On Faking It

It is a long weekend in the United States, and like everyone else, I want to take advantage of the good weather and catch up on my long reading list of papers, articles, and books. So, I will keep this weekend’s newsletter short and sweet.

Photo courtesy of HBO

Last night, I watched The Inventor, an HBO documentary about Theranos and its founder, Elizabeth Holmes. It’s a version of the story that was so brilliantly reported by John Carreyrou in his book, Bad Blood: Secrets and Lies in a Silicon Valley Startup.

In the retelling, the documentary invokes Thomas Edison, who used a series of lies and half-truths after making a claim that he had solved the incandescent light bulb problem. It would be four years before he could deliver a working bulb, but he faked it till he made it.

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SEC vs Theranos & what it means for Silicon Valley

Securities and Exchange Commission (SEC) filed a lawsuit against Theranos, CEO Elizabeth Holmes and company President Ramesh Balwani accusing them of massive fraud. Holmes has settled the lawsuit and has been stripped of her position as the CEO. As part of the settlement, she will pay $500,000 in penalties and won’t be allowed to serve as an officer or director of a private company. It is quite a comedown for an entrepreneur who often graced the covers of business magazines and was a constant presence at the posh conferences. She also convinced investors to invest $700 million in the company at vertigo-inducing valuations. And even though SEC’s actions are a mere slap on the wrist with no admission of guilt on part of Holmes, the nuanced message of SEC actions is clear enough for rest of the unicorn club.

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