[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.