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The Theranos Effect: The Bewitched, Bothered and Bewildered Edition

The Theranos Effect: The Bewitched, Bothered and Bewildered Edition

This past week, Theranos founder and Steve Jobs wannabe Elizabeth Holmes was charged with “massive fraud” by the Securities and Exchange Commission. She agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, and returned 18.9 million shares she amassed during the alleged fraud.

The company, which raised more than $700M in funding, was “deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer” that could perform a full range of laboratory tests from a small sample of blood…But in reality, we allege that after years of development, Theranos was able to process just a small number of blood tests upon its proprietary analyzer, and instead conducted the vast majority of its patients’ tests on modified commercial analyzers that were manufactured by others,” Steven Peikin, the SEC’s co-director of enforcement, told reporters, according to USA Today. Read More...

The Demise of the Age of Social/Move Fast and Solve Entitled People’s Problems: Notes from the Blockchain

The Demise of the Age of Social/Move Fast and Solve Entitled People’s Problems: Notes from the Blockchain

 

We all know the mantras. Fake it till you make it. Move fast and break things. Ask forgiveness, not permission. The check is in the mail.

Oops, wrong list, but not really. Truth be told, they’re all lies with a Silicon Valley spin, with the exception of the last point, which is a classic. Read More...

Tech and the God View

Tech and the God View

It seems that both users at large and governments are now turning against the tech megaliths, which includes Facebook, Google and Amazon. Silicon Valley Is Not Your Friend We are beginning to understand that tech companies don’t have our best interests at heart. Did they ever?, wrote Noam Cohen in the New York Times. We don’t need to catalog what globalization, the exploitation of labor and the seemingly unbridled power of platforms such as Facebook and Google has done and is doing to world economies and people, individually. Wages have diminished or stagnated, verticals are being consumed and choked. They control the conversation, with hitherto unheard of collection of personal data on vast segments of the population globally – Facebook claims two billion users and how many people, besides Yours Truly, strenuously avoid Google search and all things Google, where and when possible? Voice activation may indeed make our lives easier, but again, at what price? Are we so accustomed to surrendering our privacy for the sake of convenience that we shrug it off? Head’s up, in case you missed it: Warning over iPhone apps that can silently turn on cameras at any time. And, as the article points out, “Google has recently deleted several apps that surreptitiously recorded users and masqueraded as legitimate apps.”

Wonder how many they missed…

Remembering the God View

A while back, when Travis Kalanack was CEO, Uber got into trouble with its customer-tracking God View app, which allowed the company to track riders’ locations and other data. In one case, Uber executive Emil Michael proposed digging up dirt on journalists who were critical of his company and spreading details of their personal lives. The issue was settled. Fines were levied and Uber promised to limit God View data. That was 2014. Read More...

A Tale of Two Titans

A Tale of Two Titans

Last week, Travis Kalanick, ahem, tendered his resignation as CEO of Uber, the company which he co-founded, and of which he is a 30% shareholder. No mean feat holding on to that much equity, considering the many rounds of funding that the company has received – $8.8B in 14 rounds, according to Crunchbase. It took a shareholder revolt on the part of investors representing roughly 40 percent control of Uber to accomplish the task, according to NewCo.

Then again, he’s Travis Kalanick. Taking a walk down memory lane, here are 13 Instances Where Uber Screwed Up (A Brief Throwback), demonstrating a bit more ubris than was advisable or legal, including class actions; sexist comments (and Susan Fowler’s blog post that started it all); surge pricing; criminal behavior on the part of drivers who were supposedly vetted; falsifying numbers; what to speak of the number of executives who departed the company in quick succession. Uber may not have been Uber without Kalanick’s personality to drive it (no pun intended), and while it has been said that there’s really no such thing as bad press, well, there are many Silicon Valley mantras that are in need of revision.

Uber has always been a predatory, take-no-prisoners corporate culture. They cut corners (drivers were not all properly vetted, it seems; agencies that do background checks do not all follow the same set of rules), and to reach Uber-size in the amount of time it took the company to accomplish its current market share (they’ve been around since 2009 and yes, market share has been falling off of late, which has given its closest competitor a big lift – pun intended: “Uber’s US market share fell from 84% at the beginning of this year to 77% at the end of May, according to  research firm Second Measure. Meanwhile, Lyft’s bookings were up 135% year-over-year in April, according to PYMNTS.com,” says Business Insider), you have to be employing measures that simply do not pass the sniff test (Uber drivers underpaid in New York City for years). Read More...

SiliCon Men

SiliCon Men

Now, that’s a book we’d like to see written and we do want credit for the title.

Dan Lyons put Silicon Valley’s bro culture back on the radar, and speaking of bro culture, Alicia Syrett (Pantegrion Capital) once referenced an article where two identical resumes were submitted to a hiring manager, one under a male name, the other under a female name. The hiring manager opted to meet with the male. Reason: he had stronger, more relevant experience.

