Before it was announced that uBiome was committing insurance fraud a few years back, my friend and I compared our test results and found that our very detailed, 10-page personalized biome reports were completely identical except for our names. So I believe they were also just completely fabricating their test results from the beginning, and some of the employees at the company must have known this.
>some of the employees at the company must have known this.
what always fascinates me isn't the people who are in on in but the people who are kind of on the edge. From the Theranos case I remember employees not being allowed to enter rooms, secret chat rooms, people being followed by security etc... like, how can you work for a company like this and have a sort of Twilight Zone or Kafka novel experience for years and just be okay with it?
I think it's like boiling the frog. If they ended up in a situation like that abruptly, most would bail. But the little day to day changes can lead to boiling the proverbial frog. We all do that to some extent. Members of the FAANG group of companies indulge in quite egregious practices from an outsider's (wider society) perspective but insiders feel it's normal.
They also are sitting around listening to leaderships carefully crafted justification day in and day out. I’ve had otherwise smart engineers who work in advertising tell me that people enjoy looking them, and any criticism of “user engagement at any cost” is met with bewilderment.
I honestly believe these sorts of blindspots of morality and critical thinking are due to under-exposure to the humanities. A lot of guys in tech could do with reading something - anything - that isn't 538 or a tech blog.
It would be extremely interesting to see what sort of conditioning or other source of behavioral differentiation (??) causes these people to simply not stumble on the overwhelming mountains of similar sentiment on the internet.
Did those engineers tell you that people enjoyed looking at ads, or did they tell you that people prefer looking at ads that are relevant to their search, when they made that search with commercial intent?
I have never heard anyone claim the first (Mind you, I don't go out of my way to ask people to say incredibly stupid things), but I have frequently heard the second statement getting misrepresented as the first. [1][2]
And there's also an entire canyon of statements on the spectrum[3] between the two, many of which I have heard.
[1] Mostly by engineers on, ah, this website.
[2] It's rather easy to make such a misrepresentation, just do a direct quote that drops everything after the word 'ads'.
[3] 'People prefer looking at ads[2] over paying', 'People prefer looking at X ads[2] over Y ads', etc, etc, etc.
I feel obliged to point out that frogs, when put into a pan of water which is very slowly heated up, do in fact jump out when it gets too hot, contrary to the old story. But, perhaps humans are occasionally not as smart as frogs?
https://en.wikipedia.org/wiki/Boiling_frog
I haven't seen anybody sit in a hot tub until they died, usually we get too hot and then get out. That's nowhere near boiling. Obviously, the boiling frog trope isn't intended to be taken literally.
> Members of the FAANG group of companies indulge in quite egregious practices from an outsider's (wider society) perspective but insiders feel it's normal.
One effective way to do this is to isolate the responsibilities of individuals such that no one but the top few have the whole picture view.
While employees may have doubt, they can justify their actions by thinking they are doing "their" part correctly. Which, I can relate to.
If I am not doing pseudoscience and am working on tech / systems that are good in my domain, why would I bother about the whole picture? Morally, yes. But if you have loans to pay and a family to take care of, and are getting your salary on time, everything else is the management's fault.
I can get a job in a similar field somewhere else.
And, IMHO, it is the management's fault out and out. The reason they get to take the big cheques is because they bear the responsibility.
It's not the responsibility of the average lower level worker to worry about it.
Having worked closely but briefly as a technical contractor for a firm that later turned out to be a scam, I figured this is it.
A combination of compartmentalization and churn can keep the charade up for quite a while, and if executed well you can have a pretty big operation with only one or two people being in on it.
I figured something was off but there's a whole gradial spectrum of Schroedinger's Accomplices where most people can seem to be conners or conned.
For this reason, I found the documentaries on NXIVM (Seduced, The Vow) quite interesting - the way the protagonists are framed and how everyone seems to have plausible deniability even with all the video material.
I disagree with your moral conclusion - we all have responsibility as individuals with regards to what our work contributes to. This goes for anything from military personnel to software engineers. That you don't have legal risk doesn't mean you don't have ethical responsibility.
Upvoted for your last paragraph, which is more and more important every day. Far too many software developers’ ethical compasses start and end at “well, the boss told me to write that code so that’s that!” We all have the ethical responsibility to understand the ultimate purpose of our labor and ensure it is a good one. “Just following orders” has a bad history.
> I disagree with your moral conclusion - we all have responsibility as individuals with regards to what our work contributes to. This goes for anything from military personnel to software engineers. That you don't have legal risk doesn't mean you don't have ethical responsibility.
Does that really work in the real world? When you don't have workplace rights and concepts like "at will employment", can you really expect the individual to have any sympathy towards the company or society?
If you and your job is as expendable as a tissue and you struggle your whole life to get one, be in one and earn the almighty dollar, where the lack of the dollar means your kids go hungry and cold, would you place higher priority on morals for "the greater good"?
Those who are made to do un-ethical things in companies are usually picked because they have no other way than to be in the job, or are greedy enough to put their morals behind them.
Good luck trying to force morality on either of them.
To me, this rings similar to people who argue against eating animals with "but what if you're starving and alone on a deserted island?!" (and no, that's not a straw-man)
I think you conflate these two things somewhat:
Of course there are always extreme situations when people are left with tough decisions and have to choose between "doing the right thing" and sustaining themselves and their family.
Separately, there are egotistic people who will disregard the consequences of their actions on others. For those who only care about themselves, it is hard to change things without changing incentive structures.
Finally, some are just ignorant because they don't know or didn't think it through deeply.
Neither of these are justifications to look the other way for those who can find employment either way and are choosing between an $80k job and a $200k job.
Possibly nefarious stuff, but indications seem like it's mostly just a lot of internal competition, people unwittingly building doomed prototypes and such, like the famed "Acorn OS" that was a candidate to be iPhone OS but based on the iPod firmware rather than OS X.
> One effective way to do this is to isolate the responsibilities of individuals such that no one but the top few have the whole picture view.
The following is probably just an already completely debunked conspiracy theory with zero basis in fact but what you describe is precisely how special compartmentalized intelligence works. Maybe many of the corporate and government organizations in security and intelligence operate in this siloed way, possibly at the risk of a lack of oversight and accountability which helps any abuses go unaddressed. Official secrecy oaths and classification perhaps compounds this vulnerability to misuse.
And except for the public heads very occasionally rolling, it's likely nobody takes responsibility (in a justice sense) when abuses occur. How do you get people to carry our these things? Simple finance, and isolation could be one way as mentioned. Coercive control via blackmail, planting evidence, fake accusations or intimidation could be other effective methods, especially when you need to secure the cooperation of key people outside the organization, and especially when your daily work involves intelligence collection and deception.
If it occurs at a deep level under the security and compartmentalization shields, then it's unlikely checks and balances could correct it if this sort of corruption was occurring.
"One effective way to do this is to isolate the responsibilities of individuals such that no one but the top few have the whole picture view.
While employees may have doubt, they can justify their actions by thinking they are doing "their" part correctly. Which, I can relate to."
When you read about iphone development Apple isn't that different. Only Jobs and a few other people knew the whole picture. The rest worked on their little area while not seeing the whole product.
> employees not being allowed to enter rooms, secret chat rooms,
This is providing employees only as much information as needed to do their job. Apple, for instance, seems to do this. So it might not ring any alarm bells with the employee.
Yup. I work at a non-Apple FAANG and there are many rooms/buildings I don’t have access to (and many chats I don’t have access to- it’s all need to know).
I was in a startup in the early aughts and had this experience. We had a telecom company that was supposedly building the "next interwebs for business". Ambitious, hard to sell to people since it was insanely complicated.
I was there at the beginning, then you start to see it. The closed founder meetings, no more team meetings. The hushed conversations at lunch. The rumor mill started to circle - VC money running out. The CEO blew all the money on coke and hookers. Nobody wants to answer basic questions like why the rollout of the new product is taking weeks and weeks to get going.
People KNOW what's going on, but nobody wants to jump off the ship, only to find out the company figures it out and all your co-workers are now millionaires and you're back at some other startup busting your ass for some unknown future.
People hang on, believing its going to happen, then you show up one day and the office is dark, the cop outside says you're not working today or tomorrow or ever really and you should go home. You hold out hope the company can pull out the nosedive, and when it doesn't, you have to go through the five stages of bereavement until you accept that it was really doomed from the start and you should have seen it but didn't want to believe this company was really just a complete façade to fleece money from some big VC firm.
I worked at a place that had a top secret "spam team" shrouded in secrecy. Secret meetings, separate code repo, iirc even a dedicated meeting room, etc. The official reason was that they didn't want their spam detection algorithms to be leaked. Coincidentally there was a lot of outside speculation about whether being in the free vs. paying tier of customer would affect this spam detection.
This is actually sort of reasonable. The details of automatic moderation tools need to remain secret otherwise they can be gamed really easily. Even manual moderation strategies generally work better if they're not explained (see - HN itself).
The thing about Apple is it is pretty clear the company is not a giant fraud, as they have a long track record of shipping functioning products. The company started by shipping a product.
Theranos, by contrast, did not have anything functioning. Ubiome seeks not to have either though I admit it is less clear a case without expertise.
You don't start working with a company if you suspect fraud. The point is secrets and a need to know basis like this is not uncommon in legit businesses. It's not a sign of a company being fraudelant.
As far as Theranos goes I would lay a lot of blame on big shot investors and the press. they had access or should have asked for way more access than the little employee.
Even if you work there and have a bad feeling you are probably doubting yourself quickly when you read that you are actually working for the hottest company in SV.
In a large company, this sort of thing is perfectly normal. There are plenty of buildings in Google where random Googlers working on Ads can't enter.
Unless your work interfaces with what happens in those silos, you generally don't have any idea about what's going on in the Android Hardware Testing building, or the garage out of which Project Loon ran before it was shut down.
I hope that most start up employees view equity as a low-stakes gamble and not a money-making scheme, because the odds of getting rich, or getting anything at all, are very slim. I know that's how I've viewed my equity at the startups I've worked for. Besides, there are way more tangible and guaranteed benefits to working for small companies and companies in interesting spaces.
Normalization of deviance. Little by little bad habits are formed and not stamped out because nothing bad happen. Until a space shuttle explodes. Then years of wrong process are found.
That's why you have to empower new hires to question your methods: someone from outside will see what is not normal, if you dismiss them you may be missing opportunities to right things before you crash.
It would be easier to identify these places if it was the best and the brightest that left. Those with confidence and/or the financial stability to not worry about it can leave. There are plenty of very good and very bright people that don't fall into those categories for one reason or another (young, external factors making it risky to leave, etc).
The problem is also that the best and the brightest aren't wearing always truthful signs on their head marking them as such. There is the bad manager spean "disgruntled former employee" to try to absolve themselves and try to discredit anything they may say.
If it was that obvious then we wouldn't even have interviews.
If you work in tech and you're very bright, it's trivial to see the signs of a bad workplace and be unable to find work elsewhere. I do not believe anyone would choose to stay if they were very talented, because it should have been obvious there were problems and it should have been easy to leave.
Everybody I know in tech that's any good has no problem finding a new job on short notice, including people with less than one year of experience.
I spent my whole week writing code to circumvent browser level privacy guards, to gather more data to sell more targeted ads. Most of us make similar ethical transgressions regularly. Ultimately we're all just slaves to the machine as long as it pays for our lifestyles.
I don't mean this as a personal attack on you, but for everyone who is similarly compromising your morals in return for a cushy lifestyle: please stop.
You're not a "slave". You're extremely well paid with in-demand skills, and you could do something else with them. If you keep doing this, you're no better than the tobacco merchants.
I think I agree with your sentiment, but should the GP be worse off for being honest/pessimistic/seeing things clearly? I'm sure there are lots of people doing what the GP describes that don't feel they are doing anything immoral. Are they in the clear? If you're actually participating in fraud it's one thing, but doing something legal but morally dubious like working around browser privacy comes down much more to individual perspective.
This potentially is another argument for laws / regulation.
What’s seen clearly? The comment asserts a lack of morals and takes comfort in an imagined crowd with him. The GP does imply he thinks what he does is immoral. It’s on him.
