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I'd love to have more insight into how this happened. It seems like there's a pattern of high profile failures of highly funded science-based startups. From t

by cixin 10y ago

I'd love to have more insight into how this happened. It seems like there's a pattern of high profile failures of highly funded science-based startups. From the outside the science seems faulty from the start, the management team seems to have no strong scientific background. Do investors really fund purely based on their force of personality? Personal connections? Do they see a big market and then ignore the scientific DD? I'd love to understand this better.

frisco 10y ago
I think this is availability bias. Many large (> $100M) deals happen all the time in early stage life sciences but don't get picked up by the tech press or covered as "startups". A few high profile stories flame out spectacularly like this but they are typically already the outsiders to the industry. To the specific scenario, when N is small all kinds of idiosyncratic bad decision making can happen.
- cixin 10y ago
  Hmm.. this is significantly more than 100MUSD (630MUSD). I'd love some examples of good plays in this area (that is, those that resulted not just in acquisition but viable products). This area being life science tools/diagnostics. From the companies I've been it seems to be biased toward crazy plays that had a stack of money thrown at them. Honestly would like to hear about others, know where to read about others.
  - EpicEng 10y ago
    I've been fortunate enough to work at two so far. At Aperio I was on the team that designed a digital pathology instrument. At the time this was pretty new tech. We were purchased by Leica a little more than four years ago. After that I went to epic sciences. We will be releasing our first LDT this year in a partnership with Genomic Health. It's a blood based prostate cancer test with demonstrated clinical utility, the first of its kind in the CTC space as far as I'm aware.
RA_Fisher 10y ago
I think it'd be cool to get a bunch of statisticians together to review Optimizely. Print out pages of the UI, remove the logo, and then ask them to write down opinions on the validity of the results UI they're shown.
- TeMPOraL 10y ago
  Please, please, please do so! https://news.ycombinator.com/item?id=10873226 https://news.ycombinator.com/item?id=10873226
  - RA_Fisher 10y ago
    The problem is that it's a lot of work and there's really no incentive to do so. At the end I worry the group could be retaliated against and/or be considered complainers. There really isn't any benefit to doing a review like this that I could see. Plus if you're a statistician like me, you already know the conclusion, a kind of blind study would only build credibility for non-statisticians. :-/
forgetsusername 10y ago
>I'd love to have more insight into how this happened There's the one story that you can read in articles like this, which will provide details of the rise and fall: http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther... But, there's another side: it happened because you weren't allowed to question Elizabeth Holmes. The beauty of the Internet is its natural history keeping. If you want more insight into how this sort of thing happens, look no further than early discussions about Theranos on these very boards. It was difficult to be critical, and supporters implied that the naysayers were merely "sexist". Of course, this was happening when tech industry sexism was peaking in the news cycle, and I belive that quieted some criticism.
- ajeet_dhaliwal 10y ago
  This is the article I read to learn what had went on last year and it is quite thorough. I'm looking forward to the movie mentioned in the article, seriously, I think it will be fascinating. There are scam companies and people embellishing the truth all over the place but they are usually found out fairly quickly, the fact that Theranos received so much investment and entry into various speaking engagements and clubs is what makes this so interesting. I wonder if it had not been medicine related and putting peoples lives in danger whether the show may have continued for longer.
- icebraining 10y ago
  If you want more insight into how this sort of thing happens, look no further than early discussions about Theranos on these very boards. It was difficult to be critical, and supporters implied that the naysayers were merely "sexist". Where? Story from two years ago, before it blew up: https://news.ycombinator.com/item?id=9440595 https://news.ycombinator.com/item?id=9440595 - Lots of criticism, some even calling it a scam, yet no mention of sexism nor heavy downvotes. The original submission: https://news.ycombinator.com/item?id=6349349 https://news.ycombinator.com/item?id=6349349 - Some criticism, not downvoted nor called sexism. Tell me, where are all those comments warning us about the impending doom at Theranos and getting silenced by supporters calling them sexist?
metaphorm 10y ago
> Personal connections? In the case of Theranos I believe it was this. Elizabeth Holmes seemed to have an "in" with a lot of Washington D.C. influencers and I'm pretty sure her pitch was based on using those connections to score lucrative DoD contracts.
- trhway 10y ago
  >Elizabeth Holmes seemed to have an "in" with a lot of Washington D.C. influencers her father has that "in". USAID is sometimes a cover for CIA, and the "network effect" here has been extremely high.
  - jackcosgrove 10y ago
    The fact that her father is tied to USAID makes a lot of sense. USAID is the soft power arm of the federal government. It exists mainly to bribe foreign leaders to gain desired policy outcomes in their countries. It does do some good things when those align with politics. If you needed to find government patrons willing to invest in a corrupt organization and engender goodwill at the same time, USAID is not a bad choice.
SmokyBorbon 10y ago
Fraud. That's how this happened.
at-fates-hands 10y ago
>> the management team seems to have no strong scientific background. When your CEO founded a company after only a semester of a Chemical Engineering program, there should be red flags everywhere.
- dagw 10y ago
  Half the founders in Silicon Valley, including many of the most revered ones, are college dropouts.
  - karthikb 10y ago
    The vast majority I have run across have more traditional educational backgrounds, many with advanced degrees through the PhD. It's just not as fun for journalists to profile the 37 year old PhD as the 19 year old dropout.
    - dagw 10y ago
      You're right of course. I should have said half the founders that get mentioned on sites like this one and TC.
  - HarryHirsch 10y ago
    On the other hand, the Boston and San Diego medchem startups are founded by established scientists in their 40s. Computers are quite the anomaly in the space.
  - driverdan 10y ago
    Except they're building websites and mobile apps, not complex scientific instruments.
  - Zanta 10y ago
    The infrastructure requirements are a lot lower in tech. It's possible to be a college dropout and already have many years and projects worth of experience under your belt. It's pretty damn hard to do bio and chem without a proper lab.
maverick_iceman 10y ago
UBeam is another one of these faulty science startup that should fail soon.
prostoalex 10y ago
It seems that if you have a 100% working technology, you are better off filing for patents and licensing the tech to a large incumbent. The need for venture financing arises when you're anywhere below 100% reliability, and are temporarily in this "fake it 'til you make it" category where the company has to rely on regular doses of cash infusions without much to show for (potentially) years. The problem with that approach is that for some the "make it" never quite materializes.

