For some companies the core value is the tech they produce, and thus having non-tech people at the helm makes little sense.
Others, usually also dubbed "tech startups" due to their Silicon Valley location, use generic pieces of technology to achieve their purpose. There are entire sectors (ad tech, Uber for X), where basic building blocks have been built and now it's sell, sell, sell.
Indeed http://en.wikipedia.org/wiki/List_of_Wharton_School_alumni with all due respect it's a bit tiring to hear about all those 'uselss MBA' stereotypes. There's a substance to it but I start to feel that 9 out of 10 comments like this one reflect the insecurity of the author rather than anything else.
One of the people not mentioned on the list is founder of Warby Parker - surely he contributed to the bubble by building the 2nd most profitable retail stores and one of the few startups that are actually profitable.
With all due respect, if you're a MBA, you've just followed such stereotype.
So what I didn't even graduate college? I'm proud to have built a company whose employees are happy and treated with dignity. Diligence, respect and passion drove people like me to success, not a HBS MBA.
From experience, that's not what usually happens with MBAs. Because of an 'alumni list' or a privileged network, many feel entitled to success and will do anything to reach their goals(often unethically).
And plenty of devs go and work for such companies and individuals…
One would think we'd come up with better ways by now to lessen the allocation of resources for things in the present that are of marginal utility for most people, but somehow, humans have a knack of creating/engaging red queens races relative to other things that are theoretically possible and feasible.
Most start ups (and large co's) are offering devs to work on pretty much the same thing, which in my opinion is very easy to turn down and actively avoid… 1.5x, 2x (at best for most) to ship marginally interesting projects that will probably provide not much more than marginal utility for most people while being around people who will pretend (or believe) otherwise… yeah…
Most of these people (not all of whom are MBAs) just want to be bosses, not entrepreneurs. Their goal is to be executives ("big picture guys") shouting orders, not worker bees, but they don't have the social resources to make it happen in an existing company so they drum up some seed funding and hire some engineers (usually, scraping the bottom) and try to kick something together. It doesn't work very often.
"I want to be an executive" is a pretty fucking lame vision, as it were. I'd rather be around people who have concrete ideas of what they want to build, and who'll lead when appropriate and follow when appropriate. People who say, "I'm a leader" but don't have a good sense of where they want to lead, are annoying. What they're really saying is, "I think that, based on some linear combination of pre-existing socioeconomic resources and inflated self-image, I have the right to a job where I tell other people what to do."
I don't think that all MBAs are douchebags. I know plenty whom I like a lot. Unfortunately, the culture of business school and especially the elite business schools is one of entitlement and position-seeking. When that type of person founds a startup, you get a lot of the same toxic big-company behaviors and formalities and political structures, but in a small company that can't afford the inefficiencies. Now you have the worst of both worlds between small companies and big ones, and a high likelihood of failure or, if the connections are there, Knewton-esque mediocrity.
Oddly enough, if I had a child I'd recommend that he go to the highest-ranking business school out there. Harvard is going to open doors that are just ridiculous, whereas the #20 school is probably educationally equivalent, but isn't going to make you a CEO at 30. On the other hand, if I were hiring, I'd be extremely skeptical of the Harvard MBA and less skeptical of the Booth MBA and even less skeptical of the UWash MBA. In most educational divisions, the correlation between prestige and douchebaggery is nonexistent, i.e. Yale law students aren't noticeably douchier, or less douchey, than students at middling schools; in MBA school, it's clearly a positive correlation (although Stanford is probably worse than Harvard, though less prestigious, for obvious reasons).
"linear combination of pre-existing socioeconomic resources and inflated self-image"
What do you mean here by linear combination? If you wrote the same thing and said nonlinear combination would we have come away with a different interpretation? Is this just injecting random math terms to raise the status and credibility of the speaker?
It's a problem I see in a certain non-MBA culture (and am guilty of myself all the time too).
Or maybe I'm just missing something about what you meant.
> "linear combination of pre-existing socioeconomic resources and inflated self-image"
> What do you mean here by linear combination?
I suspect that Michael means that the people who claim on leadership position without having proved themselves will justify their self entitlement x % by their pre-existing social resources and (1-x) % by what they think of themselves.
