We’d all still live in caves, but with really, really fancy curtains.
Founded by the charismatic Stanford dropout in 2003, its promises to revolutionize blood-testing—and by extension, the vast industry of medical diagnostics—would be swallowed whole by most of the technology press, which would lavish Holmes with glowing coverage. (WIRED was not exempt). Only later—in October 2015—would the truth come out: Theranos was a fraud built on secrecy, deliberate fabrication, and hype. After I revealed that fraud, the company would begin an implosion that continues to this day.
h/t Steve from Rockwood
Last week, the AAAS’s Science Magazine podcast had a review about a book on the subject:
http://traffic.libsyn.com/sciencemag/SciencePodcast_180518.mp3
It starts after 16:30.
https://uploads.disquscdn.com/images/d33c75e5c0001871f28117c4a61b7f7a1e97ca4093a2c9b5ac719e59f5552595.gif
Miss Holmes should have called on a real blood sucking politician that could have helped her make the fraud last 10 more years. She will believe anything, and makes people pay for it before they read it, because she is batshit crazy.
When I used to work for HP, they bought a company for billions that was going to do stuff that was literally incredible. I couldn’t understand how it was even possible since I couldn’t even imagine a logical path through the hand-waving. A year later, it’s a massive write-off. People want to believe stuff.
I have long known that the need to believe is fundamental to human nature. Rational people believe in God; if you take God away, then people choose _______ to believe in.
Could be aliens.
Electric cars.
Self driving cars.
Xenu.
Climate change.
But it is always something.
Belief in nothing is not possible.
“When people stop believing in God, they don’t believe in nothing, they believe in everything.” G.K. Chesterton.
Not that I believe him, you understand. 😉
“Only a swindler can be swindled”. The people who want to “believe stuff” (beautiful line!) … have larceny in their hearts. Money for nothing … and their chicks for free.
‘the charismatic Stanford dropout’
charisma is the key. how many tyrants, American Greed episodes, ponzi schemes, investment frauds, stock frauds, political ‘games’ include some measure of ‘charisma’ to succeed?
all of them. in other words, image image image image image image.
Yup. I worked in “high tech” for several years and I found that the easiest way to be successful in that business was to be a complete crap artist.
In most of the outfits I worked for, there was at least one such individual who could convince nearly everyone that black was white and that person was held out to be a latter-day wunderkind by the management. Even if that person was wrong, he or she was regarded as being correct, despite any evidence to the contrary. Ultimately, those companies ran into trouble and I would be among the first ones to be chucked over the side. The wunderkind, however, kept his or her job and, often, received a generous raise because they were so “valuable” (as in telling the managers what they wanted to hear).
Even after those firms crashed, burned, and left smoking holes in the ground, the wunderkinder would, miraculously, get up again, shake off the dust, and find another employer where they could continue their crap artistry.
On the other hand, it’s been said that the easiest place to make money in that business was on the floor of a stock exchange. Buy on the fact, sell on the rumour.
See my post below. One would think that people with THAT MUCH $$$$ to invest would have already learned the lessons of our wild Wild Western FREE Market economy … “caveat emptor”.
Instead … the axiom … “only a swindler can be swindled” rules the marketplace. Everyone is looking to “get Rich quick” … via Wall Street … with no effort on their part. Hence … Wall Street is a target rich environment for swindlers and fraudsters. The only ones getting rich quick … are the fraudsters and hucksters.
I have a brother in law (the wife’s actual brother in law) … who was charged and convicted by the SEC for FRAUD. This man “developed” multiple medical devices (he had an optomology degree … but never really practiced as a Doctor … too much hard work). So with the tutelage of a mentor-partner he STOLE about $5 million from SUCKER investors in their FRAUDULENT companies and products (this, back in the 1990’s) … before the investors got wise and contacted the SEC. His medical degree lent “credibility” to the FRAUDulent companies … but their products were all FAKE. They promised BIG $$$$ payouts for these “early” investors. This, in the era of everyone being promised a multimillionaire future as they invested in the “next Apple, Yahoo, Microsoft, et.al. As they say “only a swindler can be swindled”
Well his products were all FAKE. The attendant “companies” … FAKE. But by the time the SEC caught up with them to … cease and desist his operations … he’d already pocketed, spent, and hid ALL $5 million of investor money.
So when I learned of this MONUMENTAL medical device FRAUD … I was shocked by the scale of it all. I bet my brother in law is looking at this MASSIVE $$$ FRAUD … and is looking for a cute young WOMAN … to front his next medical device FRAUD. A photogenic woman who adopts Elon Musk’s personality traits … of BOLD predictions! and PROMISES of a rainbow and unicorn FUTURE for all of humanity!!! All they need to create a WONDERFUL … HAPPY … HEALTHY FUTURE … is your $$$$$€€€€€££££££¥¥¥¥¥¥
One of the great cons in history, from the point of view of time, (15 years) and money (hundreds of millions).
This story isn’t really about women. It’s about how the corporate, political, and media elites in America really, really, really wanted to believe that there was a girl version of Steve Jobs out there. Elizabeth Holmes sure knew how to play the part, ted talking and social justice tweeting and sporting an austere black turtleneck like a uniform.
