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She deserves no sympathy what so ever. Much like cyclist, Lance Armstrong, she perpetrated out-right fraud on her investors, employees, and customers and threatened to ruin them financially and legally if they exposed her. The kicker here, however, is that the fraudulent product she was marketing had the potential of seriously impacting the life and health of those who used her product. Trusting the results could result in actually missing a diagnosis of serious issues, resulting in delayed treatment, bad health, and early death or costing the patient money for treatment of a condition they didn't actually have.

Her motives may have been pure early on but once it became apparent that her product simply didn't work, any action taken beyond closing up shop or changing direction and investing in a new approach was unforgivable. In the sentencing to come, following the trial, I hope the judge throws the book at her with a substantial prison sentence and the loss of any ill-gotten gains.

It really does have a Lance Armstrong vibe, where, sure, the thing itself was pretty bad, but the defensive actions surrounding the core thing were ten times worse. Destroying many people's lives, and livelihoods, at the slightest hint of a challenge.

Theranos, though, does have the added negative attribute that the product was a medical device and not just an individual's professional athletics career.

Armstrong's actions had implications way outside of his individual career.

Still nowhere near as important as a medical device with false promises.

Absolutely, no contest there.

Yet another example of how our culture considers drug offenses to be deplorable while white collar crime is just someone being a little too ambitious. Not an attack on you personally, it's just a pattern I see a lot.

The comparison isn't even all that relevant -- one was people basing life-and-death medical decisions on a fraudulent device business built on fraudulent patents, on which the recently departed U.S. Defense Secretary Mattis sat on the board. And the other was... sports. Not that the culture of doping isn't bad for all the athletes in all sorts of ways, but there is a big difference when someone is making bad health decisions without your knowledge.

I think the main problem with people like Armstrong and Holmes is that they are widely admired by people and put forth as an example of "success" while in reality they are ruthless psychopaths who will stop at almost nothing to get their way.

Most cyclists were doping back then, so are they all ruthless psychopaths or just the one who won?

Everybody doped but only Armstrong went viciously with all his money and lawyers after people who claimed correctly that he was doping. He was on a different level from others.

Fair enough, I did not know this. That makes him worse than I thought.

Read some stuff about his behavior. He was a bad dude who would do almost anything to win and keep winning.

That is related to cultural mores as well. Do we not celebrate tech CEOs who have never made a profit?

They can become millionaires/billionaires by dint of their privately traded stockholdings, and the NYT will write a puff piece on them, but all we're doing is applauding them because they managed to convince VCs to float them cash to try doing something.

> Yet another example of how our culture considers drug offenses to be deplorable

Armstrong went just beyond drug offenses - he destroyed careers of people around him who wouldn't play along and attempted to call him out.

Betsy and Frankie Andreu, Emma O'Reilly, David Walsh, SCA Promotions, defrauding the USPS, lying under oath, etc.

Exactly. It's not as if this was a case of an individual only doing harm to themselves or 'just' cheating at sports.

Not comparable to the health implication for customers of a potentially large company.

Fair comparison in many ways with respect to the legal team. But Lance actually climbed Vontoux, even if he had x% illicit but commonplace help, x < 10. Theranos was claiming it climbed all these mountains no one had ever climbed before and it never did anything like it. I think Lance should be shown way more respect as an exceptional doer with illegal help versus Theranos which had exceptional help and did nothing.

In a field of criminals. Everyone in the top 10+ was likely doping.

True. I think the fact that he didn’t hurt anyone per se is a big difference.

Also, Lance Armstrong was actually good at something and he did comeback from cancer. While not the best excuse, every competitor was cheating too.

Her story is a case-in-point about why you have to be careful about giving advice in the form of "fake it till you make it", "no one knows what they're doing", "all self-doubt is Impostor Syndrome".

She undoubtedly felt what most people feel, she just took the SV advice too seriously and actually believed that no one knows what they're doing and it's all the same, so it's perfectly okay to forge ahead once you realize you're out of your depth and you raised all that funding without justified confidence.

My best version of the point from earlier discussions: https://news.ycombinator.com/item?id=19214749

I think one of the main things I took away from the book was how effective a certain type of legalistic bullying, like the younger Shultz suffered, is. Employee after employee cited fear of lawsuits as a reason they didn't come forward.

It doesn't matter what the actual legal situation is, the fact that the average person doesn't really have the ability to gauge what that situation is without paying an expensive lawyer, and the fact that even a lawsuit without merit can end up costing incredible amounts if time and money, means anyone except the very rich (or on the other side, the very poor) can be bullied into silence by aggressive lawyers waving around scary sounding cease and desist letters.

These people who are afraid of lawsuits need to start learning how to manage money and assets because there are ways to protect yourself. If you have something of value, you should always take steps to protect it. You can put your house in an LLC for example so if you are personally sued they can't take it. Then once you don't have much to lose on paper, lawsuits lose their power. The biggest advantage that a person has versus a company is that they have less to lose because a persons life doesn't end with bankruptcy whereas a companies life does. Furthermore, a person can create LLCs which are like virtual people in many ways related to credit and money.

