I recently watched The Inventor: Out for Blood in Silicon Valley. The HBO Documentary which profiles Elizabeth Holmes and her blood-testing company, Theranos, is both horrifying and familiar. In 2014, Theranos was valued at $10 billion. Four years later, it was worth less than zero.
It is the story of a tech startup that pushes a product that hasn’t been properly (or scientifically) tested and manipulates every buyer and investor into believing something that does not exist. It is also the story of a tech startup that puts marketing and false advertising over the development of a viable product.
If you have spent any time in Silicon Valley or the tech world, Holmes’ story of fraud and deceit is not unique. It just plays out on a much larger stage given Theranos’ growth, backing, and status. Many of the elements of this story are relevant to the HCM tech industry. We have all witnessed providers that have lost their integrity in the race to the top. Buyers today need to look beyond product capabilities and examine leadership, commitment to product and development, and transparency.
Below are a few quotes/themes from the movie that are relevant for some of the startups in our industry:
“We have to uphold a legacy in Silicon Valley of saving the world.”- The elitism that comes from Silicon Valley often undermines product strategy, customer support, and leadership style. Many leaders at startups get caught up in their egos that they forget to focus on building products that will work.
“We are part of something that is a revolution, and that will change our world.” I have heard this line from too many startups throughout my career. These blind statements damage both customer and employee loyalty. They give the false sense that these early startups know better than anyone else and shield them from any accountability.
“Data doesn’t sit in our mind as much as stories do. And even more important, stories have emotion and data does not.” – Many start-ups focus on their stories and messaging instead of the credibility of their products and data. Customers in many cases are buying a vision instead of a solution that will provide value.
“Getting results doesn’t mean it’s ready for primetime.”– Years ago, tech companies would spend years building and testing their products before they launched them. Today, it seems to happen overnight. A Stanford graduate or former Google employee will get an idea, and the next month, they start a talent acquisition company. Startups need to spend some time with customers and competitors to understand this market and what solutions will drive value.
“Honesty might cost them their jobs.” One of the most frightening aspects of the Theranos’ story is that employees that questioned the integrity of the company were fired. Collaboration needs to be an important part of a startup environment, and too often, early-stage companies shut down anything negative from their employees or customers. As a result, employees have little faith and confidence in these products.
For anyone that is buying new technology, investing in new technology, or just curious about HCM startups I highly recommend this movie. I think you will find many similarities between Theranos and many of the companies in this space.