Yes, you don't have to hold an MBA to think like that, but a diploma from a prestigious institution sure helps boost your ego, and being born from wealthy parents helps as well.
You're reading too much into it. I could have taken out the word "linear" and it would have been fine, but it wasn't exactly a random math term.
A linear model is the simplest model, which is sometimes an asset (in some cases, linear regression is the best statistical model for its simplicity) and sometimes makes it crude and underfit to the problem. I was focusing on the latter.
> Most of these people (not all of whom are MBAs) just want to be bosses, not entrepreneurs. Their goal is to be executives ("big picture guys") shouting orders, not worker bees, but they don't have the social resources to make it happen in an existing company so they drum up some seed funding and hire some engineers (usually, scraping the bottom) and try to kick something together.
That seems like a very mean way to say they don't want to be a cog in a machine.
> "I want to be an executive" is a pretty fucking lame vision, as it were.
By "I want to be an executive" do you mean "I'd rather not work for a boss"? Is there a difference in those two desires? How is that fucking [sic] lame?
> What they're really saying is, "I think that, based on some linear combination of pre-existing socioeconomic resources and inflated self-image, I have the right to a job where I tell other people what to do."
Actually, "I have the right" is your words, not theirs.
> I don't think that all MBAs are douchebags.
Whoa, whoa. Nobody said they were douchebags.
> I know plenty whom I like a lot.
And I have a lot of gay friends (but I wouldn't say I like them "a lot").
> Unfortunately, the culture of business school and especially the elite business schools is one of entitlement and position-seeking.
What is a culture of entitlement? People just go to business school and... sit there and be entitled? What is a culture of position-seeking? Do they seek positions in companies? Does engineering school also have a culture of position-seeking, or is that different somehow?
> When that type of person founds a startup, you get a lot of the same toxic big-company behaviors and formalities and political structures, but in a small company that can't afford the inefficiencies.
So some MBA's aren't that good. I think we all already know that some startup founders suck. But others must be good, or turn out to run successful companies, or investors would just unilaterally cease funding any MBA's. The phenomenom of bad founders is not limited in any special way to people that got MBA's, either. So in what way is the problem with business schools, or the people that go to them? (Aside from the usual complaint you hear from a lot of people, that you're repeating, about MBA's that don't really know what they're doing because they don't have experience, which we get when people make stereotypical complaints about management consultants too.)
> In most educational divisions, the correlation between prestige and douchebaggery is nonexistent, i.e. Yale law students aren't noticeably douchier, or less douchey, than students at middling schools; in MBA school, it's clearly a positive correlation (although Stanford is probably worse than Harvard, though less prestigious, for obvious reasons).
It would be helpful if you could point us to an academic study that makes these measurements of douchiness. I don't hang out with enough law school graduates and business school graduates from these respective schools to be able to tell if what you are saying is true, but I guess you hang out with enough of them from each major business school and law school to have figured this all out.
It starts even earlier than business school, with the kids who campaign to be president of ten different school clubs just for the sake of being in a leadership position and being able to put it on their resumes. American culture really encourages this shallow sort of leadership by entitlement, while truly great leaders almost always earn their authority through a medium to long period of hard work side by side with other people, not necessarily as a follower, but at least as an equal.
Becoming president of school clubs isn't entitlement. What I mean is that the culture around leadership positions in high school incubates the attitudes that Michael was complaining about. Some students do legitimately learn a lot being the president of a high school club and are able to do good stuff with it. Many students, though, just run for the resume item, to help themselves rather than really to serve the organization and help it do interesting things. And because of the way our culture treats leadership, as if it were something that can exist without context, that becomes part of their identity. They've been the "leaders" of organizations all their life (which in some cases involves little more than organizing social events), they've gone to these fancy schools, and now, as a result, they ought to be in charge later in life, because that's who they are and because Harvard doesn't train followers, it trains leaders. But just because someone is the president of a social club or an a capella group in college (not to say that this is not a worthwhile thing to do), it doesn't give them any more right or qualification to be the leader of a law firm, or an engineering firm, or an advocacy group, or a theatre troupe. Leadership isn't a single skill or quality; it exists entirely within a context.
