More than 100 tests from a single drop of blood !! that was the promise of a bio tech startup named Theranos, founded by young and jubilant Elizabeth Holms some 15 years back.
The blue eyed founder was also called as second Steve Jobs as she mimicked his turtleneck and jeans get up. She raised more than $900 from the bigwigs in US. At one time Theranos was valued at $9 Billion. The eminent personalities who invested in her start up ranged from Former Secretary of State George Shultz and Rupert Murdoch the owner of Fox News.
Recently Elizabeth Holms got convicted in the court on three counts of wire fraud and this could mean at least 20 years of jail term for the founder.
So what went wrong ? Have you ever heard investors dragging the founder of a start up to court if and when the start up fails to deliver ?
Don't you think failure is the part and parcel of the start ups and investors bait their money on start ups ? then why are they suing Elizabeth for failing ?
I was following the trial very closely since long and I realised it was not about failing, it was about lying blatantly and consistently. There are some lessons start ups needs to draw from this conviction
1. Seeing a dream is different however dreaming when you realise that the dream can never come true is a crime.
2. Theranos was a medical diagnostic test company and was cheating not only their investors but their customers also who were patients and were depending on the test results for their treatment. Lying to investors will only erode the capital however lying to customers in such manner endangered life. No start up should ever do that.
3. Two whistleblowers brought the whole scam out and they were bullied by their employer Theranos however still they persisted and caused this trial so big round of applause for them for making us see the truth behind a glassy and glamorous start up.
4. Many investors just got sold on the dream and never did any due diligence.They just did not wanted to miss the bus and believed other investors who chipped in
5. Sometimes we glamourise start up founders, give them credence beyond their true worth and this facade helps them to gain fake valuations. We need to stop doing this and value start ups purely based on the value they create.