A lot of 'numbers' startups cite are basically fake I think. Like if someone says we have this many users as a statement to TechCrunch you have no idea what they are actually calculating
But there is a clear line that gets crossed if you start actually making a database of millions of synthetic users and that's what happened with 'Frank' that sold to JP Morgan and eventually the founder was prosecuted
Not just users, but number of companies. So many startups list out all the companies using their products, who also happen to be an army of startups. I doubt they're all using each others products, just doing what they can to juice each companies perceived metrics.
Supposedly B2B SaaS companies in YC have been known to enter into agreements to “buy” each others’ products so they can all book more users and revenue despite a single dollar not changing hands.
In the current environment I doubt Elizabeth Holmes would go to prison. She would be saying the machine would work by early next year. After all a drop of blood is just a smaller quantity. Making the machine work is just an engineering problem.
If she were really clever she would recruit a social media army of all the weird conspiracy theorists who think "medbeds" are real.
Of course now we know that a drop of capillary blood containing interstitial fluid and a random mix of venous and arterial blood is unsuitable for most blood tests. At least you will have googled that if you're an Elon stan preparing to tell me how they're not comparable.
Cool thought process, but the real reason Elizabeth Holmes would not go to prison if she pulled that shit today is much, much simpler: She would know to make a nice sized donation to the current administration (or a sweet business deal for one of his family members), and the justice system would simply be completely hands-off her. She'd give 5% equity to Jared Kushner or something, and go on committing fraud with confidence. It's not complex anymore. Pay to play.
The big difference was that she was in the medical field. She used her machines that worked unreliability on patients and caused actual damage to humans. Then she noticed that this could be a problem and switched to blood analyzer from Siemens. But she still continued to say that the machines do work. She lied to investors. I still feel her case is a lot different to what musk is doing. I think you can definitely say “coming next year” and actually needing 5 years. You cannot blatantly lie and harm people along the way
But what if you say that FSD is actually here and that the only reason you can't fully use it is regulations and then need an extra decade (at least -- still pending)? As one of many examples....
Are you a biochemist? Would the Theranos machine have worked with new tests using new reagents? Is the needed blood volume not similar to, for example, payload capacity? Are we discriminating against people who affect an unusual voice?
It wouldn't have worked, period. You can't use capillary blood for the kind of blood tests they were claiming to. It's statistically impossible because the sample isn't big enough and drawing more capillary blood doesn't improve the SNR. Two samples taken at the same time from different spots on the same finger can yield wildly different results.
Everyone in diagnostic medicine knows this (they've been dealing with this problem since the glucose finger prick test). That's why no biotech VC ever invested in Theranos and they had to get tech VCs and fancy board members like Henry Kissinger. A cursory glance at the proposal by someone qualified would have shut that down immediately, but tech VCs don't do due diligence anymore.
That's the point. As yet uninvented tests and reagents are the same kind of line of BS as "let's make the rocket bigger." While I have the advantage of having a mother who is an immunologist and did in fact work in developing diagnostics, all it really takes to call shenanigans is a knowledge of project management and critical path analysis. By the time you're launching 15 or 25 starship missions to refuel one on its way to the moon, the whole project is irrelevant.
It’s not a lack of due diligence, it’s a lack of prosecution of fraud. They think they can just unload to some sucker for a big payday. See also the entirety of cryptocurrency.
> They think they can just unload to some sucker for a big payday. See also the entirety of cryptocurrency.
That's also the entirety of the biotech VC industry, except even more so.
Biotech startups require far more capital to make it to market than tech startups, so biotech VCs take the role of early stage funding for R&D. Then the startup IPOs (with zero revenue and unlimited scientific risk) and uses that to fund its clinical trials, while the investors dump their stock. Then, because ramping up manufacturing and quality control takes even more money, the biotech startup sells out to a pharmaceutical company once its passed its trials or the results are promising enough to take the risk, closing the financing loop. Most of these startups stop existing before they even earn a single dollar in revenue, either because they fail or they're acquired by someone who can actually manufacture and distribute their product at scale. This has been the way of the industry for at least the last 20-30 years ever since the small molecule cliff hit like a brick wall.
So, the VC industry whose standard operating procedure is to unload companies onto public investors long before anyone even knows whether the drug or device would work, wouldn't touch Theranos with a thirty foot pole.
You might need to qualify that a bit harder or someone could quite easily point out that all of these worthless shitdribblers cause actual damage to humans.
They all lie, they all continue to claim that they hold the future in their feeble sticky hands.
Just to take, take, take.
You seem fixated on lying being a problem but only one of these two liars causes you to feel that her case is different? Maybe the difference between the two is in the lie of the beholder.
> Like if someone says we have this many users as a statement you have no idea what they are actually calculating
I think that's BS. User metrics are usually very explicitly defined (e.g. monthly or daily active users have always been clearly defined wherever I've worked, even if just for the sole reason that people collecting those numbers need to know what to count). User quality is definitely a gray area and estimating bot percentage has become increasingly difficult, but user metrics are not some ill-defined, fuzzy math notion.
Right I'm not saying that Zuck's staff doesn't know how to calculate MAU or ARR. I'm saying I'm not sure we can trust the 'median' (median on a scale of super-scrupulous to outright-dishonest) CEO is not counting things like inactive cohorts, newsletter subscribers, website hits when counting 'users'... or being very optimistic about whether a customer will renew when calculating 'recurring revenue'
I may be wrong! But I am definitely giving such claims the side-eye
For example, at a major social media company I worked at in the early 2010s, bots/spam users were deleted after earnings calls, not before. IIRC an employee had the temerity to ask "Is this honest behavior" in an all hands!??!
I'm 100% convinced that accidental website hits and bounces from unique IPs when viewing the ensuant shitty content counts as MAUs for most, if not all, major tech companies.
This is an area where deception is possible. For example, if the metric is background API calls, you can fake that too. What matters is how you define 'active users.' In fact, this is a common technique used in well known scam apps in Korea, often called 'vanity metrics.' Generating abusive users and background traffic that create no real business value, then packaging it as user growth. There are even people who specialize in this.
if someone says they have a billion users because they are connected to the doubleclick exchange... they aren't lying, they might be deceptive or simply foolish.
As part of due diligence, the buyer/investor should ask how these numbers are calculated and make their own judgement. Unfortunately I believe startups select for those who dance the border of deceptive and foolish.
But there is a clear line that gets crossed if you start actually making a database of millions of synthetic users and that's what happened with 'Frank' that sold to JP Morgan and eventually the founder was prosecuted