[adventured]

It's a frequent fine line in tech.

To get a contract, Bob Noyce claimed for a buyer that Fairchild could produce & deliver a new type of transistor, in a large quantity, without having any production capability for it yet, as it had never been built.

Excite bid on getting a place on Netscape's browser, before having the money to actually pay for it (they figured they'd get it afterward):

http://bnoopy.typepad.com/bnoopy/2004/09/persistence_pay_1.h...

Microsoft on multiple occasions said or implied they had something they didn't have at the time, in dealing with MITS and IBM.

[stanfordkid]

I went to Stanford (hence the screen name) ...

Stanford students are generally sheep that know one thing for certain: That they are smart enough to get into Stanford and that they now have pretty much zero excuse to not be successful.

They assume that other things (vision, relentless lifelong obsession) are means to ends. It is a fertile breeding ground for what Trungpa Rinpoche most accurately describes a "Spiritual Materialism"

Their logical conclusion is that the key to success is not relentless pursuit of practice, but rather playing tricks like the ones you describe.

Bob Noyce, Bill Gates, Marc Andressen all succeeded as a result of their passion and relentless dedication to a narrow problem space over years of effort. They saw "the truth" and thus were able to make those leaps. "Truths" are always present in every society ... and are hidden. Unfortunately it requires dedication to uncover such truths and most stanford students would rather re-use the same hammer that got them into Stanford on real life than to truly seek "truth".

That's my 2 cents.

EDIT: I can see how this was condescendingly phrased and discriminatory towards a large group of people. We should all note that the person who outed Ms. Holmes was also a Stanford student and did something very brave. I was just annoyed with seeing this pattern everywhere and even partaking in it myself -- something that impacted me very negatively.

[verulito]

We should also remember that she graduated like 15 years ago, about the same time I did. The world was VERY different back then. Her style of management reflects the generation she was created from. Unlike her peers, she was unlucky enough to have had access to enough funding to last this long. As a result, the damage done is larger than was typical even back then but also ending at a time when it would stand out. Companies like Theranos collapsed all the time in SV in the late 90s and no one thought anything of it as a result. It's not an excuse but from the looks of it, her hole was too deep by the time trends change to do a course correction.

Let's also not forget that she pursued a vision that was severely flawed, no different than many college students today even. She made a lot of mistakes that many of her peers made at the same age. She's just really unlucky at this point.

[Mz]

http://money.cnn.com/2014/10/16/technology/theranos-elizabet...

She did not graduate. She dropped out.

I also dropped out of college at a young age, but not to defraud the world in an effort to become a billionaire. So, this is not intended to suggest being a drop out is inherently bad.

#JustTheFacts

[hieronymoustosh]

white people commit massive fraud stealing millions: 'unlucky'

minorities sell 5 oz of weed: '25 years in prison'

[lettergram]

I don't really know why this has to link back to Stanford.

[stanfordkid]

Because Stanford cultivates this type of activity through a deep worship of commercial activities rather than pure pursuit of knowledge to a very smart but very impressionable group.

Colleges need to hold learning to the highest regard ... Holmes was constantly invited as a speaker to campus before she became disowned.

Look into Clinkle if you want another example. Kids are obsessed with getting rich quick and glamorizing that behavior and spoon feeding it back to them is a recipe for disaster. Snapchat is another example!

Institutions of learning and knowledge need to emphasize and glamorize that. Often times Professors themselves go to work for these companies ... the intellectual elite should feel that way about themselves: elite in their knowledge. A snobbish dismissal of material wealth might be exactly what the institution needs.

[fikgm]

Stanford sells rich parents membership in a club for their children. Their billions is a pile of bribes. Poor smarter children go without.

[Buge]

Stanford (like most top private schools) offers very generous financial aid. Very low tuition for students whose families make < $125k, and very low room and board for students whose families make < $65k. https://news.stanford.edu/2015/03/27/new-admits-finaid-03271...

Of course poor students are less likely to get accepted because of less access to private tutors and other support.

[DonHopkins]

And the rich students who get in because of their rich parents don't have to go through the same rigorous smartness and motivational filters that poor students do.

I'm willing to bet the poor students on financial aid aren't such entitled misogynistic douchebags as the rich ones [1] who go on to found companies that are "only for rich people".

[1] https://en.wikipedia.org/wiki/Evan_Spiegel

[saturated_world]

In theory, that is great. In practice, it does little to level the playing field.

Many capable high school students are not even aware that schools like Stanford exist, and cannot even begin to conceive what acceptance into such a radically different world would even mean. I surely didn't. It is also possible that those students who are aware, and do aspire to receive this aid, have family members who actively sabotage their efforts.

[rhino369]

Promising to do something you aren't entirely sure you can do or haven't done yet, isn't fraud unless you lie about having done it before or being ready to go tomorrow or something.

Arguably, it is not even fraud when Theranos took samples and used a different method of testing (as long as the testing was just as accurate).

Therano's fraud was then telling investors and potential partners/clients that it had been testing using their test, when they really weren't. That is a lie designed to get additional funding or contracts.