Why should you intentionally disadvantage yourself when someone else will just step in to fill your place? This view doesn't seem any different than expecting a corporation to voluntarily forego a profitable segment of the market.
Regulation is required in such cases. It's unrealistic to expect otherwise.
> no better than the tobacco merchants
Prior to a certain time, tobacco producers honestly had no idea how harmful their product was. Once they found out, they actively tried to hide that fact from everyone. I don't much like adtech, but unlike tobacco it doesn't cause direct physical harm to the individual. They're also pretty up front about the fact that they try to track you.
In the city I live in there are a lot of jobs in tech for gambling companies. I swore I'd never work for one of those companies, and know others who've done the same.
I often feel guilty for not being as altuistic as I'd like, but at least I know I'm not using my skills to do something that a net negative for humanity.
When I was contractor I had a contract for a few moths with a company that discouraged people from talking to each other and everything was very secret. It felt a little weird but then I thought maybe a lot of companies do it so I played along. For example you hear about people at Apple never seeing the whole device they are working on.
I guess from the inside it's not always so clear to the little guy what's normal company weirdness and what's fraudulent. Although higher up execs should know.
> Twilight Zone or Kafka novel experience for years
Most corporate work is like this. Secrets everywhere, managers acting like they have stuff to hide, actual crimes happening off-camera (and sometimes on-camera). If you spend a year or so working in such an environment it just doesn't really raise your eyebrows unless something really extreme happens. Anything below acute grievous bodily harm is background noise.
I mean I can imagine Apple doing the same stuff. The CEOs of Theranoses get there because they have an incredible ability to convince those people that they are working at a future Apple.
Paycheck. Ultimately how many people were prosecuted at Enron or Lehman Brothers? And honestly why wouldn't you be okay with it you're not killing anyone.
You need the money, people pretends like changing jobs is easy, it is not the case for most people. Also, if the leaders cheat why the employees at the bottom should care for it? are they paid enough to care? they are not going to earn so much from the success of the company and not loose so much from the failure. They are just employees
Haha, wow... my insurance company actually paid for their test for me years ago. I'm tempted to share mine here too, just to see if we both had the exact same results as well.
People can justify all kinds of things if they are making money. I knew one of the programmers who was caught up in the Madoff Ponzi scheme. He went along with it for a long time and enriched himself. He had to have known what was going on.
As someone who has had multiple tests over an extended period of time the results were extremely detailed and changed over time. They list every bacteria and the % in each.
Are you saying that you had the exact same list of bacteria and % of each?
Test are not identical. I have a collection of hundreds of different results group by a few medical conditions I was researching.
The data is extremely detailed
and changes to diet reflect changes to samples.
> The data is extremely detailed and changes to diet reflect changes to samples.
Can you verify that they changed in ways that corresponded with your diet? It's possible if they were exceptionally lazy that they just generated a new report for each date haha.
And there were semi popular sports personas who did daily testing and charted foods to changes.
My favourite blogger was a women who's sport involved falling into the dirt and eating it often as a result. Her bacteria profile was mostly a bacteria type found in dirt.
The field is open for a better managed company to take on these challeges.
Are you referring to gauging interest by setting up fake service pages?
If so I suspect most people can see there is a gulf of difference between offering a service on a website and saying its currently unavailable when people hit 'buy' vs "securities fraud, conspiracy to commit health care fraud and money laundering."
Funny, they must have had a good laugh at the expense of their customers while the show was going. I think a real analysis needs tho have fresh feces, if the customers had to send the stuff to their lab then that would not have been the case. (wikipedia says it was the results of a test kit, still not the same thing)
I doubt it was a fabrication. It was likely a software error You could have been linked to the same underlying database file, that could be the ‘default’ output from the bioinformatics pipeline when the quality was low, or some other mixup. They did in fact process your poop.
Employees were always trying to do things the right way. JZ just wanted things done and didnt care how it was executed. If it wasn’t how they wanted it done, they’d find someone they could pay to do it.
Could it be that you did have comparable results? The thing about ubiome was that the results were so high up the evolutionary tree (or at least when I did it in 2014 or so). So it would be like comparing a fish to a tree.
That said, it told me my composition was like that of an East African, which I am not. That wouldn’t surprise me as I have gut issues. My big hope for the next 30 years is we meaningfully crack the nut on microbiomes and can bring the next major evolution in medicine to a reality. We need these kinds of companies as a step 1.
>Richman was even named an "innovator" winner in Goop's "The Greater goop Awards" and at its peak, uBiome was valued at $600 million.
Considering how questionable Goop is that the fraud seems about right.
In the meantime the whole medical start up where they suddenly can test, for cheaper, better, etc seems to regularly come up short on the actual testing, results, or even just valid use cases.
Much like Theranos nobody ever seems to explain how these kind of companies can just suddenly test for more so easily where the existing medical industry just hasn't been able to.
Of all the things that the start up ... "system" can do well I kinda question their ability to suddenly become amazing complex medical device inventors / scientists. I recall some folks who work in that industry and they noted that creating new tests and diagnostics and equipment is often incredibly slow and iterative. That doesn't seem very start up-ish. The magical breakthroughs are rare.
Remember the wave of all those "smart" Silicon Valley CEOs who were so convinced they could build a better ventilator at the height of the COVID ventilator shortage? All those folks who thought they could just throw together their engineering knowledge and hacking skills without ever having experience building a medical device?
This sort of tech hubris is all over the tech ecosystem. Folks who believe their startup prowess means they can tackle any medical device with fake-it-till-you-make-it or fail-fast-break-often mentality that often fails in reality.
Like when moocs were going to replace the University and now that University has been online everywhere for more than a year nobody even mentions the old moocs that were supposed to cause this shift when instead a pandemic did it.
A book, "Failure to Disrupt
Why Technology Alone Can’t Transform Education", recently came out about exactly this. In an interview, the author, Justin Reich, explained that schools perform so many different functions in so many different ways that MOOCs neve had a shot at replacing it. Instead, it got swallowed up and and integrated with our existing educational system.
It's never been about "disrupting" anything, least of all education and healthcare. It's about convincing enough investors that you can, and pulling in as much money as possible before the whole thing collapses.
Not true for all startups, but increasingly common among the moonshot ones.
A few years ago I went to a coding bootcamp. I had very mixed feelings at the experience.
It was 'run' by the local university, but really was just a package deal they bought from another company.
I gave the university some feedback that they have all the resources at the university to do WAY better than these commercial bootcamps... but the folks involved bought the package deal and are invested in it.
It's sad, the university IMO could do better, if they tried.
Meanwhile the traditional unversity system does work, but is a huge time investment, and the bootcamp system works 'kinda' for some folks ... but fails most IMO.
It's the innovator's dilemma[0][1], plain and simple. They generally can't innovate a new model that will cannibalize their existing business to a large extent, without intentionally creating a sub entity that is completely outside of the jurisdiction of the existing business.
When I was involved in rebuilding the Yahoo! Homepage back in the day we had loads of widgets (Mail, Facebook, TV Guide etc etc.) and we were told to remove them because people were staying on the homepage and using them rather than being a funnel to go to other Y! products.
The Facebook widget I wrote was better than being on Facebook and it still fills me with irritation to this day they shitcanned it :-)
They have to a certain extent. As an example, half of med students attend class "rarely" or "never" preferring online prep material. The fundamental problem is that the utility of universities is more about credentialing and signalling than actual learning. The Moocs are fine for learning but have 0 credential value. Until that changes they won't replace universities.
They did not break the traditional learning way, but they help a LOT of people, me included, to learn new things.
Could I learn them otherwise, from books and web pages? Sure, but MOOCs help. Did I already attend a university before, so I can guess what MOOC is good and which one is BS? Sure. Are they much less effective than traditional university? Yes. Of course.
But, they are not useless and I am glad they exist, even when they were a bit overhyped in the past.
They're useful, but I could never see them replacing small-group teaching (1 PhD student/faculty member to 2-3 students), a standard feature of my university. It lets them focus on exactly what _you_ need at that time, and can pick up on weaknesses and misunderstandings you might not have even realised yourself.
And the patient will die if their wifi goes down because it's a piece of crap that listens on a websocket for a stream of commands to inflate or deflate.
Powered by Kafka so if the patient dies they can just open up Kibana to scour the logs, patch the life support microservice cleverly nicknamed Lazarus by the engineers, and then replay the state with the fix in place to bring them back online. I mean back to life.
The ventilator thing was kinda scary. Like ventilators I assume are kinda expensive more than just say that the medical system is wonky ...
It was kinda terrifying the idea that we'd run through COVID with hordes of people hooked up to equipment someone came up with by dorking with a 3D printer and some old parts from a vacuum...
It was telling when you didn't see established ventilator makers coming up with their own ad hoc cheap-o designs... much like you didn't see Theranos's competitors make wild claims of their own similar device ... probably for reasons.
>came up with by dorking with a 3D printer and some old parts from a vacuum...
I get the point : it's a scary proposition to have 'hacked' solutions to life-and-death medical struggles that have not yet had the time to be properly vetted for errors or bugs..
BUT
1) Most invention came about the same way, with a rough idea of the goal while attempting to use off-the-shelf/available techniques to attain it.
2) The COVID-19 pandemic was out-of-the-ordinary. If truly worst had come to the worst and there was a total break-down of society and medical care, things like 3d printers and old vacuum parts could have been appropriately re-engineered into appropriate medical care devices by those with the professional know-how to do so.
In other words : even if a "3d printed ventilator", for the sake of argument, is a somewhat hazardous idea in the hands of non-professionals, in the event of cataclysmic world-collapse i'd rather there be , even if simple and preliminary, a mediocre set of tools available for professionals to continue their work where possible.
In my opinion the benefit of these designs being available outweighs the disadvantage that Joe-Bob down the road may try to practice self-tracheostomy procedures.
>It was telling when you didn't see established ventilator makers coming up with their own ad hoc cheap-o designs...
the only thing that tells me is that the profit margins weren't 'right enough' to interest large corporate backers into helping -- especially during a time of economic recess and beginning of thrift strategies from the worlds' corporations in expectation of economic problems down the line until the pandemic is over.
The British NHS pay Mercedes F1 for 10,000 units of some whizz-bang CPAP machine during the pandemic.[0] CPAP machines certainly aren't ventilators, but Mercedes F1 certainly isn't an established ventilator maker, either.
The tech bros also didn't understand that we also had a shortage of people qualified to intubate and monitor the patients, even if you got the some rinky dink machine.
"But something is better than nothing" isn't actually true in a lot of medical situations.
Probably a good thing when you look at the prior art. Imagine a Juicero style ventilator that only accepts DRM'd oxygen tanks on a monthly sub and barely works better than a foot pump for an air bed. Or another medical device sold to an advertising heavyweight, like Fitbit.
A better example is the Bluetooth contact tracing from Apple and Google. Laughably flawed from the beginning, and yet hailed as an incredible innovation on this very forum.
15-20% of Americans don't own a smart phone. An additional X% don't religiously carry their phone around with them constantly, or at all.
The plan required nearly every single smartphone owner in the country to voluntarily use the tracing app, and keep their phone on them at all times in any public setting. Short of that, the results weren't actionable. If the results aren't actionable, people won't opt-in, and the results will be even less actionable.
...and oh yeah it fails in vehicle traffic, or any scenario where people are on the other side of a piece of glass or wall. Hello false flags.
These flaws were obvious before any company wrote a single line of code. It was silicon valley hubris, and a textbook example of a hammer seeing everything as a nail. It predictably failed, and did nothing but distract from actual efforts.
But the worst part is that now all of our smartphones have this insidious BT tracing technology built into the operating system. I am sure Google and FB would LOVE to know all the people we're near, in real time. This technology, brought about under the absurd false pretense of trying to help covid, is here to stay, baked right into the operating system.
Damn, I had forgotten all about those ventilators. Did anything come of any of them?
In my recollection, it was far less Silicon Valley CEOs, and more open-source hardware enthusiasts crowdsourcing 3D printer designs. Some of them looked as if they could potentially work, but, of course, it also seemed potentially an incredible amount of hubris.
Ventilators were discovered to be generally not helpful in treating severe COVID cases, and once that practice ended so did the demand for new ventilators.
Nobody really got a chance to put any new ventilators to the test.