What to speak of the fact that Men With 2 Years of Work Experience Earn More Than Women With 6. Read More...

The Rise and Demise of the On Demand Economy

The Rise and Demise of the On Demand Economy

Call it the Sharing Economy, the On Demand Economy, the 1099 Economy, the Gig Economy, or maybe most accurately, the Piecemeal Economy (since the work isn’t necessarily always there) or the Participation Economy (since it seems that anyone can share almost anything these days, including your home, your car, your time, even your Significant Other). But take note: according to Fast Company, The Gig Economy Won’t Last Because It’s Being Sued To Death. Worse, where’s the sharing when The Gig Economy Celebrates Working Yourself to Death.

There was a time – and we’re sure that it’s still going on – when startups would present themselves to investors as being the Uber of Whatever, since Uber, an early entrant into this vertical, has long been perceived and touted in the press as the jewel in the crown of the Sharing/On Demand economy. In fact, Handy has been referred to, ad nauseam, as the Uber for Home Cleaning, although, workers pay a price, as the Washington Post reports, since they receive no“workers’ compensation, unemployment insurance, time off or retirement benefits — all the perks and protections of working for a traditional business.” Customer who utilize the service also seem to be paying a price, considering the (latest) lawsuit that the service is facing for not having properly vetted its workers. And theft of property is only one of the issues in the complaint. Alison Griswold of Slate nailed it when she wrote that Almost everything that startups get right—and horribly wrong—happened at home-cleaning service Handy.

The same could be said of Uber, although it’s interesting to note that Uber so successfully initially marketed themselves as Us v the Taxi Cartel/David v Goliath, that they managed to capture mindshare and continue to grab investor dollars (over $5B last year alone) despite the fact that they’re hemorrhaging money; are facing fines for their failure to pay taxes; there are the sexual harassment and sex discrimination issues; founder Travis Kalanick’s unmitigated arrogance; and the company’s covert use of law enforcement-evading software, what to speak of “the continuous onslaught of litigation in the US for stiffing drivers, swindling taxi companies, eschewing traditional insurance obligations, and skirting regulations—or so the drivers, companies, and state or district attorneys say,” according to Wired. More lately, relatively newly appointed president, Jeff Jones, resigned after just six months (all of those scandals do take their toll), and just last week Uber announced that they’re going to Suspend Autonomous Tests After Arizona Accident. Not surprising: Uber’s autonomous cars drove 20,354 miles and had to be taken over at every mile (by a human driver), according to documents, Recode reported. Read More...

The New Normal

The New Normal

The big news last week was the Snap IPO – the biggest since Alibaba – which raised $3.4 billion for Snap, a company which managed to lose $514.6M last year and has lost money every year since it began commercial operations in 2011,” according to CNBC and, forest through the trees, “has warned that it will never make a profit.”

Facebook tried to buy Snap nee, Snapchat, a few years back for some $3B – pass – so they bought Instagram instead, for the now seemingly bargain price of $1B. Of course, Instagram didn’t have the number of eyeballs that Snapchat did at the time, but since Facebook, um, appropriated features that Snap had innovated – Stories comes to mind – Instagram’s popularity and growth has far outdistanced Snap’s. And remember: eyeballs/exponential growth are the holy grail of Silicon Valley investors and the market. We do know that Twitter has come up more than once in articles covering the Snap IPO, as how long did Twitter skate after the IPO, promising continued user growth, which never materialized. Au contraire, but they did go a good long time with nary a sustainable revenue model in sight, and a falling user base, which does go far in explaining the lack of a buyer for the company.

For the record, ‘growth potential,’ ‘eyeballs,’ – this is the language of Web 1.0, when it was all potential, all the time. The potential was there; the timing was off: the bubble burst. That was then and this is now, and we’re at the Too Big to Fail Stage in the history of tech. Read More...

Crimes, Misdemeanors – and Business As Usual

Crimes, Misdemeanors – and Business As Usual

Move fast and break things. Do more faster. These are the mantras that the tech industry, particular those in Silicon Valley, cut their teeth on. Competition is fierce and timing (first to market) – and perception (category killer: think Google and Facebook) – is everything. So is it a wonder that Uber has drawn so much scrutiny and criticism for its practices lately? On all fronts, it seems.

Has Uber Gone Too Far this Time? Is Uber involved in a Smear Campaign,?” asks Michael Spencer on LinkedIn, referring not only to former Uber employee Susan Fowler’s blog on the sexual harassment she encountered at the company, which was not unique to her but instead, fairly widespread in Uber’s frat boy culture, according to Caroline Fairchild on LinkedIn.

Then there’s the Google patent infringement lawsuit, which is alleging that Uber is using stolen technology which it acquired through its purchase of Otto, to advance its own autonomous-car development (A Stray Email Caused Google’s Waymo to Sue Uber and Otto Over Stolen Tech). Read More...

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