreessen
> Horowitz, Founders Fund, UpFront Ventures, Marissa Mayer, and Mark Cuban.
> “But everything else out there is apps and social photo sharing stuff” Perry
> contends. “We’re building something real. We’re building something that’s
> insanely difficult. So difficult people think that we’re frauds.”

It's surprising that startups get _less_ scrutiny for hitting hard problems.
You'd think it would be the opposite.

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koolba
If you're a Walgreen's investor, blame their management for not doing the
proper due diligence.

If you're a Theranos investor, blame yourself for not doing the proper due
diligence.

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braythwayt

      > If you're a Theranos investor, blame yourself for not doing the proper due diligence.
    

Remember that blame is not a zero-sum game. You can accept your responsibility
for making a bad investment, while simultaneously identifying the party or
parties who set out to create an environment where unsafe medical practices
and misleading PR would lead to bad outcomes for patients and investors.

~~~
wpietri
This is perhaps too far afield, but I think blame really is a zero-sum game,
in that people work actively to shift it around, and only stop playing when
allocations become set. It strikes me as a very primate thing.

I think we can only get people into non-zero-sum behavior when we talk about
things like, cause, power, and responsibility.

For example, I'd accept no blame here. But I do feel responsibility in a
couple ways. As a participant in the Silicon Valley ecosystem, this event will
effect me. Even if I didn't make the mess, I'm going to have to help clean it
up. And looking back, I think about the power I might have had to cause a
different outcome. What if I had spoken up more against the hype cycle? What
if I had said more clearly that this was a bubble? I'm only one person, but
there were a lot of people who could have spoken up more. If we had done it
together, could we have reduced the damage of the bubble? Hard to say, but
next time I'll try harder and see what happens.

If this sort of thing interests you, you might enjoy Dekker's "Field Guide to
Understanding Human Error," which is a brilliant book about airplane safety
investigations. I thought it had a lot of applicability in tech.

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atonse
I think the media holds a big part of the blame here. I have never seen a
company hyped as much as Theranos. And I fell for it.

Now the same outlets that propped it up with astronomical levels of hype, are
taking much glee in writing article after article about how fraudulent
Theranos was.

Is anyone taking these media outlets to task for never actually verifying if
the crap they were writing was actually accurate?

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throwanem
_Quis custodiet_ , et cetera.

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Amir6
So basically (assuming they can not prove to be viable), this means you can
cheat your way up to billions of dollars in valuation and there will be many
investors who are betting money on things they do not have a clue about,
politicians who will be on your board without doubting their knowledge of the
matter or your claims and somehow a big corp like Walgreen's follows the hype.
Its more like people lean towards trusting others who put their trust again in
others and this domino leads to catastrophe.

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deadowl
Sounds like it could just as well be a case of a bunch of people overvalued
perceived business sensibility and ignored technical sensibility, which is
incredibly common.

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Spooky23
The media deserves some shame. The unabashed and unrelating stream of PR
driven horseshit around Theranos was unbelievable.

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chrisgd
Says the guy who has written books about venture capital as awe inspiring
geniuses who never do wrong and is currently writing a book about Stanford
(let me guess, it will be positive). Now Stanford and VCs want to distance
themselves from Theranos so they call in this guy.

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dang
Your first sentence is on the borderline of snarky dismissal ("says the guy").
But your second sentence seems just made up:

> _Now Stanford and VCs want to distance themselves from Theranos so they call
> in this guy._

Let's have substantive critique, please‚ not imagining what you think might
have happened.

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chrisgd
I think it was clear to most people that this was my opinion.

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puppetmaster3
Investors don't do DD.

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auggierose
Whatever, the hype around this is unbelievable. Theranos might even still have
a viable business. Let's revisit these comments here in 5 years again.

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josh_carterPDX
The NY Times completely misses the point about all of this. What a shitty
example of journalism. SV isn't to blame in any of this, we get it. But that's
not the point. Theranos is failing because of the lack of due diligence needed
in an industry so heavily regulated. The oversight needed for something as
sensitive as blood tests is something I don't think anyone involved with
Theranos took very seriously including the CEO. Now they're doing damage
control that will ultimately derail their progress and possibly close the
company. All of this could have been avoided by putting in place a team
experienced, not only in the industry, but had close ties to some of these
regulatory organizations to ensure nothing like this could have happened. I
think the idea is a great one, but unless you put in place someone well
intrenched in the medical industry you put yourself in a position to find
these surprises. Sucks. I was pulling for them. I also think the media is
making this bigger than it needs to be which is contributing to the
accelerated downfall.

