It’s hard to know what the real issues are — if any.
But at a more meta-level:
- Private unicorns should expect real scrutiny. It “feels” like being a private unicorn (worth >= $1 billion) is the best of all worlds. You get the capital of an IPO (including, often, secondary liquidity for founders and employees), without the burdens of being public. Turns out, it’s not exactly that simple. And I think it’s fair the WSJ is going to take a hard look at private Unicorns in general.
- We all hack stuff. But it catches up to you. I’m no Theranos expert, but the fact the majority of tests aren’t run on their own machines is clearly a “hack”. Look, everything is a hack. I’m sure there are pieces of Facebook that still run on crappy PHP code from 2005. I’m sure huge pieces of the Salesforce code base are still a hack. But … this stuff catches up with you.
- The power of a narrative. Everyone wanted to believe in Theranos. Cool idea. Charismatic CEO. Seemingly easy-to-understand ROI and value proposition. Protect your narrative fiercely. When it’s gone, or broken … recruiting, capital, and so much more becomes that much harder.
- Maybe, not everything can start in a dorm room. Maybe the dorm room narrative doesn’t work as well in biotech / medical devices / etc. I don’t know. But in the first start-up I co-founded, I built implantable batteries from nanomaterials created on industrial CO2 lasers. What I learned from that is hard science innovation happens with youth, certainly. But it does take a lot more experience than learning Rails at 12 and writing your first app at 13.
Published on October 16, 2015