I feel like the Theranos fiasco has been discussed on HN ad nauseam, so I'll comment on an interesting quote by Holmes:
> “The minute you have a back-up plan, you've admitted you’re not going to succeed.”
I've seen this as a common refrain in SV. In my experience, though, what actually happens if you insist on no backup plan, and you've been fortunate enough to have smart people around you, is they secretly make backup plans. Then, when things inevitably don't go exactly according to plan, they step up ready to keep moving without missing a beat.
What this means as a founder is that the plan you end up implementing had nothing to do with you. It doesn't stop them from taking all the credit, though. If you are unlucky in terms of your top team then well, you just die.
Flipping it around, the smartest (and usually most successful) founders' plan is that things will not go according to plan, and to a) hire smart people who can handle that and plan for it, and b) maintain maximum flexibility as long as you can (e.g., don't sign a massive corporate giant as your first customer).
Maybe if Holmes had some experienced, skin-in-the-game investors on the board she would know this?
Sounds as though Holmes really did put all her eggs in one basket: government relations. Score government contracts; use regulatory capture to create moats against competition; profit.
If that was indeed her calculus, then in retrospect, the Walgreens partnership was strategically off target -- at least for Phase 1 of the company's plans. So was that part of Plan A, or was it someone's Plan B, or was it simply a biz dev opportunity that came their way and which they decided to pounce on? Interesting to consider.
This is probably a good strategy for founders too: make your backup plans, and then push them out of your head and insist that you're not going to need them. That way, they're there if events conspire against you and you really do need them, but you don't rely too much on them as a crutch.
The ability to entertain cognitive dissonance is something that comes with age, experience, and comfort with yourself, though. I know that when I was in college, "I'm 100% committed to this plan of action" meant that I really was unwilling to entertain any other options, and it took a lot of butting heads with reality to understand that I could be 100% committed to a course and still be able to see all the other paths that might get me there.
It would be a waste of time for most startups to make back-up plans in advance. Why expend time and effort on something you might not need? Instead of making back-up plans the better approach is to quickly recognize when your original plan has failed and then pivot.
It might also reflect over-confidence from a padded/privileged path: With a company that forges on for over a decade with questionable technology, $750M funding and a very politically powerful board, you might not feel the need to have a plan B.
> “The minute you have a back-up plan, you've admitted you’re not going to succeed.”
I've seen this as a common refrain in SV. In my experience, though, what actually happens if you insist on no backup plan, and you've been fortunate enough to have smart people around you, is they secretly make backup plans. Then, when things inevitably don't go exactly according to plan, they step up ready to keep moving without missing a beat.
What this means as a founder is that the plan you end up implementing had nothing to do with you. It doesn't stop them from taking all the credit, though. If you are unlucky in terms of your top team then well, you just die.
Flipping it around, the smartest (and usually most successful) founders' plan is that things will not go according to plan, and to a) hire smart people who can handle that and plan for it, and b) maintain maximum flexibility as long as you can (e.g., don't sign a massive corporate giant as your first customer).
Maybe if Holmes had some experienced, skin-in-the-game investors on the board she would know this?