Potemkin startups

Was a passenger in a car heading out Page Mill Road yesterday, when I noticed a big, shiny, distinctively-styled office building that I'd never noticed before.

Sign out front said Theranos*.  Hm.  Was some scandal a couple months back, wasn't there?

Being a passenger, I did a quick search on my cellphone.  Ah!  Fresh news last week. Total FUBAR; looks like the lab wasn't actually following any standards at all, and maybe none of the reported test results were valid?

So there's this company with no actual product, and a young founder/CEO with no management experience, yet it has a fancy headquarters building and an absurd valuation?  If there's no product yet, shouldn't it be in an old warehouse, putting all that capital into getting the dang product ready?

There's a great risk in having young upper management, especially if your upper management has a gift for inspiring people - workers, investors, and so on.   Inspired people can easily (as "Bob" exhorts) pull the wool over their own eyes.  You need cynics in the chain of command, to keep track of the true situation**.

I don't know how much actual money has been put into that venture, or wagered on its success, but I get the distinct impression that it's been malinvested.

 

* A horrible name, really.  Every time I try to remember it, I come up with Thanatos.

** If I were trying to recruit a management team for a company with more than a few employees, I'd look for at least some people with military backgrounds.  NCOs are supposed to keep the workers and upper management in sync, right?  Like, making sure the communication is running, in both directions?

Comments

[Old AF Sarge]

Communication running in both directions...

A key part of the job indeed.