Interesting. Have you done this? I’m curious because this sounds like a good idea, but am curious about what complexity this introduces into day-to-day life.

While I can’t really tell you why people are downvoting you, it should be clear that this LLC stuff is exactly the kind of moneyed advantage that the legal system ought not to reward that the OP was referring to.

It’s more tax efficient too.

Genuinely not sure why people are downvoting you.

Because it's just bad advice. They can hit your LLC with a lawsuit as well, they can make it so your LLC way of making money dies because they have you tied in court, and you might not even be considered as discreet entity (and thus protected) from the LLC (depending on jurisdiction). Not to mention the associated costs and extra effort (and all that for what? Preparation for any future personal lawsuit?)

> Genuinely not sure why people are downvoting you

Because he is condescending and because having to create an LLC to protect your house from legal harassment is the sign that the US legal system is completely broken, not the sign that people don't know how to manage them-selves.

I was being condescending towards the people who let a fake blood testing company send out fake results putting lives at risk just because they were afraid to get hit with lawsuits that would ultimately be frivolous anyway because they know its all fake!

> You can put your house in an LLC for example so if you are personally sued they can't take it.

If it's a single member LLC, that actually doesn't work in a lot of states (the whole purpose of the way LLC reverse liability protection is to protect the integrity of corporate joint ventures, which are the motivating use case for LLCs), and has either been found by courts are expressly specified by legislatures not to apply to single member LLCs in many states. There are a handful of states where it does apply, though, and others where the rules are unclear.

And even when it does apply, they can't take your house directly, sure, but they can get a charging order against any distribution of funds from the LLC to you that hangs around until you do pay the judgement, so you can't ever extract funds from the LLC. And, sure, you can mitigate the effect of that by just running more of your life through the LLC, but the more you do that, the more you risk the LLC itself being liable, either alone or with you personally, in any legal trouble you get in, in which case the whole purpose is defeated.

Also, LLCs aren't free to set up and maintain, there are fees and additional compliance/tax prep/record-keeping costs. It makes sense if you are wealthy (especially in a particularly SMLLC-friendly jursidiction), but not for most people, even most well-paid workers.

The house owned by the LLC does not have to be in the same state as where the LLC is filed. You can file the LLC in a state that has laws friendly to what you are trying to accomplish. Furthermore, services like LegalZoom make the costs negligible to the asset they are protecting especially since it doesn't make any money.

There are much more conventional albeit expensive alternatives like umbrella insurance but that doesn't change the fact that the fear of a lawsuit doesn't have to be so scary. I mean that's what many companies are banking on because the only people that really win in litigation is the lawyers.

> The house owned by the LLC does not have to be in the same state as where the LLC is filed.

It doesn't, but in many states to own real property, just as to transactions business, you'll have to register your foreign LLC as a foreign LLC, which often involves paying a foreign LLC fee equivalent to the franchise fee you'd have to pay for a local LLC in the same state.

Also, bankruptcy (which a judgement you can't satisfy without the “protected” asset could force you into) will bypass he protection, so basically this doesn't do much protect your assets if you actually need it to (that is, if you can't satisfy the judgement without the “protected” assets.)

There is nothing new here, if you piss off someone that is wealthy and they have vendetta, and you're not wealthy, they can make your life difficult. Whistle blowers take huge risks. Now we can talk about if that's the way we want to world to be or not, but right now rich people can threaten poor people with lawsuits and get their way a remarkable amount of the time.

Are we letting the board off pretty easily? We expect wage earners to potentially out their corrupt company and take the risks associated with it, but if you sit on the board and the unicorn valuation is big enough then we just wave off the fact that they never asked those questions either. No CEO wants a board that get's in the way but we give them a pass just because the valuation was big? That doesn't seem quite right either.

have a look at the board, and you might answer your own question

Having read Bad Blood, I kind of believe it. Hear me out (also have not seen it).

I really think that she thought she could make the machines work. I think Holmes and Balwani thought that, given enough time and enough smart people they would eventually get a working version. I think they thought -- they may still think -- that it was a question of throwing more resources at the problem.

The whole thing would have lasted longer if they had not put a deadline on themselves by actually releasing it into the wild with the Walgreens deal.

Is that not the same mentality of many Ponzi scheme operators?

Or every single one of them is motivated enough to lie about it.

"I really think that she thought she could make the machines work. I think Holmes and Balwani thought that, given enough time and enough smart people they would eventually get a working version. "

What I got from the book was that they gave up pretty early on making real progress and instead decided to lie. By not allowing their people even to talk to each other they pretty much made it impossible to make progress. If you have a big, hairy, unsolved problem the first thing you have to do is to make sure that as many people as possible understand the extent of the problem.

They are just soulless liars and bullies and deserve no excuses.

> What I got from the book was that they gave up pretty early on making real progress and instead decided to lie.

What specifically in the book made you believe this? I'm halfway through and so far it sounds like nothing worse than any other megalomaniac start-up founder.