[verulito]

Actually, it turns out that they also fabricated data on their test (Herpes I think) and they ended up having to send out letters to tens of thousands of customers who got false positives. They must be pissed... think of all the damage those have caused.

[slededit]

Microsoft didn't lie about having DOS - that's a myth. They originally sent them to Digital Research and when they failed to work with them said they knew where they could get an OS and they'd take care of it. IBM relied on them as a bit of a liason to the microcomputer industry - which they didn't have a good understanding of.

[Mz]

I dunno. Those incidents look like brinkmanship, not outright lying and making up evidence. If you think you can get the money and you, in fact, get the money, that may be a gamble, but it doesn't sound on the same order as inventing "evidence" whole cloth.

[Brockenstein]

Yeah, because things worked out and they were ultimately able to deliver before everything imploded.

It can be a fine line. Theranos didn't know where that line was.

[jacquesm]

It is a fine line. From practical experience: there is a class of inventors who have genuinely convinced themselves that their broken tech will work if only they get the bugs worked out, and this is always just over the horizon. They probably see themselves as doing you a favor by lying to you because you will reap the benefits after all, once the pay-day arrives.

I've seen lots of misery because of this, both with the inventors themselves, their families and employees. In one case a suicide.

It's very sad and one of the downsides of being in the business I'm in because I have come to recognize the signs of this particular ailment fairly quickly and it is a huge balancing act in both convincing my client not to invest while at the same time not pulling the rug out from under a quite possibly already unstable person.

Fraud can be intentional, or it can be the consequence of someone genuinely believing their own misguided version of reality, usually powered by some form of 'wouldn't it be great if' and associated lines of thinking.

Even so, Theranos - to me at least - seems to have crossed over into outright fraud from very early on in their lifetime. There were significant questions about the tech early on and without a good answer to those the project should have never moved as far as it did without some serious caveats about what they believed to be possible and total transparency about what had actually been achieved.

For a nice example of how gullible people are check out the Ilium thread on the homepage right now, it's a great example of how wishful thinking can cause investors to part with their money:

https://news.ycombinator.com/item?id=14167870

uBeam is another, so far they produce roughly two ecstatic press releases per year but there is no product in sight.

[Applejinx]

It depends on who the onlooker is, though. I'm always fascinated with flying car stories because I understand them: I can look at the Ilium story and know immediately things about it, for instance that it will not glide with weight distribution and wings as shown.

But if I looked at Theranos, I wouldn't have any idea what I'm looking at. We all have our own brain structures that set up our respective abilities to call BS: part of this is understanding the psychology, as you (jacquesm) do. This gives the background to not take claims at face value.

The other part of BS-calling is that structure of experience telling us things like 'center of mass for the object will be here' or 'adding 20 more people to this dev team will have this effect on their ability to coordinate development'. These are heuristics that might be more difficult to explain than to be directed by, but in practice they'll tend to function like iron laws: if an exception is ever found it's a huge deal. The trick is getting people to accept the iron law without the structure of experience to support it.

[adventured]

That's where the fine line comes in.

Did Excite sign a contract saying that they had the funds to pay in the case of winning the bid? I don't know the answer to that, it wouldn't be an uncommon requirement when bidding on a contract like that however.

Microsoft almost certainly lied on multiple occasions about what they already had, in trying to get MITS and IBM to take them seriously. The common historical story goes that they did lie - just how the wording went, who knows, they were clearly being intentionally deceptive regardless to capture the opportunity.

[Mz]

What I am saying is there is a difference between "It has not been done, but I believe I can pull it off" and "Look, look, we can totally do this and have already succeeded, here are the (completely faked) test results proving it!"

The former is a gamble, but it may be an informed gamble where you already have some idea of how to make it happen. The latter is a lie.

Startups absolutely should be operating in the realm of "It has not been done, but we think we can pull it off. In fact, we are pretty confident of that." They should not be operating in the realm of outright con artistry and fraud.

If you have the right experience, skills, education, personal assets of various sorts and solid mental models, predicting your expected success in a specific domain does not guarantee you will succeed. But it isn't necessarily just BS either.

The challenge is for other people to know which category you fall in. But you should know whether you are genuinely confident or straight up conning people -- barring serious delusion of some sort.

[skybrian]

It's extremely common to get the tense wrong. "This is what our product does" instead of "this is what our product will do." (They hope, if all goes well.) This is not (just) grammar nit-picking, it's often the difference between a promise and a lie.

For public companies, this is what results in "forward-looking statements" boilerplate. But it happens all the time in technical presentations.

I try to call people on it, but sometimes it's a losing battle.

[Mz]

Yeah, one of my very, extremely backburner (dead?) projects is called The Memome Project. The idea was to try to develop the architecture of ideas more solidly. Words and ideas have real value, meaning and power. I think Startups very much operate in the realm of ideas. Some ideas are really solid things, based on good mental models and rubrics and good data. And others are basically hot air. They are cheap and insubstantial and don't mean much of anything.

We need better ways to talk about and think about and measure the difference between those two things. The difference can be the difference between brinkmanship and outright fraud.