I don't have any problem with club presidents in general. I do have a problem with some of the ideas U.S. culture (or at least middle class upward-aspiring culture) has about leadership, and I think those attitudes do lead to a destructive form of entitlement.
I don't think you're going to get an accurate view of people at Harvard, even people that were involved in student government or were club presidents, if you generalize them like that. If I were to generalize, I'd think that most people that were high school club presidents and leadership camp-goers were really cynical about it, not entitled. (That's just based on the people that went to my high school.)
I also don't think the cause-and-effect story is really there. The one startup founder that I know personally that I've heard be called a douchebag is somebody that started the company early on in high school, that bootstrapped it up with his brother from money made by selling bootleg CD's at soccer practice, and never went to college. And the other >bad person< I know that started a startup isn't your generic entitled club president type -- he is, far more specifically, your basic clinical psychopath.
Also, to the degree that these people do exist, or to which this attitude has been inculcated into a group of people, the sink-or-swim situation of running a startup seems like a great place for them.
I'm an experienced team lead, interim CTO, and full-stack developer. Currently bootstrapping co-founder at http://klets.co, but I do occasionally have time to help people get their team produce better software faster. Do get in touch!
I specialize in cutting away the nonsense and getting a team highly productive in startup-like environments. I accomplish this with a lightweight, non-religious, and highly reflective agile process, together with a pragmatic focus on internal software quality. This focus ensures that the team is productive today and the coming months and years.
I'm a passionate programmer and I use my engineering experience to coach team members in modern development practices, coding styles and architecture concepts. My goal is to make your team work so well that soon my help is not needed anymore.
What? Python isn't the kind of thing you would use as an everyday interactive system shell; it's a scripting language that can incidentally be used interactively but isn't well-suited for that, especially without extras like ipython. And quite aside from that, every unix-like desktop OS comes with Python pre-installed; Windows doesn't.
So it's not unique to Windows and other things have been doing this for much longer on different platforms with more users and now have much larger ecosystems making it easier to do what you want quickly.
Yes, clearly that is exactly what I'm saying. Intelligent CEO == scam.
It takes more than intelligence to start a Biotech company. You need money, equipment, skill, and usually experience.
Medical breakthroughs usually require years of research and skills that are acquired working on a PhD. I'm not saying it's not possible for a 19 year old to make a world changing discovery, but when no one will say what exactly that world changing discovery is, I get a bit skeptical.
Actually, there does not need to be a 'discovery' here, merely fantastic execution on existing technology. It's a bit like combining a bunch of stuff that already exists in a novel way and then playing that for all it is worth. This does nothing to belittle the accomplishment here, it's fairly amazing if what they've done is as accurate as they claim it is but from what I've been reading over the years all the pieces were already there, it's just that nobody bothered to combine them like this and the execute the hell out of it.
Classic disruptive startup, very impressive if you dig down a bit further.
Yes, but why do they have so much money? So a 19 year old walks up to an investor and says:
"Give me $16 million. I've got an idea for a new way to do blood tests. It doesn't work yet, and I've got less than a year's experience in the field. But I'm wicked smart because I learned Mandarin as a child, and my professor believes in me. Oh and by the way I'm going to maintain control of my company and never want to give up more than 50%"
That surely didn't happen. She must have something that at least looks very impressive to have negotiated those terms, but what I don't understand is why no one is talking about what that is. They have patents to protect them. Why aren't they releasing peer reviewed studies?
Money attracts money. This is perhaps the long-tail of the investment insanity which happened over the past decade and culminated in the GFC for the finance sector. It somewhat stands to reason that the fiscal fervor of the times has perhaps just fallen into an area where the payoff period is typically longer.
There's a very good reason to be skeptical when the most anyone can say about the company is the composition of it's board - noteworthy, but I wonder how often that was used to pitch to each of its members.
It's worth rereading the story of Enron when parsing things like this - there's a lot of parallels.
Given what has occurred elsewhere in the economy in recent years, the fact that people have thrown lots of money at a compelling story means nothing without being able to look inside the box to see what is going on, Bernie Maddox managed to get a lot more money raised than these folk.