They fired anybody who had any doubts like the CFO at the beginning of the book. Someone who honestly wants to solve a problem doesn't do that. They also never had any real idea how their stuff should actually work other a "vision".

I wondered why they were so afraid of a third version of their machine. Seems like they stuck with the second version even after it was clear it could never work. Seems like they were just ready to use off the shelf equipment from that point on.

The problem is that physiologically the blood you get for chem-10 (stuff like Sodium/Potassium) are completely invalid using finger prick (you rupture too many cells and they leak out their intracellular fluids, messing with your results). This is basic pathology 101 and completely negates any way to work around this fundamental problem. It goes back to the example they give at the beginning where she had the idea of an antibiotic patch, but you need IV antibiotics for delivery.

From reading Bad Blood, it seems that Holmes and Balwani were behaving in comical extremes from the beginning and constantly made personal enemies over a decade. They threatened people like mobsters, and it worked for so long because the employees were so junior or unconfident.

I suspect that had Holmes and Balwani just been a little bit nicer, Theranos would have quietly deflated, maybe turning into an entry-level lab automation equient supplier or something. Instead it seems like they went out of their way to make enemies and act suspiciously.

I haven’t seen the film, but it is interesting that at the very end of the interview the questioner gets to the point of “we’re you too easy on her?” His response seems to be that he was more interested in criticizing Silicon Valley and it’s “fake it until you make it” or “over promise, way under deliver” mentality, and didn’t want to paint her as a bad apple that would let SV off the hook.

Exactly, it seems as though he felt like he couldn't blame both SV and Holmes at the same time, so chose to blame the SV culture. I'm still interested in seeing the film and judging for myself though.

I don't get the same impression. Not having seen the docu and only reading the article, it's hard to tell, but based on that last few paragraphs in this article, it seems exactly like he is blaming both SV and Holmes at the same time. He specifically says a few times in the article that Holmes was a fraud, that she was not a victim, and that even within "fake it til you make it" culture, she as an extreme outlier. But he also is drawing attention to the fact that there is/was an entire culture of people supporting her, rooting for her, and trying to discredit anyone who called her out on her fraud (there are people doing this even now!).

Personally, I'll be pretty happy if the documentary calls more attention to SV's broader role in this. I loved Carreyrou's book, but I thought it, and the rest of the coverage of Theranos, falls quite short in exploring how Holmes and Balwani aren't the only bad people in this story. Holmes practically had an entire army of people enabling her (and even directly aiding her) through their fraud, from Dubois to Shultz to Mattis to Biden, to all of the SV investors and cheerleaders who didn't do their due diligence. Not all of those people necessarily deserve to be punished for their supporting of her, but it's also important to realize that Holmes didn't magically accomplish all of this fraud on her own.

That said, the response from Gibney in the last part of the article is kinda bizarre. The mention of Abu Ghraib is totally out of place, and he even attempts to draw a weird comparison between Holmes and Hitler, of all people.

> The mention of Abu Ghraib is totally out of place

It's because he made Taxi to the Dark Side. His point is that he's trying to be logically consistent in his ethical reasoning.

Ah, thanks for that. That makes it a lot less out of place to bring up.

Definitely agreed there needs to be a broader focus than just the character drama around Holmes. Every fraud of this magnitude requires a huge ecosystem of enablers and they should all be held to account.

She reminds me of Lance Armstrong. A lot of people cheat a little because everybody else does it but these people went several steps further by destroying people to cover up their misdeeds. She (and Armstrong) deserve zero sympathy.

One thing that struck me about Tyler Shultz is that (as the book emphasizes) he is the grandson of George Shultz, former Secretary of State and Theranos board member. Can you imagine trying to defend yourself against Theranos as a regular Joe?

There are lots of snake-oil salesmen whose first response when being confronted with their bull-shit is to reach for the legal department. After all, there is plenty of money in selling snake-oil and if there is one thing that lawyers like it is rich customers.

The importance of having people that short companies is that they can fund the lawsuits.

You cant short private capital though, at least not easily.

> Holmes and Balwani didn't just lie and cover up bad results, but actively crucified any of their employees who dared question what they were doing

This is what they have in common with Lance Armstrong - they didn't just stop at cheating, they destroyed or attemped to destroy everybody around them who attempted to call them out

yea, i don’t understand that at all. she is clearly a sociopath. when asked how he came to believe her initial intentions to be noble, he answers that if she cared about money she could have made a lot more. that is a strange and nonsensical answer, and even then, i don’t think she really cared about money as the sole goal. seems to me that she cared (and probably still cares) about legacy and her own ego. it explains her thing with her “wolf” dog, meetings at the same time that steve jobs apparently held meetings, her crafted wardrobe and voice, private jets until the company ran out of money, outlandish security detail, and the many, many other things that had nothing to do with a “noble” cause. but she probably did (does) care about money, but i think it was (is) coupled with the growth of her ego.

i am curious if he (gibney) was funded by someone who wanted the story to be softer such that the public doesn’t grow a negative opinion of silicon valley.