by cixin 10y ago

frisco 10y ago

I think this is availability bias. Many large (> $100M) deals happen all the time in early stage life sciences but don't get picked up by the tech press or covered as "startups". A few high profile stories flame out spectacularly like this but they are typically already the outsiders to the industry. To the specific scenario, when N is small all kinds of idiosyncratic bad decision making can happen.

cixin 10y ago
Hmm.. this is significantly more than 100MUSD (630MUSD). I'd love some examples of good plays in this area (that is, those that resulted not just in acquisition but viable products). This area being life science tools/diagnostics. From the companies I've been it seems to be biased toward crazy plays that had a stack of money thrown at them. Honestly would like to hear about others, know where to read about others.
- EpicEng 10y ago
  I've been fortunate enough to work at two so far. At Aperio I was on the team that designed a digital pathology instrument. At the time this was pretty new tech. We were purchased by Leica a little more than four years ago. After that I went to epic sciences. We will be releasing our first LDT this year in a partnership with Genomic Health. It's a blood based prostate cancer test with demonstrated clinical utility, the first of its kind in the CTC space as far as I'm aware.

RA_Fisher 10y ago

I think it'd be cool to get a bunch of statisticians together to review Optimizely. Print out pages of the UI, remove the logo, and then ask them to write down opinions on the validity of the results UI they're shown.