As wary as I am of the situation, we never really saw anyone given a chance to see what those ventilator inventors would have been able to do.
The fraud goes deep in the Silicon Valley Tech CEO pretending-to-be medical device manufacturer / ventilator hero world:
> "Yaron Oren-Pines, who is listed as CEO 0f InCommon in San Jose on both Twitter and LinkedIn, responded to a tweet sent by President Donald Trump on March 27 calling for General Motors and Ford to immediately begin making ventilators. Oren-Pines responded to the president's tweet, saying, "We can supply ICU Ventilators, invasive and non-invasive. Have someone call me URGENT." Oren-Pines has not tweeted since.
Three days later, according to BuzzFeed, New York apparently paid Oren-Pines $69,102,000 for 1,450 ventilators, or $47,656 per ventilator. It was the second-largest purchase made by the state of New York for coronavirus-related medical supplies, according to an analysis by the Albany Times-Union.
To date, New York has received no ventilators from Oren-Pines.
A state official, speaking on condition of anonymity, told BuzzFeed that New York made the deal with Oren-Pines on the recommendation of the White House coronavirus task force. The state has since ended the contract, and is attempting to recover the money."
> Three days later, according to BuzzFeed, New York apparently paid Oren-Pines $69,102,000 for 1,450 ventilators, or $47,656 per ventilator. It was the second-largest purchase made by the state of New York for coronavirus-related medical supplies, according to an analysis by the Albany Times-Union.
> To date, New York has received no ventilators from Oren-Pines.
This is either sheer incompetence or brazen corruption.
In my experience, it's usually the former, but I'm having trouble believing that this one isn't the latter.
> New York made the deal with Oren-Pines on the recommendation of the White House coronavirus task force
Everything about the White House coronavirus task force has screamed "corruption" the whole way down.
From this article [1], one of several such investigations:
> Many of the volunteers were told to prioritize tips from political allies and associates of President Trump, tracked on a spreadsheet called “V.I.P. Update,”
> Few of the leads, V.I.P. or otherwise, panned out, according to a whistle-blower memo written by one volunteer and sent to the House Oversight Committee.
> ...personal relationships and loyalty are often prized over governmental expertise, and private interests are granted extraordinary access and deference.
Remember the context. We were staring down mass casualties due to dramatically greater need for ventilators than available supply. Something that maybe kinda worked a little bit 1 in 100 times could have preserved a lot of life. We got away with being picky because the situation got intercepted by other mechanisms before becoming that desperate.
So what? One of those CEO's was convinced he could build a better rocket without having any experience with rocket science, and he did. Why not ventilators?
> The apparent slight prompted Musk — one of numerous Silicon Valley entrepreneurs with whom the governor has a long-standing relationship — to lash out at the media and implore Newsom in a tweet to “please fix this misunderstanding.” Musk shared screenshots that appeared to show a hospital executive and a Los Angeles County health department official confirming they’d received medical equipment.
> When asked Thursday about the discrepancy, Newsom said he had not yet seen the information Musk shared on Twitter.
> “I was not personally aware of that list,” Newsom said, adding that “I look forward to learning more about where they went and I’m grateful for his support.”
> Later Thursday, Los Angeles County Department of Health Services Director Christina Ghaly said in an emailed statement that Tesla had provided 100 bilevel positive airway pressure units in March — devices that can reduce “the need for certain patients to be placed on mechanical ventilation,” Ghaly said. The company also provided 200 gallons of hand sanitizer and 860 face shields.
The "innovation" in the medical start-up space would be "indemnification".
Take a startup that has real results and fund them through FDA approval and backstop them when they get sued because the device isn't 100% (no device ever is).
I had a long talk at CES about 5 years ago with a doctor who created an asthma monitoring device for his daughter that would notify him and the school nurse when his daughter had an attack. I guarantee that device worked pretty damn well due to self-interest.
He couldn't get anybody to touch it. Everybody knew that you were going to get sued the moment some child died and a message didn't get delivered. Nobody would indemnify him even if he somehow managed to get through full FDA approval.
Want innovation in bio? Backstop the little people who have real devices and real results rather than funding well-connected, turtleneck-clad marketing charlatans.
You see the same problem in aviation. Other than the largest commercial airliners that are used in the most developed countries to fly passengers, most aircraft (cargo, general aviation, etc) are all using 50 year old designs. Why? Liability. Despite instruments having become much lighter, heartier (to weather conditions such as icing, etc), and more accurate than in the past, aircraft continue to rely on old designs. Because nowadays, creating a new aircraft and certifying it costs a _lot_ of money. So Piper, Cessna, Boeing, and others continue to use old designs that have already been certified, despite there being cheaper ways to achieve just as reliable or more reliable aircraft due to newer technology.
> In the meantime the whole medical start up where they suddenly can test, for cheaper, better, etc seems to regularly come up short on the actual testing, results, or even just valid use cases.
That's because medical testing is hard, more testing doesn't always lead to better treatment, and the people who have devised existing testing processes weren't so stupid that a 20-year old with no background in medicine can just come in and upend the entire system on their first try.
You end up trying to build a startup to solve a decades-old-problem that already has reasonably-good-solutions, in a field where R&D takes decades, costs hundreds of millions of dollars, and where you will have to figure out an in into an established old-boys-network in order to actually sell your product, if you get it built. All in an industry that's both cost sensitive, and highly cost-insensitive at the same time.
If you actually think <some modern medical procedure> is overpriced, and wasteful, it would probably be good for you to work a few years on optimizing an existing lab's processes, before you jump straight from college into trying to optimize a novel process that hasn't even been invented yet.
Moderna and BioNTech were both startuppy, neither of them had any products and they were working on cancer moonshots. They happened to have already gone public, but it seems like that's because they ran out of runway.
Moderna and BioNTech are startup-ish. Both ~10 years old, with <1000 employees. They're not established pharmaceutical companies like Bayer (founded 100+ years ago, 100,000+ employees)
I think we didn’t think a certain type of person could lie like most people when it comes to their money?
I remember seeing Holmes in that Job’s get up, and knew something didn’t smell right, but was embarrassed to even bring it up——knowing their would be the backlash.
Looking back I don’t think I have ever met a truthful wealthy person? They seemed to make their wad on lies?
Scientists don't know what this number means. Doctors don't either. And yet this number from a test result from a company in SF means something to someone in SF. And no one can figure out why.
We (scientists) know this number, be Academia, clinical, etc. After all, we have grants and budgets to follow and we are skeptic of anything too expensive or cheap.
Fraud in the startup world is a lot more prevalent than might be well known. NS8, Communiclique, Lordstown Motors, Trustify, and so many have come to light in the last year.
Investors don't do enough due diligence and trust their own gut too much.
People lie about having a startup all the time , or perhaps they incorporate somewhere but lie about having customers/products/employees - all those pesky ingredients necessary to actually have a business. I wouldn't exactly call that fraud in the "startup world", but rather fraud in the investment world, as the goal is to bilk investors. This type of fraud is very common whenever something reaches the public consciousness, but the swarm of conmen selling X doesn't have much to do with the real startup eco-system anymore than someone selling you a piece of the Brooklyn Bridge is a fraud in the bridge world.
For those wondering about lordstown - first I heard of it
"
A shareholder lawsuit was filed Thursday against an electric truck startup company claiming it has defrauded investors by making spurious claims about the number of preordered trucks and the progress it has made in starting production
"
https://www.marketwatch.com/story/lordstown-motors-accused-o...
It gets even worse than that for Lordstown (from the same source above):
"The Hindenburg report said a recently announced $735 million deal for 14,000 trucks was to a purported buyer who doesn’t operate a vehicle fleet and is based out of a small apartment building in Texas.
The company received unwelcome publicity in January when a prototype vehicle caught fire 10 minutes into its initial test drive."
> Fraud in the startup world is a lot more prevalent than might be well known.
This is quite true. I'd actually estimate it north of 50% given my discussions with various people over the years.
I would argue that its probably better than this in the "bootstrapped" arena rather than the VC-funded arena. VC lottery tickets seem to attract fraudsters like flies.
> Investors don't do enough due diligence and trust their own gut too much.
This is probably true, but one of the real problems is that serial fraudsters really don't get punished. In addition, the bottom-feeding lawyers that enable them also don't get punished.
A successful lawsuit against one of these fraudsters will cost you at least a megabuck. It's almost always more cost-effective to walk away with whatever payment you can threaten out of them than to actually file a lawsuit.
I met Zach when he first started uBiome and moved to Chile. He was pationate about what he was building, and about the opportunity and impact it could have on the world. This was 2011, so he was in the very early stages. If I recall correctly, he was calling uBiome the 23&Me of your gut biome instead of DNA.
He was absolutely the last person I would expect to be caught up in something like this, and when the news first broke a few years ago, I reached out as an act of support, not looking to find out what happened, or anything, just thinking to myself....how did this happen, this isn't the Zach I know, maybe he needs someone to talk to.
The lesson in this I think isn't to just pile on about how SV is full of frauds, and pile on with a bunch of hate, but rather to understand that there is a slippery slope, and people get caught on the wrong side of it. Make sure that doesn't happen to you.
It further strikes close to home because I'm the founder of a sleep-tech company (https://soundmind.co), an industry full of snake-oil and BS. We're extremely conscious of this view of the industry, and call it out where we can.
I've also seen many start-up pitches where the numbers thrown around are absolute BS, companies that I know aren't doing well, and the founders yell about the million dollar deals they have.
It's the one thing I hate about this industry, but the gong continues to bang on about growth, growth, growth and the numbers you need to hit.
Many, many founders take the easy way out, but, to quote Ryan Holiday, The Obstacle Is The Way.
Any suggestions on how we fight this general rah-rah-BS attitude in the industry?
If you won't mind a bit of unsolicited advice since you seem like a person who cares and might value it.
As someone who's interested in quantified self, etc. -- this kind of landing page is exactly what makes me think "bullshit" (and yes, in particular for Soundmind, I've clicked on it few months ago and left quickly). This is a kind of thing I hate about QS startups, I'll elaborate:
Literally the first thing it does is asking me for my email (seriously, who subscribes the first moment they get on the website?). Shiny, takes ages to scroll with useless background images and little actual information. I'd much more trust a simple single-page site which gets straight to the point -- maybe then you can convince me to subscribe.
I'm actually surprised as well at how many people sign up, but we're still in development, so what would you have me do?
We're not gathering the emails so we can spam people, we're figuring out where we can reach potential customers, who these people are, and will be sending them question aires to fit them into our trials, and later on the waistlist.
We took a page right out of superhuman, and as far as getting people interested, it's working well enough.
Btw, we're not a QS startup, we're a sleep tech.
When we've got product and people using it, we'll update the website, and perhaps it will be more to your taste then. But at the moment, 5% of people who visit the site are signing up, so apparently we are striking the right nerve with some people.
> Any suggestions on how we fight this general rah-rah-BS attitude in the industry?
We start actually punishing white collar crime. Kids are growing up learning there are no downsides to white collar crime - whether you're Elizabeth Holmes or Jordan Belfort, even if you get caught red handed stealing BILLIONS nothing happens.
When there's A LOT of cash flowing around, you're bound to get some fortune seekers here and there.
And it is in the nature of SV to invest early on in companies and industry which might be worth billions 5-10-15 years down the road, even if the concepts are far fetched.
Tbh, I think some investors are more than willing to suspend their disbelief, whether it is the tech itself, or the initial business models. If enough people hop on the band-wagon, and you're the early bird out - you could still make money on something wildly unfeasible idea.
In any case, that kind of culture and environment will surely attract certain people. Or transform people.
Any suggestions on how we fight this general rah-rah-BS attitude in the industry?
Maybe flipping the criteria used for evaluating investments. Instead of having founders give pitches and get evaluated on their confidence and charisma (and made-up numbers), find the most unassuming, drab, dull, but brilliant geniuses and convince them to take a lot of money in exchange for building what they would build anyway? Less Jobs, more Woz.
Makers are not interested in speaking with investors, because latter usually understand the shit that has to be actually done even less than their current CEO.
I was a friend of a friend of Jessica, and your impression of Zach is the same as I had of Jessica. I am shocked. I wasn't close enough to feel like it made sense to reach out.