Presumably someone did, but it would not at all be unheard of for due diligence to not be particularly diligent at all and for later investors to then trust to the diligence of the earlier ones, as after all, being thoroughly diligent is exceedingly expensive and why double up when someone else has already checked...
I would agree that you usually do not raise that kind of money without reasonable DD, but there are more than enough counter examples out there of people bullshitting investors out of very large sums, both deliberately and through deluding themselves.
That does happen but less frequently than you probably think. In this case there was a company with a track record and a bunch of tech which could be audited, that's a relatively straightforward affair. It gets a lot harder in early stage 'virtual' (as in: no physical product) companies.
Good find! I'm curious what their long term plan is, if they're going to stay private or IPO at some point. If they IPO you can expect a lot of information to become more widely available than it is today.
The company is 12 years old. The initial investments and staffing were likely modest and provisional.
But going back to investors year after year, always having delivered what you predicted at each step, and proving that you've accumulated proprietary technical advantages, will get you to a giant company.
When you say, "no record", it seems you haven't read (among other things) the New Yorker profile linked above.
Per that account, by the time Theranos raised its first $6 million in late 2004, Holmes had been working on it for over a year, had at least one patent in process, and had convinced her chemical engineering professor, a dean of the Stanford engineering school, to be an advisor and board member. (He's since joined Theranos full-time.)
So it's not, "kid with nothing but idea and moxie handed money" – but rather "star researcher impresses and recruits a bunch of domain-experts, which then attracts investments".
I have read that, and to me that is "no record". By record, I mean a demonstrated ability to actually turn an idea into a product.
When she got that first $6 million, and another $10 shortly after, she had no product, no experience, and it wasn't even clear if the technology to do what she proposed was feasible.
I've read her first patent, it's super broad and covers a huge number of possible implementations. There was no way for her to know at the time if any of it was really feasible. And none of it was feasible at the time--it just wasn't ready yet as evidenced by the fact that it took 10 years before anyone heard anything about it.
It took 11 more years of research to get to anything remotely commercially viable. She basically convinced people to pay her to do 11 years of pure R&D. Name me one other founder who has been able to do this with no academic credentials, and no record of success--much less a founder who was 20 at the time.
>"star researcher impresses and recruits a bunch of domain-experts, which then attracts investments"
She wasn't a star researcher at the time. She had almost no formal training, no publications, and a year of experience as an undergraduate.
Then, it's probably a good thing those scientists and investors back in 2004 trusted their own expert judgements about what a suitably promising "record" would be, after actually meeting her and reviewing her proprietary research.
Had they waited for the decade-later opinion of a layperson web-developer who's skimmed the first patent abstract, they might have missed out.
It's a good thing that another layperson web-developer is on hand to let them know that their investment, which still hasn't made a profit after 11 years, and has no credible evidence that it ever will, was a wise decision.
What the company does now has almost nothing to do with her original patent applications, so it looks like her original proprietary research didn't amount to much.
They paid a smart person millions of dollars to essentially build a research lab. And after 11 years of research, they now have a way to maybe do some blood tests with a finger prick instead of a blood draw. But there are still questions remaining about the accuracy of these very small sample sizes. Some of the doctors and lab techs opinions I've read, say that even if the technology is flawless small finger drawn samples are much more prone to contamination. The article mentioned on HN even mentions that their tests would be more sensitive to inaccuracies caused by poor operator technique.
How many PhDs out there could have done something similar with 11 years and $400 million.
Impressive that a founding student (not the professor who sponsored the research) has retained 50% equity at a $9B valuation. The history of those negotiations will hopefully become a Harvard or Stanford Business School case study.
Her family connections might had something to do with it. Its easy to screw poor kid, but Oil executive family that regularly has Secretary of State, a former Secretary of Defense, and a former Senator dinner guests? Better think twice.
The reason I founded a startup is the same reason Jack Sparrow is a pirate. The freedom to choose what to do and how. And when.
For example, right now I'm in the middle of a 3 week paternity leave because of my second son's arrival. Here at HN there's this vibe that if you run a startup, you're not supposed to sleep or take vacation. But really, why be your own boss if you don't use the freedom that comes with the package?