It seems like a typical SV case of "fake it til you make it", except instead of risking a down website or burned investor, they risked harm and death of patients.
She clearly had some knowledge and strategy about the technology and likely fully intended for it to be successful, but responded to delays and difficulties with deception rather than just admitting it was harder than they expected.
"If we just get over this hurdle, we'll revolutionize medical testing and become legends." Not unlike Ponzi schemes which start out as legitimate investment ventures, do very poorly, and then just make up the return numbers. Martin Shkreli arguably pulled that fraud off "successfully" and actually got over the hurdle, but of course it came back to bite him.
They did start with legitimate attempts at implementing th technology needed to microfluidics (though apparently Holmes knew nothing about the field and didn't even know anything about existing players such as Abaxis, who actually had working machines).
However, they could not get the technology to work and abandoned several development paths in favour of a less ambitious approach that, among other things, involved doing blood analysis the old-fashioned way (manually in the lab), and only pretending to be using new tech they'd invented. They knew it didn't work, but kept selling it anyway, which is where it went from just faking it to outright fraud.
Most of their money was raised after they failed to develop their blood analysis technology, but to the investors, to the press and to their clients (such as Walgreens), they were still claiming to be using their proprietary technology [1].
>They knew it didn't work, but kept selling it anyway, which is where it went from just faking it to outright fraud.
I'm playing Devil's advocate and not justifying or defending their fraud and the physical harm they caused, but if we were to look at Holmes' intentions, I'm suspecting it was something like "we just need to do this for a few months/years until our technology works", rather than "let's just run this scam forever and get rich". As for how close they actually were to developing that technology (and assuming most of their talent didn't leave) or if it was even possible for them, who knows. And of course, regardless, they still intended to commit fraud and should pay the price.
It's easy to fall prey for psychopaths trying to second guess their intentions. "This can't be staged, that would be an unnecessary risk. Had they wanted to get rich quick they would have lied about this other thing instead". True intentions are illogical to other people, because they are the result of a limited, narcissistic and self centered world view.
(Not making any real life connections here, I am absolutely not qualified to call anyone medical terms, but in the subthead about clinical psychopathy it seemed important to point out.)
You're right. I can't make assumptions about her true intentions. But I don't think you or anyone else can either. It'll be interesting to see if anything new regarding that comes to light at trial. Maybe she's a pure sociopath, maybe she's a college dropout who was in way over her head and dug the company into a hole it couldn't escape, maybe neither, maybe both.
Also known as "Fake it while awaiting unknown outcome." It's not like faking it guarantees making it. And since "unknown outcome" is kind of the default always, the most concise statement of this approach is really just "Fake it." Which is the problem. "Fake it" is so bad, that even if you later "make it" (like Shkreli for example), you still don't get forgiven.
Fake it until you make it is just a nice way of saying fraud. People that do that are being deceitful and should be publicly shamed and face criminal prosecution in some cases. They are scam artists, not honest entrepreneurs.
Reddit is an interesting case, but I'd say there's a categorical difference between faking that you are able to do something you can't (Theranos) and pre-filling a functioning site with content (I assume that's what you are referring to?).
It's especially relevant if the difference actually matters for whom you are tricking: If the results had been accurate (which from what I understand they weren't) and absent any other specific claims of superiority Theranos end-users wouldn't care about what tech they use, but for investors relying on claims that they can do something others can't to establish their value it obviously does matter.
Which in the case of reddit I guess makes the question: does it make a material difference for users if the site they enjoy is entirely fed by an organic community, or is the most important thing that the site is enjoyable regardless of origin? I guess you could argue that faking a community is also "faking that you are able to do something you can't".
I would absolutely say that to them. It's doubtful they actually committed a crime but it shows a lack of character and constituition to say the least and potentially fraud to their investors. Fake it until you make it makes you a scam artist, con man, flim flan man etc... People that embrace that philosophy are frauds and cheats that should not be trusted.
Seeding a community where pseudo-anonymous users submit image/link content with images and links might be fraud by some semantic and technical definition (certainly not a legal one), but 1) it's pretty much necessary to get something like that off the ground, 2) no one is really being deceived or misled in a significant way. I'd say it's pretty harmless.
My understanding is reddit did this at the very start of the site's existence and stopped pretty early. They probably would've died quickly if they didn't seed some content.
I do, and the "fake it until you make it" doesn't fly very well in Europe; its generally frowned upon. Which also explains why there isn't much of a "startup culture" in Europe.
She clearly had some knowledge and strategy about the technology and likely fully intended for it to be successful, but responded to delays and difficulties with deception rather than just admitting it was harder than they expected.
"If we just get over this hurdle, we'll revolutionize medical testing and become legends." Not unlike Ponzi schemes which start out as legitimate investment ventures, do very poorly, and then just make up the return numbers. Martin Shkreli arguably pulled that fraud off "successfully" and actually got over the hurdle, but of course it came back to bite him.