Exactly! OP could barely disguise the company shilling, I'm hardly going to trust his opinion on whether or not another startup CEO was a fraud or not.
You fight the BS by being able to see it, and see it early. Whenever there is opportunity, there will be fraud, particularly when you’re selling people hole in some form.
I completed the uBiome test in 2017. My insurance was billed $2535.02 and I subsequently owed $434.98, in addition to the uBiome test fee (I forget what that was). When I received the results I saw that there was no trace of the type of bacteria that was contained in my probiotic that I had been taking religiously for a long time.
Total scam from start to finish. Throw the book at them.
> no trace of the type of bacteria that was contained in my probiotic that I had been taking religiously for a long time.
That's not how it works. The probiotic you took was full of bacteria DNA (maybe, probiotics rarely hold up to their advertised claims) which had to make it through your stomach, several meters of small bowel, and then to your large bowel. The DNA in that probiotic was likely snipped apart so many times its just in the noise at this point.
Fun fact: your small bowel and large bowel have significantly different biomes. Your small bowel has more in common with mouse stool than it it doesnt with your small bowel!
Anecdata: I've had the unfortunate need to have my gut biome taken a look at. Honestly, I'm not certain how the process was done, but my pro-biotic at the time showed up clearly in the results I was given.
> received funding from Silicon Valley investors like 8VC in San Francisco and Andreessen Horowitz in Menlo Park, which hold 22% and 10% stakes in uBiome, respectively
Shouldn't we expect long-established and well-respected VCs to do a very heavy due diligence, both initially and perhaps even more importantly continously to ensure something like this doesn't happen? Especially in the health field. I mean, the VC brands are used as a stamp of approval.
When you try raising money from VC in San Francisco, the people you're pitching to are more focused on communicating with each other (behind your back) and trying to either get you to think you won't get any money or that you won't get as much as you want.
They are not really focused on the details of your business, especially if it sounds right to some PhD that works for them as a technical expert.
For example, you can pitch to multiple VCs and now they can either start a bidding war (because you either lie or tell the truth of your existing offers, and they do not communicate with each other) or they can communicate together and get a discount because you're not playing the information sharing game.
The dynamics of raising money are not really fair or focused much on what you're doing.
Sure, I've kinda gotten the gist of that. (Thanks for the summary though!)
Still: I kind of think that especially in the health area, there's a pretty large risk of e.g. the Andreessen Horowitz brand being tainted. It should be in their self-interest to protect themselves against this in the future, by applying more continous due diligence.
The complaint says that the founders told investors that their model had been cleared by legal counsel, when in fact their counsel had warned them that it was "risky" and potentially fraudulent.
This might be a naive question, but... Shouldn't the lawyers have been involved in the investment rounds somehow? I get that there's attorney-client confidentiality and all, but wouldn't you expect them to at least be able to say "yes, we've looked at the pitch deck and confirmed that there's nothing materially false that we know of"? And shouldn't the lack of such assurance be an immediate red flag?
Lawyers (of the company) typically don't get involved in reviewing pitch decks for accuracy at least in the early stages. And even if they did, the lawyers only know what the founders tell them. Additionally, lawyers typically avoid asking probing questions of founders. especially if there is risk that the answer they get may be troubling - it's much easier to defend and advise a client when you're not explicitly aware of every dirty secret.
But you're not totally off base. It's absolutely the responsibility of VCs to do their own due diligence. VCs usually are investing other people's money. It's not a good look for VCs to invest in scams, so VCs typically do some degree of due diligence (which could be virtually zero diligence at seed stage / Series A, to quite a lot of diligence at later stages as the amount of money involved increases).
Typically an investment round will involve a rigorous due-diligence process. There will be a data room, and technical, legal, financial, and strategic documentation will be shared with the investor(s). I’d expect regulatory concerns to be top of mind with a biotech startup like this.
I’m not sure what level of coverage is normal, but it’s not unheard of to ask for a written opinion from a legal firm saying “this business model is legally sound”.
In this case it sounds like this was not asked for, and they just took the founders’ word for it.
On the other hand worth noting that “taking their word for it” happens to some degree in almost business deals; after all, past a certain point, outright lies will probably land you in jail (or at least with a massive fine).
It could be a sloppy DD process was run here, or it could be that this sort of thing happens infrequently enough that it’s not worth applying a fine-toothed comb to every single claim.
I have personally done a lot of DD and I will tell you that, while I am aggressive because I assume people are lying to me and maybe themselves, 99% of the time when I’ve done a tandem DD the other technilogists onvolved basically just feign interest and give a gut feel. I’ve also been on the receiving end of DD and witnessed this.
I think you are dramatically overestimating the quality, depth and especially the diligence of that process.
This. One of the more fun things I've done professionally is trying to prepare an after-action report on a deal gone south. Reasonably small deal but 95%+ loss of value. I couldn't even get people to come to a shared baseline factsheet. We've done 10s of deals together, the firm prides itself on openness and is generally relaxed. Even with all the internal memos and external red flag reports in hand, we couldn't get to a shared sense of what happened, let alone if we dropped a ball. Point being: DD is hard even for well-established teams and hindsight is 20/20.
I'm sure e.g. A16Z did a very thorough DD before investing. But, how much time did they invest in following up this company after every year since? Meanwhile, the VC brands were on proud display on the company's website as a mark of trust.
Zac and Jessica would swiftly fire anybody who didn’t validate them. Any counsel they’d hire would have to tell them what they want to hear. They were also comfortable lying, so there’s that too
> Shouldn't we expect long-established and well-respected VCs to do a very heavy due diligince, both initially and continously to ensure something like this doesn't happen? I mean, the VC brands are used as a stamp of approval.
We should expect it but it doesn’t ever happen. SV VCs want hockey stick growth and a profit, be that via going public or selling to a larger company. All else is secondary.
According to Bad Blood by John Carreyrou [0], the initial investors were mostly people that Holmes had cultivated relationships with, and thus it implies that perhaps they were not investing based on technical merit. However, their reputations ended up providing a signal of credibility and legitimacy of Theranos' claims that other investors and media later looked towards, much like a web of trust.
She took a seminar and an Introduction to Chemical Engineering course with Channing Robertson (at the time, the face of Stanford's Chemical Engineering program) and worked in his research lab, and eventually was able to convince him to join the board as an advisor. Then she was able to leverage her family connections to raise money and further lend a sense of legitimacy.
According to Carreyrou:
> She convinced Tim Draper, the father of her childhood friend and former neighbor Jesse Draper, to invest $1 million. The Draper name carried a lot of weight and helped give Elizabeth some credibility: Tim's grandfather had founded Silicon Valley's first venture capital firm in the late 1950s, and Tim's own firm, DFJ, was known for lucrative early investments in companies like the web-based email service Hotmail. Another family connection she tapped for a large investment, the retired corporate turnaround specialist Victor Palmieri, was a longtime friend of her father's. The two had met in the late 1970s during the Carter administration when Chris Holmes worked at the State Department and Palmieri served as its ambassador at large for refugee affairs.
> [...]
> In addition to Draper and Palmieri, she secured investments from an aging venture capitalist named John Bryan and from Stephen L. Feinberg, a real estate and private equity investor who was on the board of Houston's MD Anderson Cancer Center. She also persuaded a fellow Stanford student named Michael Chang, whose family controlled a multibillion-dollar distributor of high-tech devices in Taiwan, to invest. Several members of the extended Holmes family, including Noel Holmes's sister, Elizabeth Dietz, chipped in too.
That's not to say that due diligence was completely ignored. Certain VC firms, like MedVenture Associates, passed on Thernaos when they asked for specifics about her TheraPatch system and how it differed from the one they had commercialized with Abraxis. Apparently Holmes was unable to answer the technical questions asked during their meeting.
Carreyrou later summarizes:
> Channing Robertson, the Stanford engineering professor whose reputation helped give her credibility when she was just a teenager. Then there was Donald L. Lucas, the aging venture capitalist whose backing and connections enabled her to keep raising money. Dr. J and Wade Miquelon at Walgreens and Safeway CEO Steve Burd were next, followed by James Mattis, George Shultz, and Henry Kissinger. David Boies and Rupert Murdoch complete the list
> [...]
> Besides Theranos's supposed scientific accomplishments, what helped win James and Grossman over was its board of directors. In addition to Shultz and Mattis, it now included former secretary of state Henry Kissinger, former secretary of defense William Perry, former Senate Arms Services Committee chairman Sam Nunn, and former navy admiral Gary Roughead. These were men with sterling, larger-than-life reputations who gave Theranos a stamp of legitimacy. The common denominator between all of them was that, like Shultz, they were fellows at the Hoover Institution. After befriending Shultz, Elizabeth had methodically cultivated each one of them and offered them board seats in exchange for grants of stock.
I recommend giving the book a read if you enjoy books about white collar crime.
I can't speak about any specific company, but there are several VCs that specialize in life sciences and medicine and have people with the requisite expertise to evaluate claims on their team (or know the people to talk to in order to get it). The average tech VC might not have a deep bench of life sciences people to validate specific tech with, may not know the experts in the field, and may not know how the industry varies from tech.
I bought one of these and sent in the kit. I never got the results, they said there was a technical glitch IIRC and I needed to do it again, but everything up until that point was really well done. This was probably 2016-2017.
I have no other details, other than I don’t think the alleged crimes committed by them or Theranos are nearly as bad as the ones committed by big pharma and uspto and the rest of the healthcare industry. The whole thing is an f’ing sad joke. So I guess my $200 for the ubiome went down the tube, but what about the $1,800 that HMSA just tried to bill me for going to the doctor for a COVID test last February? How about the 500,000 lives lost to the opioid epidemic? Are any feds investigating USPTO, who was Purdue’s partner in crime? Nah, don’t think so. Let’s go after some small fish in the pond instead.
I blame the 30 something entrepreneurs who grew up in this toxic space a lot less than the 60 year old healthcare execs and government officials who created our f’d up system that we are all suffering from.
If you want to avoid the mistakes of both Theranos, uBiome, and big pharma here's the key strategy: avoid secrecy and #imaginaryProperty at all costs. It puts the patients last and is bad for the world.
I was excited by the Theranos idea. I was excited by the
uBiome idea (and even attempted to be a customer!). But obviously both went poof. I want to know how this could happen. What are the bigger problems in the industry? If you think these 2 are rare examples, I would call them minor compared to many of the companies in the space.
Common factors seem to be: secrecy, and sticking to the old
mindset of #ImaginaryProperty business models (patents,
ndas, copyrights, et cetera).
I want to see the visions espoused by Theranos and uBiome
come to fruition. There are *not* a lot of great examples
of good biotech companies to emulate. AFAIK, there hasn't
been a "don't be evil" moment in biotech.
Some biotech/healthcare company needs to come out and say
"fck the old ways, they aren't working—Americans are not
healthier, costs are up, and we still haven't solved
cancer", and take a radical new approach of openness,
collaboration, and forget about the abosolute horsesht
practices of secrecy, #imaginaryproperty, and putting
patients far down on the list of priorities.
Given the cost of developing a single drug can be in the billions of dollars, what financial incentive is there for companies to spend so much on R&D and clinical development if there is no commercial exclusivity rights at the end of the pipeline? You could nationalise drug development but that is a lot of risk to burden the taxpayer with.
What financial incentive is there for drug companies to ever cure anything when instead they can just develop drugs that alleviate symptoms, which you must then purchase in-perpetuity?
This is the best retort. I'm going to start using this, thanks.
The one I usually go with is "It actually costs $1T to develop a drug. $999B in basic research paid by US taxpayers and $1B in just enough frivolous novelty for the bigpharma company to get a patent racket going".
This reads like the commentary about Manafort's "otherwise blameless life." They failed to send you the results and you say you're out $200 that you paid. What else is there for them to have done "really well"?
I think this could be an instance of the fallacy fallacy. Just because what about arguments are often unwarranted doesn't mean they are in every case. In particular, the health care and pharma industries are driving up the cost of doing business, so it's fair to ask why there's a scandal when a startup accidentally misleads and overcharges, while it's business as usual for Big Medicine?