Here’s Liz at a Ted Talk, which wasn’t about her alleged invention at all, but rather played to the audience’s utopian aspirations regarding top-down managed healthcare.
https://www.youtube.com/watch?time_continue=1&v=9B_oJMQk754
A partial list of the bilked.
http://fortune.com/2018/05/04/theranos-investment-lost/
A get a load of this list:
“Three years later nearly all the other outside directors on Theranos’s board are people who were introduced to the company through Shultz, now 93. They are former Secretary of Defense Bill Perry, former Secretary of State and National Security Adviser Henry Kissinger, former U.S. Senators Sam Nunn and Bill Frist (a heart-transplant surgeon), retired U.S. Navy Adm. Gary Roughead, retired U.S. Marine Corp Gen. James Mattis, former Wells Fargo CEO and chairman Dick Kovacevich, and former Bechtel Group CEO Riley Bechtel.”
http://fortune.com/2014/06/12/theranos-board-directors/
Bre-X was a simpler more ancient con. But this one leveraged on one of the collective illusions of those who presume to rule.
You could file this under “The World Is Run By Crazy People”, come to think of it.
Utopian aspirations … indeed … “only a swindler can be swindled”. People want to believe stuff … they want to believe they can “have it all” … with minimal effort, of course. The visions of a “utopian future” … are always filled with images of leisure. Of everyone spending hours doing downward dog poses and tai chi on green lawns surrounded by songbirds and dancing polar bears. Who wouldn’t want to $Buy-into$ such a future.
As a Christian … I have been taught to be a skeptical thinker …
Proverbs 26:24-25
24 Enemies disguise themselves with their lips,
but in their hearts they harbor deceit.
25 Though their speech is charming, do not believe them,
for seven abominations fill their hearts
Being a skeptic has kept my family safe.
An even shadier outfit than Bre-X had to be JDS Uniphase. Despite having an impressive market capitalization, it lost at one point, as I recall, around $90 billion. Still, a lot of people managed to make money.
I never invested in the company, having learned my lesson through losing a lot of money when I bought a number of penny stocks a few years earlier. JDS’s situation was all over the financial news and there was speculation about when it would implode.
Someone I knew while I was finishing my Ph. D. went to work for them. I spoke to her about a year later when she came back to defend her thesis and I happened to mention JDS’s huge debt and losses. The only comment she had was that she figured out that there was a bubble of some sort. It wasn’t entirely surprising when I learned that she had jumped ship and took an tenure-track position at a university elsewhere in the country.
JDS is still around, though, but in a different form, having re-made itself several times. That’s one way many of these bunko operations manage to stay one step ahead of the law. They can declare bankruptcy and re-establish themselves as new companies or in different jurisdictions. They can merge, amalgamate, or be bought by a different firm. Any debts or legal obligations then become a matter for the corporate lawyers to hash out.
They are little more than shell games. They may be portrayed as great investments, but, by the time I hear about them, the easy money’s already been made.
In a recent edition of The Intelligent Investor by Benjamin Graham, one of the contributors posed the following question as a way of determining whether a certain stock is worth buying: which company will be more likely to make money–one whose business it is to collect garbage, or one which promises a cure for cancer within the next 5 years?
And speaking of blood:
Blood Simple:
https://www.youtube.com/watch?v=vI0ov8zzfQA
There will always be fraudulent people…
I wonder whether this was an inside job at Walgreens.
I wonder what happened to the 100 million dollar innovation fee.
I wonder what happened to the 40 million dollar loan.
I wonder whether there was a big cash splurge going on everywhere.
I wonder why management was so oppressive to staff.
I wonder why the staff played the games that went on.
I wonder where the half million dollar fine came from.
I wonder whether anyone will be going to prison.
I wonder whether I’ll have to purchase the book to find the answers.
I’d like to try your 9 questions.
I wonder whether this was an inside job at Walgreens. No. Normally sane people often want to believe in magic.
I wonder what happened to the 100 million dollar innovation fee. Used up to run the business.
I wonder what happened to the 40 million dollar loan. See above.
I wonder whether there was a big cash splurge going on everywhere. 100 million don’t buy what it once did.
I wonder why management was so oppressive to staff. See Jim Jones cult.
I wonder why the staff played the games that went on. See Jim Jones cult.
I wonder where the half million dollar fine came from. If it was paid it likely came from the 100 mil.
I wonder whether anyone will be going to prison. Yes. American law takes a dim view of ‘breach of trust’.
I wonder whether I’ll have to purchase the book to find the answers. Yes.
8/9 …not bad…I say yes to Question # 1 though …as for the rest I agree with you 100%. These are the questions that bugged me. This was like watching 60 Minutes!
Want another beer, dear? Ah ha ha!
https://americanaffairsjournal.org/2017/11/western-elite-chinese-perspective/
Stanford was for me a distant second to Costco in terms of the American capitalist experience. Overall, I enjoyed the curriculum at the GSB. [Stanford’s Graduate School of Business] Inevitably I found some classes less interesting, but the professors all seemed to be quite understanding, even when they saw me reading my kindle during class.
One class was about strategy. It focused on how corporate mottos and logos could inspire employees. Many of the students had worked for nonprofits or health care or tech companies, all of which had mottos about changing the world, saving lives, saving the planet, etc. The professor seemed to like these mottos. I told him that at Goldman our motto was “be long-term greedy.” The professor couldn’t understand this motto or why it was inspiring. I explained to him that everyone else in the market was short-term greedy and, as a result, we took all their money. Since traders like money, this was inspiring. He asked if perhaps there was another motto or logo that my other classmates might connect with. I told him about the black swan I kept on my desk as a reminder that low probability events happen with high frequency. He didn’t like that motto either and decided to call on another student, who had worked at Pfizer. Their motto was “all people deserve to live healthy lives.” The professor thought this was much better. I didn’t understand how it would motivate employees, but this was exactly why I had come to Stanford: to learn the key lessons of interpersonal communication and leadership.