TeMPOraL 10y ago
Please, please, please do so! https://news.ycombinator.com/item?id=10873226 https://news.ycombinator.com/item?id=10873226
- RA_Fisher 10y ago
  The problem is that it's a lot of work and there's really no incentive to do so. At the end I worry the group could be retaliated against and/or be considered complainers. There really isn't any benefit to doing a review like this that I could see. Plus if you're a statistician like me, you already know the conclusion, a kind of blind study would only build credibility for non-statisticians. :-/

forgetsusername 10y ago

>I'd love to have more insight into how this happened There's the one story that you can read in articles like this, which will provide details of the rise and fall: http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther... But, there's another side: it happened because you weren't allowed to question Elizabeth Holmes. The beauty of the Internet is its natural history keeping. If you want more insight into how this sort of thing happens, look no further than early discussions about Theranos on these very boards. It was difficult to be critical, and supporters implied that the naysayers were merely "sexist". Of course, this was happening when tech industry sexism was peaking in the news cycle, and I belive that quieted some criticism.

ajeet_dhaliwal 10y ago
This is the article I read to learn what had went on last year and it is quite thorough. I'm looking forward to the movie mentioned in the article, seriously, I think it will be fascinating. There are scam companies and people embellishing the truth all over the place but they are usually found out fairly quickly, the fact that Theranos received so much investment and entry into various speaking engagements and clubs is what makes this so interesting. I wonder if it had not been medicine related and putting peoples lives in danger whether the show may have continued for longer.
icebraining 10y ago
If you want more insight into how this sort of thing happens, look no further than early discussions about Theranos on these very boards. It was difficult to be critical, and supporters implied that the naysayers were merely "sexist". Where? Story from two years ago, before it blew up: https://news.ycombinator.com/item?id=9440595 https://news.ycombinator.com/item?id=9440595 - Lots of criticism, some even calling it a scam, yet no mention of sexism nor heavy downvotes. The original submission: https://news.ycombinator.com/item?id=6349349 https://news.ycombinator.com/item?id=6349349 - Some criticism, not downvoted nor called sexism. Tell me, where are all those comments warning us about the impending doom at Theranos and getting silenced by supporters calling them sexist?

metaphorm 10y ago

> Personal connections? In the case of Theranos I believe it was this. Elizabeth Holmes seemed to have an "in" with a lot of Washington D.C. influencers and I'm pretty sure her pitch was based on using those connections to score lucrative DoD contracts.

trhway 10y ago
>Elizabeth Holmes seemed to have an "in" with a lot of Washington D.C. influencers her father has that "in". USAID is sometimes a cover for CIA, and the "network effect" here has been extremely high.
- jackcosgrove 10y ago
  The fact that her father is tied to USAID makes a lot of sense. USAID is the soft power arm of the federal government. It exists mainly to bribe foreign leaders to gain desired policy outcomes in their countries. It does do some good things when those align with politics. If you needed to find government patrons willing to invest in a corrupt organization and engender goodwill at the same time, USAID is not a bad choice.

SmokyBorbon 10y ago

Fraud. That's how this happened.

at-fates-hands 10y ago

>> the management team seems to have no strong scientific background. When your CEO founded a company after only a semester of a Chemical Engineering program, there should be red flags everywhere.

dagw 10y ago
Half the founders in Silicon Valley, including many of the most revered ones, are college dropouts.
- karthikb 10y ago
  The vast majority I have run across have more traditional educational backgrounds, many with advanced degrees through the PhD. It's just not as fun for journalists to profile the 37 year old PhD as the 19 year old dropout.
  - dagw 10y ago
    You're right of course. I should have said half the founders that get mentioned on sites like this one and TC.
- HarryHirsch 10y ago
  On the other hand, the Boston and San Diego medchem startups are founded by established scientists in their 40s. Computers are quite the anomaly in the space.
- driverdan 10y ago
  Except they're building websites and mobile apps, not complex scientific instruments.
- Zanta 10y ago
  The infrastructure requirements are a lot lower in tech. It's possible to be a college dropout and already have many years and projects worth of experience under your belt. It's pretty damn hard to do bio and chem without a proper lab.

maverick_iceman 10y ago

UBeam is another one of these faulty science startup that should fail soon.

prostoalex 10y ago

It seems that if you have a 100% working technology, you are better off filing for patents and licensing the tech to a large incumbent. The need for venture financing arises when you're anywhere below 100% reliability, and are temporarily in this "fake it 'til you make it" category where the company has to rely on regular doses of cash infusions without much to show for (potentially) years. The problem with that approach is that for some the "make it" never quite materializes.