While cute, this is false. "Argument from fallacy" is the fallacy whereby you assert that the conclusion is false because the reasoning is false. GP doesn't assert that the conclusion is necessarily false, and in fact very specifically qualifies his language to the reasoning. Webster's gives "fallacious" as a synonym for "specious."
The poop-testing startup was outright defrauding its customers and their insurance companies. This is qualitatively and legally different from price gouging/discrimination/inflation for bona fide medical services.
The argument is akin to saying "what about the Sackler family" in response to a criticism of Theranos, as though that somehow vindicates Theranos.
At best, you're suggesting the "everyone's doing it" defense applies in this case. If a cop won't let you out of a speeding ticket because others, too, were speeding, then why should we let the poop-testing startup off the hook because other crimes have also been committed in the same broken system?
Nobody is suggesting that anyone is suggesting that the poop startup is not at fault. Rather, the original suggestion was an interpretation about the relative black-heartedness of bad behavior in the healthcare industry:
> I don’t think the alleged crimes committed by them or Theranos are nearly as bad as the ones committed by big pharma and uspto and the rest of the healthcare industry
This pivot is why, I presume, there was an initial response that touched on whataboutism.
The Theranos lady is yet to face consequences for her fraud and since this is financial fraud, there is every chance she might plead guilty and evade any jail time. In such a scenario there is every possible incentive for copy cats to emerge. She is not the first fraudster but feels like the first one to cheat startup investors at such a large scale.
> Holmes settled the charges by paying a $500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control of Theranos, and being barred from serving as an officer or director of a public company for ten years
Besides her name being synonymous with fraud, these seem like consequences to me. Also, her criminal case hasn't even taken place yet. (Scheduled for Aug 2021)
Aside from the destruction of her career (justified), it is extremely unlikely that she won't face very serious consequences given the mountain of evidence.
It's also strange that you think "consequences" are not meaningful if they do not include jail time. Non-violent offenders spending time in jail is not the mark of a healthy society. Financial punishments, travel restrictions, restitution, community service, probationary requirements, future joblessness - all of these are "real" punishments.
It is absolutely still a deterrent to anyone thinking of "copy-cat" her failure. She will likely not emerge from this with anything other than personal bankruptcy, and ongoing non-disposable restitution.
What is the point of incarceration of non-violent offenders?
Let the legal system work before you lay judgement on it. It is intentionally slow in order to be deliberate and consistent. I don't subscribe to the mob-mentality that non-violent white collar offenders deserve long jail sentences.
Not too surprising. YC’s more successful companies do have a history of skirting (Uber, AirBNB).
When I worked at PagerDuty, some of the less ethical aspects of the company (like the product was initially developed while interns at Amazon) were explained to me with this phrase, verbatim:
“Paul told us to be naughty, but not too naughty.”
I think most people here would agree that working on a side project in your free time using your own resources (Ie, not using your employer’s) is perfectly reasonable and hardly comparable to fraud.
> I think most people here would agree that working on a side project in your free time using your own resources (Ie, not using your employer’s) is perfectly reasonable and hardly comparable to fraud.
It's still probably against your employment agreement, especially if you work at a BigCo where just about anything computer-related could be construed to be in their line of business.
Oh hey I know you, didn’t know you stayed so long. I think of you every time I hear the phrase “fractured fricitive”.
I remember the Amazon thing .. differently. Also some pretty shady marketing tricks, and you know, failing to protect a female employee from a predatory creep at a conference.
Which doesn't say much, since this is (presumably) only the case because Uber didn't offer YC the opportunity to invest, and not because YC wouldn't have been willing to.
This is already a business though? Not high visibility, but there are companies that hire people to take packages on international flights. Of course it’s all above board, everything is declared, duty is paid, etc.
Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination.
Sam Altman of Loopt is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage—hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications.
I believe they took that question off the application in the last few years. Perhaps “rules that matter” versus “rules that do not” turned out to be not so cut and dried.
I had looked at PagerDuty in the Atlanta area because of their use of Elixir, which I would really like to explore and get good at. Is your experience there overall negative?
Back in 2013, the biomedical community was very concerned about how blithely uBiome had decided they didn't need an IRB, despite doing things that were pretty clearly research.
Turns out that was just a herald of things to come.
so Theranos. Having a couple in the leadership is among the worst things for the business. Any chance for even minimum reality check is gone, and instead there is synergetic self-misleadings-amplification and mutually reinforced bubble detached from reality. We had at some point an SVP and a chief architect couple - it was just a twilight, there was completely no way to subject business decisions to technical reality cross-check and vice-verse, and it was a hilarious show how the managers/PMs/directors/etc. were bowing down to that chief architect ...
I though wonder - how and why would one do a scam in poop testing. I mean - why not just collect the poop and test it. Profit! Sprinkle some social on top and you have a fat unicorn.
I mean... they did collect the poop and test it. The fraud was allegedly in double-billing samples, lying to investors about the riskiness of the business and forging the credentials of doctors to get more samples to test.
> Rebekah Victoria Neumann (née Paltrow; born February 26, 1978) is an American entrepreneur and businesswoman. Until September 22, 2019, she served as WeWork's chief brand and impact officer and CEO of WeGrow.
This is interesting because uBiome was at the time described (NYT, blogs, etc.) as a way for citizen-scientists to contribute to the scientific process, submit your poop, contribute to science. Pre-emptively, yes there are (very) many problems with the scientific process as it currently happens, but this is a relativley new class of things "citizen science + private industry" that is definitely going to take some time to smooth out. In part the scientific community is likely somewhat ignorant as to the promises of the startup culture, and I suspect they will definitely become more cautious promoting these types of collaborations as time goes on.
There are competitors to uBiome that are still going (Viome, DayTwo) and are possibly not scams.
I did try uBiome because I dunno, I was bored. It seemed to give legitimate results (not the same thing every time) but the amount of "material" you submit was so small it can't have had much signal in it.
That’s a hard question. Zac and Jessica fired people often and required things be done their way, which a was usually wrong or substandard. The result was that your poop was actually sequenced, but the results weren’t trustable
A comment above indicates two people got identical test result reports with a very long report. This seems unlikely unless either:
- the system made specific predictions with very little data such that two people could get the same prediction and report simply bc they shared a few poop attributes that were key in the prediction (which would imply a very very bad model)
The criminal behavior outlined in the indictment is completely inline with their other behavior. They always cut corners and misrepresented things, it just took a while to do so in a way that violated laws. I think you can look at the Trump White House for an example of a place with a lot of turnover that also had criminal conduct.
Most people were fired for invented reasons or whims. Other people realized how toxic the founders were, and left.
> ... and received funding from Silicon Valley investors like 8VC in San Francisco and Andreessen Horowitz in Menlo Park, which hold 22% and 10% stakes in uBiome
I have nothing against these two VC firms in particular, but I'm wondering if sitting on the board of a fast growing company should also be seen as a responsibility, in this case to realize that uBiome was a fraud.
I saw their 500 startup demoday presntation and thought what a cool idea. Unfortunately, I think a lot of newer startups today have good ideas that don't pan out or convert into sucessfull business -but since they raised money feel obligated to deliver by hook or crook.
Biome testing seems like it could be a real thing, but after this news, I'm honestly not sure. Are there any trusted service providers in this space? (must... refrain... poop joke :-)
Given that Kissinger served on the 'board' of the Nixon administration, he did set a bit of a personal precedent of advising a... Less-than-ethically-unblemished organization.
Here's a hint: if you are starting up ANY company involving any type of biotech or medical application and there are no people with STEM degrees running it or on the board, 90% chance it's fraudulent. STEM smarts is not something you get out of a crackerjack box. And especially NOT with biotech or medical.
Exactly like with Theranos, ANYONE who invested in this and didn't see this coming or do enough due diligence to, simply deserves to be fleeced!! No sympathy.
Similarly, if the company won't validate their tech in peer reviewed journals, they are full of shit. I strongly suspected fraud years before it was acknowledged because Theranos was citing "trade secrets" for why they couldn't release any data about their tech. We don't do trade secrets in medicine or science, and this is precisely why.
The FDA can (and will) audit anything and everything you do for approved drugs/treatments. There are no trade secrets in medicine. This is why companies patent things. You literally can’t hide information about something that’s about to be FDA approved.
As a result, the medical industry is less competitive than other industries. Also, it’s seen as ethically dubious to compete on saving lives. Instead, there’s a lot if in-licensing deals (see above re patents) as opposed to trade secrets.
There are vast amounts of data that you have to disclose to FDA that you are permitted to mark as not for public disclosure. If you ever FOIA records from FDA they are heavily redacted.
You can’t walk into the factory but certainly you can look at a patented drug and get a formula, for example. The Wikipedia article about Sovaldi (sofosbuvir - a Hepatitis C drug) contains the exact chemical formula.
Plus the clinical trial process is extensive. It would be much harder in the present regulatory regime to have a new BS prescription drug than a new BS testing startup, like this one or Theranos. (Old drugs are a little different - some were grandfathered into the current testing regime and evidence for their effectiveness is in some cases limited.)
Certainly there are trade secrets in medicine, but not everywhere.
You are of course allowed to employ SOME obfuscation in research process, but you aren't allowed to shield your product and claims from scrutiny behind them. At the end of the day you have to validate that your product can do what you say it can do publicly through independent analysis, you have to run public trials against existing tech, and you have to explain how your tech works, which Theranos never did. They fought against scrutiny from the greater scientific community from day one; "just trust me it works" is not sufficient proof in science.
This is one reason why we have the patent structure, so people can publicly disclose data for validation purposes and still make a substantial profit.
Plenty of trade secrets in medicine in general (not just US). Parents need to lay out the process, but for some products (biological) the details matter immensely. That’s why even though some biologic drugs went off patent back in 2015 they are only launching the past year or two.
They should've claimed to be AI-powered, then nobody would've called their shit. Things get especially murky with AI, as no one understands it, and it's hard to prove outright fraud. I've seen this firsthand: a YC-backed startup I worked for which advertised an "AI-powered" background check literally was a bunch of if-statements and pseudo-random guesses which didn't even provide the same results for identical inputs.
Don't forget to throw in a bit of machine learning and deep learning. And issue some sort of cryptocurrency while you're at it. That'll really bring in the investors.
Most favourable assumption: They have a policy to remove companies from their network and site that violate certain rules - like fraud.
Least favourable assumption: They are doing damage control with their association. This article does not even mention Y Combinator initially funded them.
I have zero inside information about this but since YC ejects companies that break its ethics code, it's possible that we disowned this company quite a while ago.
Edit: I just checked an internal page that I go to when I need info about a YC startup and it says "Removed", so I think that's what happened, and probably rather early in whatever process led to this outcome.
Wow! That's really interesting. I was typing in some random numbers looking at what other companies were in this directory, how large it went, etc etc, and I hit quite a few of these missing pages. I wonder if all of those companies got ejected for breaking the code of ethics, or if there are other reasons?
I'm afraid I have no idea—I'm pretty far removed from that side of the business—but my guess would be that it's probably more complicated and there are likely a lot of different possible reasons.
YC has funded thousands of startups, so there's inevitably a long tail of weird cases. People tend not to take that into account when assessing particular datapoints.
Investors cannot hear a more shitty news. Must be a really crappy product. Companies like these are a real shit stain in Silicon Valley. I heard the founder was a piece of shit too. Only an asshole can push a half assed product to investors.
Not being from SV (or from the U.S.), I initially read the SF as "science fiction".
I don't know if their (possible) problem is just in money handling or the service, but it would have been kind of funny if the potential fraud had been that the service was all make-believe.
what always fascinates me isn't the people who are in on in but the people who are kind of on the edge. From the Theranos case I remember employees not being allowed to enter rooms, secret chat rooms, people being followed by security etc... like, how can you work for a company like this and have a sort of Twilight Zone or Kafka novel experience for years and just be okay with it?
I have never heard anyone claim the first (Mind you, I don't go out of my way to ask people to say incredibly stupid things), but I have frequently heard the second statement getting misrepresented as the first. [1][2]
And there's also an entire canyon of statements on the spectrum[3] between the two, many of which I have heard.
[1] Mostly by engineers on, ah, this website.
[2] It's rather easy to make such a misrepresentation, just do a direct quote that drops everything after the word 'ads'.
