This is an interesting editorial from Financial Times. It is good to embrace failure as part of the experimentation process, but there are a spate of start-ups ranging from fintech to “web-3” and anything that has crypto or blockchain in it. The road to monetisation is zilch and excess capital is only aggravating the “frenzy” around deal making. FT editorial (linked below) requires us to pause and think about this process.
While Holmes awaits sentencing and her business partner waits for his own trial, venture capital money continues to flow into wild start-up ideas. No broader reckoning has been linked to her story. In the weeks since her January conviction, I have had more conversations about the trial with people in London than San Francisco. This is despite the fact that Holmes lives nearby and remains one of the most high-profile female founders the US tech sector has ever produced.
This is more instructive here (being implied):
Instead of seeing the case as a spur to toughen up due diligence, the tech sector is choosing to dismiss it as an outlier. Just as imploded co-working company WeWork was described by west coast tech workers as a New York company, Theranos’s non-tech investors tend to be invoked when talking about its failure. The implication is that real tech investors would have been able to spot the lies. The truth is more complicated. Silicon Valley was involved, albeit at an early stage. Although late investors included Walgreens and Rupert Murdoch, one of Theranos’s earliest backers was notable VC firm Draper Fisher Jurvetson. (And, of course, Holmes went to Stanford.)
I was only mildly interested in their claims and needed to see a full scale implementation of their product. I find it odd though that most startups refuse to engage with external ideas around course correction. My worry is they shouldn’t extinguish any faith in themselves while dealing with the “legacy businesses”. Hospitals and healthcare enterprises will slowly become more wary of their claims if the present state of affairs continues. The pharma companies usually snap up any new biomedical company for their IP (or possibly some talent pool). It is rare for any new company to snake up its way through regulatory labyrinthine and become relevant.
Besides, ecosystems matter. A familiarity with the Ivy League systems too.