March 18, 2019 – I have spent the last two weeks in and out of several hospital labs getting countless blood tests to try to figure out what kind of infection has been dogging me for months. I’ve been struck – or maybe stuck is the better word – by three things: Drawing blood is a repetitive process, which nonetheless must be done carefully and well every time, because it’s the investigative foundation of the medical help that follows. The people who do it day-in and day-out are some of the most caring and professional people around. And, it takes a LOT of blood to accurately run these diverse tests and panels.

Which leads us to Theranos, of course, the subject of Alex Gibney’s documentary on HBO, The Inventor: Out for Blood in Silicon Valley. Anyone from Walgreen’s senior leaders to the hundreds of other Theranos enablers who thought that complex blood chemistry analysis could be handled with a simple pinprick of blood were dumb money, not to mention greedy and arrogant.

They all claim to have been flimflammed by a college dropout and her secret boyfriend who produced false/curated results that have collectively shaken our confidence and comfort in the integrity of a blood testing system that we have all relied on for decades.

It’s clear, as you sit watching other sick and scared people praying for good results or at least some guidance about the right treatment, that these Theranos parasites jeopardized the health and potentially even the lives of thousands of unsuspecting patients. All, in my opinion, in their vain and venal race to raise and spend as much money as possible. Not, by the way, to develop their phony technology but to buy props, pawns, and sycophants and to party, promote, and publicize their lies before the world eventually caught on to their frauds.

I’ve come to the sad realization that there really are irredeemably broken and fundamentally evil people in this world like Elizabeth Holmes, the booted and indicted Theranos CEO. As the documentary points out, there was no science, no support, nothing but stealth and secrecy and a house of cards. Just full-speed-ahead and ignoring/suppressing all the contrary facts, the sound questions and concerns, and the regulatory inquiries, as weak and ineffective as they were.

When they are caught out, these are the very people – along with their venture capital and private equity enablers and media pals – who rush to hide behind the mantle of “faking it” for a while as if this shibboleth will excuse even the foulest behavior.

The truth is that they – and believe me she’s not alone – put their greed ahead of the health, lives, and futures of more patients than we will ever know for certain.

Another not-too-distant example was the Snap guys, who in the early days deceived users, according to a Federal Trade Commission settlement consent order.

(Right) A device once claimed to be able to test blood from very small amounts. Theranos, developer of the device, was founded by Elizabeth Holmes in 2003 when she was 19 years old. Valued at $10 billion in 2013 and 2014, Theranos ceased operations in 2018 amid charges of massive fraud.

Had Holmes and her boyfriend simply duped a bunch of stupid old white men – driven and blinded by their own demons and willfully oblivious – and a few market-watchers like Jim Cramer, maybe you might say that they got what they deserved. Certainly, she made fools out of plenty of media people and frankly it’s hard to watch Cramer in the emerging docs fawning over her startup/entrepreneurial clichés about the struggle and fighting the good fight long after the game was over.

But sadly, the damage and the impact of her deceptions are much more extensive and far-reaching. She is the latest and, I would argue, most despicable example of the Silicon Valley belief that it’s perfectly fine to fake it for a while until you make it. It’s OK because it’s something that they apparently believe that we ALL do to varying degrees.

Start with a story if you must, but ground it in substance soon

Everyone in the startup world suffers from impostor syndrome to some extent, so don’t be such a stickler for the rules. The only real sin is getting caught too soon. These are completely flexible and relativistic visions of truth and honesty. Tell them what they want to hear. A little inaccuracy saves a ton of explanation, especially when the Empress has no clothes to show for hundreds of millions of dollars that are now long gone.

I wrote about this problem with situational ethics a while ago. And so, it’s ultimately left to us to try to explain why these things continue to happen and how we can put an end to the most grievous examples and encourage our new entrepreneurs to do the right thing.

It begins with the idea that, however fast a talker you might be, you can’t talk yourself out of problems that you behave yourself into. Or dig yourself out of holes that you keep digging deeper. As everyone knows, most people are far more interested in what you actually do rather than what you say you’re going to do. Results, not rationalizations. Execution, not excuses or painful explanations.

It may start with a story, but it needs to be grounded in substance sometime soon. But, even with that being said, there are still a number of recurring situations that every entrepreneur faces in the course of his or her journey.

How you handle each one may differ under the circumstances, but there’s always a right way and the ability to recognize and prepare for these bumps in the road. To know your own best self and how you should handle the situation is a clear advantage.

So, what can you do, as either the truly interested observer who sees the train wreck coming and wants to politely offer advice, or as the entrepreneur who needs help to put guard rails in place and maybe a reminder or two to help keep things in some kind of perspective while the whole world seems intent on making that impossible?

There are basically four beliefs – call them delusions if we’re being honest – that entrepreneurs talk themselves into as justifications for all sorts of bad behavior. Just like getting over the idea that faking it is fine, we need to put all these crutches in the trash as well...

2. I’m a one man/woman army

The same positive qualities and emotional strengths that make for a great entrepreneur can sour rapidly and devolve into many excesses in the wrong direction. The beliefs that the world and all the responsibilities for everything in the business are heaped on your shoulders and that you’ve got to do it all alone are just as isolating and destructive in tough times as they are stimulating. No one can do these things all by themselves today. Asking for and getting help is a critical step in staying on the right path.

4. I can get it done with duct tape and chewing gum for now

Makeshift solutions and quick, half-baked fixes only deflect attention and resources from necessary and inevitable solutions to the real problems. Piecemeal patches, trying to do things cheaply that you shouldn’t do at all, and badly compromised choices are all bad bets on a future it’s unlikely that you’re ever going to see. There are no simple answers, but shortcuts are always the wrong way to go.

The bottom line isn’t easy or pleasant. No one really likes surprises – especially boards and investors – and surprises in the startup world are never symmetrical, they’re virtually guaranteed to be bad news.

In addition, no one wants to be the bearer of bad news or say what no one wants to hear. But it’s what you signed up for as the CEO and every alternative leads to worse lies and bigger problems.

It’s very difficult to admit that you’ve been wrong or stupid or made horrible mistakes. But it’s all easier in the long run and better for all concerned to be regarded as foolish or inexperienced – or even “not up to the job” – than to be known as a crook and a thief for the rest of your life.