[3] 'People prefer looking at ads[2] over paying', 'People prefer looking at X ads[2] over Y ads', etc, etc, etc.
What practices do you have in mind?
You can’t boil a frog like that.
While employees may have doubt, they can justify their actions by thinking they are doing "their" part correctly. Which, I can relate to.
If I am not doing pseudoscience and am working on tech / systems that are good in my domain, why would I bother about the whole picture? Morally, yes. But if you have loans to pay and a family to take care of, and are getting your salary on time, everything else is the management's fault.
I can get a job in a similar field somewhere else.
And, IMHO, it is the management's fault out and out. The reason they get to take the big cheques is because they bear the responsibility.
It's not the responsibility of the average lower level worker to worry about it.
A combination of compartmentalization and churn can keep the charade up for quite a while, and if executed well you can have a pretty big operation with only one or two people being in on it.
I figured something was off but there's a whole gradial spectrum of Schroedinger's Accomplices where most people can seem to be conners or conned.
For this reason, I found the documentaries on NXIVM (Seduced, The Vow) quite interesting - the way the protagonists are framed and how everyone seems to have plausible deniability even with all the video material.
I disagree with your moral conclusion - we all have responsibility as individuals with regards to what our work contributes to. This goes for anything from military personnel to software engineers. That you don't have legal risk doesn't mean you don't have ethical responsibility.
Does that really work in the real world? When you don't have workplace rights and concepts like "at will employment", can you really expect the individual to have any sympathy towards the company or society?
If you and your job is as expendable as a tissue and you struggle your whole life to get one, be in one and earn the almighty dollar, where the lack of the dollar means your kids go hungry and cold, would you place higher priority on morals for "the greater good"?
Those who are made to do un-ethical things in companies are usually picked because they have no other way than to be in the job, or are greedy enough to put their morals behind them.
Good luck trying to force morality on either of them.
I think you conflate these two things somewhat:
Of course there are always extreme situations when people are left with tough decisions and have to choose between "doing the right thing" and sustaining themselves and their family.
Separately, there are egotistic people who will disregard the consequences of their actions on others. For those who only care about themselves, it is hard to change things without changing incentive structures.
Finally, some are just ignorant because they don't know or didn't think it through deeply.
Neither of these are justifications to look the other way for those who can find employment either way and are choosing between an $80k job and a $200k job.
To some extent, companies like Theranos succumb to the greed and vanity of its founders.
Sure, the idea is revolutionary, but when the time comes where you realize you have a lemon, it ought to be shut down, or pivoted.
The following is probably just an already completely debunked conspiracy theory with zero basis in fact but what you describe is precisely how special compartmentalized intelligence works. Maybe many of the corporate and government organizations in security and intelligence operate in this siloed way, possibly at the risk of a lack of oversight and accountability which helps any abuses go unaddressed. Official secrecy oaths and classification perhaps compounds this vulnerability to misuse.
And except for the public heads very occasionally rolling, it's likely nobody takes responsibility (in a justice sense) when abuses occur. How do you get people to carry our these things? Simple finance, and isolation could be one way as mentioned. Coercive control via blackmail, planting evidence, fake accusations or intimidation could be other effective methods, especially when you need to secure the cooperation of key people outside the organization, and especially when your daily work involves intelligence collection and deception.
If it occurs at a deep level under the security and compartmentalization shields, then it's unlikely checks and balances could correct it if this sort of corruption was occurring.
When you read about iphone development Apple isn't that different. Only Jobs and a few other people knew the whole picture. The rest worked on their little area while not seeing the whole product.
Which is what Madoff did, I believe.
This is providing employees only as much information as needed to do their job. Apple, for instance, seems to do this. So it might not ring any alarm bells with the employee.
I was there at the beginning, then you start to see it. The closed founder meetings, no more team meetings. The hushed conversations at lunch. The rumor mill started to circle - VC money running out. The CEO blew all the money on coke and hookers. Nobody wants to answer basic questions like why the rollout of the new product is taking weeks and weeks to get going.
People KNOW what's going on, but nobody wants to jump off the ship, only to find out the company figures it out and all your co-workers are now millionaires and you're back at some other startup busting your ass for some unknown future.
People hang on, believing its going to happen, then you show up one day and the office is dark, the cop outside says you're not working today or tomorrow or ever really and you should go home. You hold out hope the company can pull out the nosedive, and when it doesn't, you have to go through the five stages of bereavement until you accept that it was really doomed from the start and you should have seen it but didn't want to believe this company was really just a complete façade to fleece money from some big VC firm.
https://abcaudio.com/podcasts/the-dropout/
One can only wonder!
I.e, I imagine a lot of Apple corporate culture has similar restrictions, yet as far as we know, they're not committing fraud like that.
Theranos, by contrast, did not have anything functioning. Ubiome seeks not to have either though I admit it is less clear a case without expertise.
Even if you work there and have a bad feeling you are probably doubting yourself quickly when you read that you are actually working for the hottest company in SV.
Unless your work interfaces with what happens in those silos, you generally don't have any idea about what's going on in the Android Hardware Testing building, or the garage out of which Project Loon ran before it was shut down.
It's a lot stranger in a small start-up.
I just can’t figure if 90%, or 99%?
Every profession, and every job, people look the other way on truth, and moral issues.
I usually have more respect for the criminal who admits he steals, and cheats, for a living.
https://www.gao.gov/assets/gao-11-26.pdf#page56
https://reclaimthenet.org/silicon-valley-hib-visas-instituti...
That's why you have to empower new hires to question your methods: someone from outside will see what is not normal, if you dismiss them you may be missing opportunities to right things before you crash.
Realistically, the best and brightest left early and it's the people afraid of losing their jobs that feel compelled to shut up and toe the line.
If it was that obvious then we wouldn't even have interviews.
Everybody I know in tech that's any good has no problem finding a new job on short notice, including people with less than one year of experience.
You're not a "slave". You're extremely well paid with in-demand skills, and you could do something else with them. If you keep doing this, you're no better than the tobacco merchants.
This potentially is another argument for laws / regulation.
Regulation is required in such cases. It's unrealistic to expect otherwise.
> no better than the tobacco merchants
Prior to a certain time, tobacco producers honestly had no idea how harmful their product was. Once they found out, they actively tried to hide that fact from everyone. I don't much like adtech, but unlike tobacco it doesn't cause direct physical harm to the individual. They're also pretty up front about the fact that they try to track you.
I often feel guilty for not being as altuistic as I'd like, but at least I know I'm not using my skills to do something that a net negative for humanity.
“Hun, I think its time to be realistic and provide for us”
But people on the internet said every unideal thing at work means I should get a new job
I guess from the inside it's not always so clear to the little guy what's normal company weirdness and what's fraudulent. Although higher up execs should know.
Most corporate work is like this. Secrets everywhere, managers acting like they have stuff to hide, actual crimes happening off-camera (and sometimes on-camera). If you spend a year or so working in such an environment it just doesn't really raise your eyebrows unless something really extreme happens. Anything below acute grievous bodily harm is background noise.
Are you saying that you had the exact same list of bacteria and % of each?
Test are not identical. I have a collection of hundreds of different results group by a few medical conditions I was researching.
The data is extremely detailed and changes to diet reflect changes to samples.
Can you verify that they changed in ways that corresponded with your diet? It's possible if they were exceptionally lazy that they just generated a new report for each date haha.
My favourite blogger was a women who's sport involved falling into the dirt and eating it often as a result. Her bacteria profile was mostly a bacteria type found in dirt.
The field is open for a better managed company to take on these challeges.
If so I suspect most people can see there is a gulf of difference between offering a service on a website and saying its currently unavailable when people hit 'buy' vs "securities fraud, conspiracy to commit health care fraud and money laundering."
It's common in the industry in general to sell software you haven't built yet. Even IBM did it with Watson Health.
That said, it told me my composition was like that of an East African, which I am not. That wouldn’t surprise me as I have gut issues. My big hope for the next 30 years is we meaningfully crack the nut on microbiomes and can bring the next major evolution in medicine to a reality. We need these kinds of companies as a step 1.
Considering how questionable Goop is that the fraud seems about right.
In the meantime the whole medical start up where they suddenly can test, for cheaper, better, etc seems to regularly come up short on the actual testing, results, or even just valid use cases.
Much like Theranos nobody ever seems to explain how these kind of companies can just suddenly test for more so easily where the existing medical industry just hasn't been able to.
Of all the things that the start up ... "system" can do well I kinda question their ability to suddenly become amazing complex medical device inventors / scientists. I recall some folks who work in that industry and they noted that creating new tests and diagnostics and equipment is often incredibly slow and iterative. That doesn't seem very start up-ish. The magical breakthroughs are rare.
This sort of tech hubris is all over the tech ecosystem. Folks who believe their startup prowess means they can tackle any medical device with fake-it-till-you-make-it or fail-fast-break-often mentality that often fails in reality.
[0]https://www.hup.harvard.edu/catalog.php?isbn=9780674089044
Not true for all startups, but increasingly common among the moonshot ones.
It was 'run' by the local university, but really was just a package deal they bought from another company.
I gave the university some feedback that they have all the resources at the university to do WAY better than these commercial bootcamps... but the folks involved bought the package deal and are invested in it.
It's sad, the university IMO could do better, if they tried.
Meanwhile the traditional unversity system does work, but is a huge time investment, and the bootcamp system works 'kinda' for some folks ... but fails most IMO.
[0] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
[1] https://www.wired.com/insights/2014/12/understanding-the-inn...
The Facebook widget I wrote was better than being on Facebook and it still fills me with irritation to this day they shitcanned it :-)
They did not break the traditional learning way, but they help a LOT of people, me included, to learn new things.
Could I learn them otherwise, from books and web pages? Sure, but MOOCs help. Did I already attend a university before, so I can guess what MOOC is good and which one is BS? Sure. Are they much less effective than traditional university? Yes. Of course.
But, they are not useless and I am glad they exist, even when they were a bit overhyped in the past.
It was kinda terrifying the idea that we'd run through COVID with hordes of people hooked up to equipment someone came up with by dorking with a 3D printer and some old parts from a vacuum...
It was telling when you didn't see established ventilator makers coming up with their own ad hoc cheap-o designs... much like you didn't see Theranos's competitors make wild claims of their own similar device ... probably for reasons.
I get the point : it's a scary proposition to have 'hacked' solutions to life-and-death medical struggles that have not yet had the time to be properly vetted for errors or bugs..
BUT
1) Most invention came about the same way, with a rough idea of the goal while attempting to use off-the-shelf/available techniques to attain it.
2) The COVID-19 pandemic was out-of-the-ordinary. If truly worst had come to the worst and there was a total break-down of society and medical care, things like 3d printers and old vacuum parts could have been appropriately re-engineered into appropriate medical care devices by those with the professional know-how to do so.
In other words : even if a "3d printed ventilator", for the sake of argument, is a somewhat hazardous idea in the hands of non-professionals, in the event of cataclysmic world-collapse i'd rather there be , even if simple and preliminary, a mediocre set of tools available for professionals to continue their work where possible.
In my opinion the benefit of these designs being available outweighs the disadvantage that Joe-Bob down the road may try to practice self-tracheostomy procedures.
>It was telling when you didn't see established ventilator makers coming up with their own ad hoc cheap-o designs...
the only thing that tells me is that the profit margins weren't 'right enough' to interest large corporate backers into helping -- especially during a time of economic recess and beginning of thrift strategies from the worlds' corporations in expectation of economic problems down the line until the pandemic is over.
The British NHS pay Mercedes F1 for 10,000 units of some whizz-bang CPAP machine during the pandemic.[0] CPAP machines certainly aren't ventilators, but Mercedes F1 certainly isn't an established ventilator maker, either.
https://www.motorsportweek.com/2020/05/08/mercedes-designed-...
"But something is better than nothing" isn't actually true in a lot of medical situations.
People prefer to believe positive news.
The plan required nearly every single smartphone owner in the country to voluntarily use the tracing app, and keep their phone on them at all times in any public setting. Short of that, the results weren't actionable. If the results aren't actionable, people won't opt-in, and the results will be even less actionable.
...and oh yeah it fails in vehicle traffic, or any scenario where people are on the other side of a piece of glass or wall. Hello false flags.
These flaws were obvious before any company wrote a single line of code. It was silicon valley hubris, and a textbook example of a hammer seeing everything as a nail. It predictably failed, and did nothing but distract from actual efforts.
But the worst part is that now all of our smartphones have this insidious BT tracing technology built into the operating system. I am sure Google and FB would LOVE to know all the people we're near, in real time. This technology, brought about under the absurd false pretense of trying to help covid, is here to stay, baked right into the operating system.
In my recollection, it was far less Silicon Valley CEOs, and more open-source hardware enthusiasts crowdsourcing 3D printer designs. Some of them looked as if they could potentially work, but, of course, it also seemed potentially an incredible amount of hubris.
Nobody really got a chance to put any new ventilators to the test.
As wary as I am of the situation, we never really saw anyone given a chance to see what those ventilator inventors would have been able to do.
> "Yaron Oren-Pines, who is listed as CEO 0f InCommon in San Jose on both Twitter and LinkedIn, responded to a tweet sent by President Donald Trump on March 27 calling for General Motors and Ford to immediately begin making ventilators. Oren-Pines responded to the president's tweet, saying, "We can supply ICU Ventilators, invasive and non-invasive. Have someone call me URGENT." Oren-Pines has not tweeted since.
Three days later, according to BuzzFeed, New York apparently paid Oren-Pines $69,102,000 for 1,450 ventilators, or $47,656 per ventilator. It was the second-largest purchase made by the state of New York for coronavirus-related medical supplies, according to an analysis by the Albany Times-Union.
To date, New York has received no ventilators from Oren-Pines.
A state official, speaking on condition of anonymity, told BuzzFeed that New York made the deal with Oren-Pines on the recommendation of the White House coronavirus task force. The state has since ended the contract, and is attempting to recover the money."
* https://www.sfgate.com/news/editorspicks/article/NY-paid-Bay...
* https://www.msn.com/en-us/news/us/silicon-valley-engineer-tw...
And there's more Silicon Valley Tech CEO medical device wanna-be pretenders:
* https://abc7.com/california-coronavirus-cases-ventilators-me...
And here's ya boy Elon Musk faking-it and never making-it:
* https://www.sacbee.com/opinion/editorials/article241982586.h...
* https://www.politico.com/states/california/story/2020/04/16/...
This is either sheer incompetence or brazen corruption.
In my experience, it's usually the former, but I'm having trouble believing that this one isn't the latter.
Everything about the White House coronavirus task force has screamed "corruption" the whole way down.
From this article [1], one of several such investigations:
> Many of the volunteers were told to prioritize tips from political allies and associates of President Trump, tracked on a spreadsheet called “V.I.P. Update,”
> Few of the leads, V.I.P. or otherwise, panned out, according to a whistle-blower memo written by one volunteer and sent to the House Oversight Committee.
> ...personal relationships and loyalty are often prized over governmental expertise, and private interests are granted extraordinary access and deference.
1. https://www.nytimes.com/2020/05/05/us/jared-kushner-fema-cor...
* https://www.sacbee.com/opinion/editorials/article241982586.h...
* https://www.politico.com/states/california/story/2020/04/16/...
He delivered CPAP machines that weren't even of the right type for COVID ventilator use.
> The apparent slight prompted Musk — one of numerous Silicon Valley entrepreneurs with whom the governor has a long-standing relationship — to lash out at the media and implore Newsom in a tweet to “please fix this misunderstanding.” Musk shared screenshots that appeared to show a hospital executive and a Los Angeles County health department official confirming they’d received medical equipment.
> When asked Thursday about the discrepancy, Newsom said he had not yet seen the information Musk shared on Twitter.
> “I was not personally aware of that list,” Newsom said, adding that “I look forward to learning more about where they went and I’m grateful for his support.”
> Later Thursday, Los Angeles County Department of Health Services Director Christina Ghaly said in an emailed statement that Tesla had provided 100 bilevel positive airway pressure units in March — devices that can reduce “the need for certain patients to be placed on mechanical ventilation,” Ghaly said. The company also provided 200 gallons of hand sanitizer and 860 face shields.
The "innovation" in the medical start-up space would be "indemnification".
Take a startup that has real results and fund them through FDA approval and backstop them when they get sued because the device isn't 100% (no device ever is).
I had a long talk at CES about 5 years ago with a doctor who created an asthma monitoring device for his daughter that would notify him and the school nurse when his daughter had an attack. I guarantee that device worked pretty damn well due to self-interest.
He couldn't get anybody to touch it. Everybody knew that you were going to get sued the moment some child died and a message didn't get delivered. Nobody would indemnify him even if he somehow managed to get through full FDA approval.
Want innovation in bio? Backstop the little people who have real devices and real results rather than funding well-connected, turtleneck-clad marketing charlatans.
That's because medical testing is hard, more testing doesn't always lead to better treatment, and the people who have devised existing testing processes weren't so stupid that a 20-year old with no background in medicine can just come in and upend the entire system on their first try.
You end up trying to build a startup to solve a decades-old-problem that already has reasonably-good-solutions, in a field where R&D takes decades, costs hundreds of millions of dollars, and where you will have to figure out an in into an established old-boys-network in order to actually sell your product, if you get it built. All in an industry that's both cost sensitive, and highly cost-insensitive at the same time.
If you actually think <some modern medical procedure> is overpriced, and wasteful, it would probably be good for you to work a few years on optimizing an existing lab's processes, before you jump straight from college into trying to optimize a novel process that hasn't even been invented yet.
Well, kind of except Radvac:
https://radvac.org/vaccine/
https://www.thecrimson.com/article/2020/10/8/radvac-scrut/
But if you had the choice between radvac and Pfizer or AZ, which would you take?
I remember seeing Holmes in that Job’s get up, and knew something didn’t smell right, but was embarrassed to even bring it up——knowing their would be the backlash.
Looking back I don’t think I have ever met a truthful wealthy person? They seemed to make their wad on lies?
Investors don't do enough due diligence and trust their own gut too much.
[0] https://www.sec.gov/news/press-release/2020-162
[1] https://www.forbes.com/sites/davidjeans/2020/10/29/fraud-sof...
[2] https://www.justice.gov/usao-edva/pr/california-business-man...
[3] https://www.msn.com/en-us/money/companies/lordstown-motors-a...
[4] https://www.justice.gov/usao-mdal/pr/founder-lee-county-base...
[5] https://abcnews.go.com/US/wireStory/sentencing-set-alabama-m...
A noteworthy (and mostly overlooked) distinction.
" A shareholder lawsuit was filed Thursday against an electric truck startup company claiming it has defrauded investors by making spurious claims about the number of preordered trucks and the progress it has made in starting production " https://www.marketwatch.com/story/lordstown-motors-accused-o...
"The Hindenburg report said a recently announced $735 million deal for 14,000 trucks was to a purported buyer who doesn’t operate a vehicle fleet and is based out of a small apartment building in Texas.
The company received unwelcome publicity in January when a prototype vehicle caught fire 10 minutes into its initial test drive."
Smelling increasingly like fraud.
Byton also seemed like vaporwesr for a long time.
This is quite true. I'd actually estimate it north of 50% given my discussions with various people over the years.
I would argue that its probably better than this in the "bootstrapped" arena rather than the VC-funded arena. VC lottery tickets seem to attract fraudsters like flies.
> Investors don't do enough due diligence and trust their own gut too much.
This is probably true, but one of the real problems is that serial fraudsters really don't get punished. In addition, the bottom-feeding lawyers that enable them also don't get punished.
A successful lawsuit against one of these fraudsters will cost you at least a megabuck. It's almost always more cost-effective to walk away with whatever payment you can threaten out of them than to actually file a lawsuit.
He was absolutely the last person I would expect to be caught up in something like this, and when the news first broke a few years ago, I reached out as an act of support, not looking to find out what happened, or anything, just thinking to myself....how did this happen, this isn't the Zach I know, maybe he needs someone to talk to.
The lesson in this I think isn't to just pile on about how SV is full of frauds, and pile on with a bunch of hate, but rather to understand that there is a slippery slope, and people get caught on the wrong side of it. Make sure that doesn't happen to you.
It further strikes close to home because I'm the founder of a sleep-tech company (https://soundmind.co), an industry full of snake-oil and BS. We're extremely conscious of this view of the industry, and call it out where we can.
I've also seen many start-up pitches where the numbers thrown around are absolute BS, companies that I know aren't doing well, and the founders yell about the million dollar deals they have.
It's the one thing I hate about this industry, but the gong continues to bang on about growth, growth, growth and the numbers you need to hit.
Many, many founders take the easy way out, but, to quote Ryan Holiday, The Obstacle Is The Way.
Any suggestions on how we fight this general rah-rah-BS attitude in the industry?
As someone who's interested in quantified self, etc. -- this kind of landing page is exactly what makes me think "bullshit" (and yes, in particular for Soundmind, I've clicked on it few months ago and left quickly). This is a kind of thing I hate about QS startups, I'll elaborate:
Literally the first thing it does is asking me for my email (seriously, who subscribes the first moment they get on the website?). Shiny, takes ages to scroll with useless background images and little actual information. I'd much more trust a simple single-page site which gets straight to the point -- maybe then you can convince me to subscribe.
We're not gathering the emails so we can spam people, we're figuring out where we can reach potential customers, who these people are, and will be sending them question aires to fit them into our trials, and later on the waistlist.
We took a page right out of superhuman, and as far as getting people interested, it's working well enough.
Btw, we're not a QS startup, we're a sleep tech.
When we've got product and people using it, we'll update the website, and perhaps it will be more to your taste then. But at the moment, 5% of people who visit the site are signing up, so apparently we are striking the right nerve with some people.
We start actually punishing white collar crime. Kids are growing up learning there are no downsides to white collar crime - whether you're Elizabeth Holmes or Jordan Belfort, even if you get caught red handed stealing BILLIONS nothing happens.
When there's A LOT of cash flowing around, you're bound to get some fortune seekers here and there.
And it is in the nature of SV to invest early on in companies and industry which might be worth billions 5-10-15 years down the road, even if the concepts are far fetched.
Tbh, I think some investors are more than willing to suspend their disbelief, whether it is the tech itself, or the initial business models. If enough people hop on the band-wagon, and you're the early bird out - you could still make money on something wildly unfeasible idea.
In any case, that kind of culture and environment will surely attract certain people. Or transform people.
Maybe flipping the criteria used for evaluating investments. Instead of having founders give pitches and get evaluated on their confidence and charisma (and made-up numbers), find the most unassuming, drab, dull, but brilliant geniuses and convince them to take a lot of money in exchange for building what they would build anyway? Less Jobs, more Woz.
Total scam from start to finish. Throw the book at them.
That's not how it works. The probiotic you took was full of bacteria DNA (maybe, probiotics rarely hold up to their advertised claims) which had to make it through your stomach, several meters of small bowel, and then to your large bowel. The DNA in that probiotic was likely snipped apart so many times its just in the noise at this point.
Fun fact: your small bowel and large bowel have significantly different biomes. Your small bowel has more in common with mouse stool than it it doesnt with your small bowel!
Shouldn't we expect long-established and well-respected VCs to do a very heavy due diligence, both initially and perhaps even more importantly continously to ensure something like this doesn't happen? Especially in the health field. I mean, the VC brands are used as a stamp of approval.
They are not really focused on the details of your business, especially if it sounds right to some PhD that works for them as a technical expert.
For example, you can pitch to multiple VCs and now they can either start a bidding war (because you either lie or tell the truth of your existing offers, and they do not communicate with each other) or they can communicate together and get a discount because you're not playing the information sharing game.
The dynamics of raising money are not really fair or focused much on what you're doing.
Still: I kind of think that especially in the health area, there's a pretty large risk of e.g. the Andreessen Horowitz brand being tainted. It should be in their self-interest to protect themselves against this in the future, by applying more continous due diligence.
This might be a naive question, but... Shouldn't the lawyers have been involved in the investment rounds somehow? I get that there's attorney-client confidentiality and all, but wouldn't you expect them to at least be able to say "yes, we've looked at the pitch deck and confirmed that there's nothing materially false that we know of"? And shouldn't the lack of such assurance be an immediate red flag?
But you're not totally off base. It's absolutely the responsibility of VCs to do their own due diligence. VCs usually are investing other people's money. It's not a good look for VCs to invest in scams, so VCs typically do some degree of due diligence (which could be virtually zero diligence at seed stage / Series A, to quite a lot of diligence at later stages as the amount of money involved increases).
I’m not sure what level of coverage is normal, but it’s not unheard of to ask for a written opinion from a legal firm saying “this business model is legally sound”.
In this case it sounds like this was not asked for, and they just took the founders’ word for it.
On the other hand worth noting that “taking their word for it” happens to some degree in almost business deals; after all, past a certain point, outright lies will probably land you in jail (or at least with a massive fine).
It could be a sloppy DD process was run here, or it could be that this sort of thing happens infrequently enough that it’s not worth applying a fine-toothed comb to every single claim.
I think you are dramatically overestimating the quality, depth and especially the diligence of that process.
You must be new here.. shrug
I don't remember any mainstream media reports talking about which VCs where early/heavy investors in Theranos though. :/
She took a seminar and an Introduction to Chemical Engineering course with Channing Robertson (at the time, the face of Stanford's Chemical Engineering program) and worked in his research lab, and eventually was able to convince him to join the board as an advisor. Then she was able to leverage her family connections to raise money and further lend a sense of legitimacy.
According to Carreyrou:
> She convinced Tim Draper, the father of her childhood friend and former neighbor Jesse Draper, to invest $1 million. The Draper name carried a lot of weight and helped give Elizabeth some credibility: Tim's grandfather had founded Silicon Valley's first venture capital firm in the late 1950s, and Tim's own firm, DFJ, was known for lucrative early investments in companies like the web-based email service Hotmail. Another family connection she tapped for a large investment, the retired corporate turnaround specialist Victor Palmieri, was a longtime friend of her father's. The two had met in the late 1970s during the Carter administration when Chris Holmes worked at the State Department and Palmieri served as its ambassador at large for refugee affairs.
> [...]
> In addition to Draper and Palmieri, she secured investments from an aging venture capitalist named John Bryan and from Stephen L. Feinberg, a real estate and private equity investor who was on the board of Houston's MD Anderson Cancer Center. She also persuaded a fellow Stanford student named Michael Chang, whose family controlled a multibillion-dollar distributor of high-tech devices in Taiwan, to invest. Several members of the extended Holmes family, including Noel Holmes's sister, Elizabeth Dietz, chipped in too.
That's not to say that due diligence was completely ignored. Certain VC firms, like MedVenture Associates, passed on Thernaos when they asked for specifics about her TheraPatch system and how it differed from the one they had commercialized with Abraxis. Apparently Holmes was unable to answer the technical questions asked during their meeting.
Carreyrou later summarizes:
> Channing Robertson, the Stanford engineering professor whose reputation helped give her credibility when she was just a teenager. Then there was Donald L. Lucas, the aging venture capitalist whose backing and connections enabled her to keep raising money. Dr. J and Wade Miquelon at Walgreens and Safeway CEO Steve Burd were next, followed by James Mattis, George Shultz, and Henry Kissinger. David Boies and Rupert Murdoch complete the list
> [...]
> Besides Theranos's supposed scientific accomplishments, what helped win James and Grossman over was its board of directors. In addition to Shultz and Mattis, it now included former secretary of state Henry Kissinger, former secretary of defense William Perry, former Senate Arms Services Committee chairman Sam Nunn, and former navy admiral Gary Roughead. These were men with sterling, larger-than-life reputations who gave Theranos a stamp of legitimacy. The common denominator between all of them was that, like Shultz, they were fellows at the Hoover Institution. After befriending Shultz, Elizabeth had methodically cultivated each one of them and offered them board seats in exchange for grants of stock.
I recommend giving the book a read if you enjoy books about white collar crime.
[0] https://www.goodreads.com/book/show/37976541-bad-blood
I have no other details, other than I don’t think the alleged crimes committed by them or Theranos are nearly as bad as the ones committed by big pharma and uspto and the rest of the healthcare industry. The whole thing is an f’ing sad joke. So I guess my $200 for the ubiome went down the tube, but what about the $1,800 that HMSA just tried to bill me for going to the doctor for a COVID test last February? How about the 500,000 lives lost to the opioid epidemic? Are any feds investigating USPTO, who was Purdue’s partner in crime? Nah, don’t think so. Let’s go after some small fish in the pond instead.
I blame the 30 something entrepreneurs who grew up in this toxic space a lot less than the 60 year old healthcare execs and government officials who created our f’d up system that we are all suffering from.
If you want to avoid the mistakes of both Theranos, uBiome, and big pharma here's the key strategy: avoid secrecy and #imaginaryProperty at all costs. It puts the patients last and is bad for the world.
Common factors seem to be: secrecy, and sticking to the old mindset of #ImaginaryProperty business models (patents, ndas, copyrights, et cetera).
I want to see the visions espoused by Theranos and uBiome come to fruition. There are *not* a lot of great examples of good biotech companies to emulate. AFAIK, there hasn't been a "don't be evil" moment in biotech.
Some biotech/healthcare company needs to come out and say "fck the old ways, they aren't working—Americans are not healthier, costs are up, and we still haven't solved cancer", and take a radical new approach of openness, collaboration, and forget about the abosolute horsesht practices of secrecy, #imaginaryproperty, and putting patients far down on the list of priorities.
“Haven't solved cancer”? Come on man!
The one I usually go with is "It actually costs $1T to develop a drug. $999B in basic research paid by US taxpayers and $1B in just enough frivolous novelty for the bigpharma company to get a patent racket going".
https://effectiviology.com/fallacy-fallacy/
Just because it's a tactic used by shills doesn't mean whenever the point is made it's shilling / irrelevant.
Sometimes it's actually worthwhile to point out when an instance of behavior is actually part of a much larger, much bigger problem.
The argument is akin to saying "what about the Sackler family" in response to a criticism of Theranos, as though that somehow vindicates Theranos.
At best, you're suggesting the "everyone's doing it" defense applies in this case. If a cop won't let you out of a speeding ticket because others, too, were speeding, then why should we let the poop-testing startup off the hook because other crimes have also been committed in the same broken system?
> I don’t think the alleged crimes committed by them or Theranos are nearly as bad as the ones committed by big pharma and uspto and the rest of the healthcare industry
This pivot is why, I presume, there was an initial response that touched on whataboutism.
Besides her name being synonymous with fraud, these seem like consequences to me. Also, her criminal case hasn't even taken place yet. (Scheduled for Aug 2021)
So technically Theranos Pt. 2 is still on the cards for her.
Aside from the destruction of her career (justified), it is extremely unlikely that she won't face very serious consequences given the mountain of evidence.
It's also strange that you think "consequences" are not meaningful if they do not include jail time. Non-violent offenders spending time in jail is not the mark of a healthy society. Financial punishments, travel restrictions, restitution, community service, probationary requirements, future joblessness - all of these are "real" punishments.
It is absolutely still a deterrent to anyone thinking of "copy-cat" her failure. She will likely not emerge from this with anything other than personal bankruptcy, and ongoing non-disposable restitution.
What is the point of incarceration of non-violent offenders?
Let the legal system work before you lay judgement on it. It is intentionally slow in order to be deliberate and consistent. I don't subscribe to the mob-mentality that non-violent white collar offenders deserve long jail sentences.
[0]: https://www.youtube.com/watch?v=DJklHwoYgBQ
https://www.ycombinator.com/companies/718 (404)
https://blog.ycombinator.com/ubiome-yc-s14-raises-4-dollars-...
They’re not angels (pun intended)
When I worked at PagerDuty, some of the less ethical aspects of the company (like the product was initially developed while interns at Amazon) were explained to me with this phrase, verbatim:
“Paul told us to be naughty, but not too naughty.”
(Disclaimer: happy PD employee from 2011-2015)
It's still probably against your employment agreement, especially if you work at a BigCo where just about anything computer-related could be construed to be in their line of business.
I remember the Amazon thing .. differently. Also some pretty shady marketing tricks, and you know, failing to protect a female employee from a predatory creep at a conference.
4. Naughtiness
Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter. This quality may be redundant though; it may be implied by imagination.
Sam Altman of Loopt is one of the most successful alumni, so we asked him what question we could put on the Y Combinator application that would help us discover more people like him. He said to ask about a time when they'd hacked something to their advantage—hacked in the sense of beating the system, not breaking into computers. It has become one of the questions we pay most attention to when judging applications.
I believe they took that question off the application in the last few years. Perhaps “rules that matter” versus “rules that do not” turned out to be not so cut and dried.
My experiences there taught me that no good deed goes unpunished. I dropped out of the startup world and become a “fuck you, pay me” consultant.
"In a parallel action, the U.S. Attorney's Office for the Northern District of California today announced criminal charges against Richman and Apte."
Press release from U.S. Attorney’s Office: https://www.justice.gov/usao-ndca/pr/ubiome-co-founders-char...
Criminal indictment: https://www.justice.gov/usao-ndca/press-release/file/1377481...
Turns out that was just a herald of things to come.
so Theranos. Having a couple in the leadership is among the worst things for the business. Any chance for even minimum reality check is gone, and instead there is synergetic self-misleadings-amplification and mutually reinforced bubble detached from reality. We had at some point an SVP and a chief architect couple - it was just a twilight, there was completely no way to subject business decisions to technical reality cross-check and vice-verse, and it was a hilarious show how the managers/PMs/directors/etc. were bowing down to that chief architect ...
I though wonder - how and why would one do a scam in poop testing. I mean - why not just collect the poop and test it. Profit! Sprinkle some social on top and you have a fat unicorn.
> Rebekah Victoria Neumann (née Paltrow; born February 26, 1978) is an American entrepreneur and businesswoman. Until September 22, 2019, she served as WeWork's chief brand and impact officer and CEO of WeGrow.
I did try uBiome because I dunno, I was bored. It seemed to give legitimate results (not the same thing every time) but the amount of "material" you submit was so small it can't have had much signal in it.
- the system made specific predictions with very little data such that two people could get the same prediction and report simply bc they shared a few poop attributes that were key in the prediction (which would imply a very very bad model)
Or
- the reports were fake
Can you speak to this?
Most people were fired for invented reasons or whims. Other people realized how toxic the founders were, and left.
https://www.youtube.com/watch?v=BI1mqXmoBcM
I have nothing against these two VC firms in particular, but I'm wondering if sitting on the board of a fast growing company should also be seen as a responsibility, in this case to realize that uBiome was a fraud.
"Wait, no, it's just like Theranos"
The fact that Kissinger was on Theranos’ board blows my mind every time I remember it.
Exactly like with Theranos, ANYONE who invested in this and didn't see this coming or do enough due diligence to, simply deserves to be fleeced!! No sympathy.
This was a science company founded and run by scientists with little-to-no private sector experience.
As a result, the medical industry is less competitive than other industries. Also, it’s seen as ethically dubious to compete on saving lives. Instead, there’s a lot if in-licensing deals (see above re patents) as opposed to trade secrets.
Plus the clinical trial process is extensive. It would be much harder in the present regulatory regime to have a new BS prescription drug than a new BS testing startup, like this one or Theranos. (Old drugs are a little different - some were grandfathered into the current testing regime and evidence for their effectiveness is in some cases limited.)
Certainly there are trade secrets in medicine, but not everywhere.
This is one reason why we have the patent structure, so people can publicly disclose data for validation purposes and still make a substantial profit.
/s
https://www.ycombinator.com/companies/718
Archived version: https://archive.is/cbIIT
Least favourable assumption: They are doing damage control with their association. This article does not even mention Y Combinator initially funded them.
Edit: I just checked an internal page that I go to when I need info about a YC startup and it says "Removed", so I think that's what happened, and probably rather early in whatever process led to this outcome.
YC has funded thousands of startups, so there's inevitably a long tail of weird cases. People tend not to take that into account when assessing particular datapoints.
Can we get a new category for "Fraud" under ycombinator.com/companies?
Hmmm...
I believe there's a joke in all of this...
Something having to do with that old expression about when "something" hits the fan...
I don't know if their (possible) problem is just in money handling or the service, but it would have been kind of funny if the potential fraud had been that the service was all make-believe.