[HN Gopher] SF poop-testing startup, once compared to Theranos, ...
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SF poop-testing startup, once compared to Theranos, charged in $60M
fraud scheme
Author : ic0n0cl4st
Score : 185 points
Date : 2021-03-21 15:18 UTC (7 hours ago)
(HTM) web link (www.sfgate.com)
(TXT) w3m dump (www.sfgate.com)
| [deleted]
| xipho wrote:
| This is interesting because uBiome was at the time described
| (NYT, blogs, etc.) as a way for citizen-scientists to contribute
| to the scientific process, submit your poop, contribute to
| science. Pre-emptively, yes there are (very) many problems with
| the scientific process as it currently happens, but this is a
| relativley new class of things "citizen science + private
| industry" that is definitely going to take some time to smooth
| out. In part the scientific community is likely somewhat ignorant
| as to the promises of the startup culture, and I suspect they
| will definitely become more cautious promoting these types of
| collaborations as time goes on.
| astrange wrote:
| There are competitors to uBiome that are still going (Viome,
| DayTwo) and are possibly not scams.
|
| I did try uBiome because I dunno, I was bored. It seemed to
| give legitimate results (not the same thing every time) but the
| amount of "material" you submit was so small it can't have had
| much signal in it.
| stephenr wrote:
| Sounds like a shitty place to work.
| tpmx wrote:
| > received funding from Silicon Valley investors like 8VC in San
| Francisco and Andreessen Horowitz in Menlo Park, which hold 22%
| and 10% stakes in uBiome, respectively
|
| Shouldn't we expect long-established and well-respected VCs to do
| a very heavy due diligence, both initially and perhaps even more
| importantly continously to ensure something like this doesn't
| happen? Especially in the health field. I mean, the VC brands are
| used as a stamp of approval.
| Thriptic wrote:
| I can't speak about any specific company, but there are several
| VCs that specialize in life sciences and medicine and have
| people with the requisite expertise to evaluate claims on their
| team (or know the people to talk to in order to get it). The
| average tech VC might not have a deep bench of life sciences
| people to validate specific tech with, may not know the experts
| in the field, and may not know how the industry varies from
| tech.
| afavour wrote:
| We should expect it but it doesn't ever happen. SV VCs want
| hockey stick growth and a profit, be that via going public or
| selling to a larger company. All else is secondary.
| tpmx wrote:
| I kind of feel that the health field is special because of
| the risks. I guess self-driving may eventually get there too,
| in terms of risks.
|
| I don't remember any mainstream media reports talking about
| which VCs where early/heavy investors in Theranos though. :/
| karlding wrote:
| According to Bad Blood by John Carreyrou [0], the initial
| investors were mostly people that Holmes had cultivated
| relationships with, and thus it implies that perhaps they
| were not investing based on technical merit. However, their
| reputations ended up providing a signal of credibility and
| legitimacy of Theranos' claims that other investors and
| media later looked towards, much like a web of trust.
|
| She took a seminar and an Introduction to Chemical
| Engineering course with Channing Robertson (at the time,
| the face of Stanford's Chemical Engineering program) and
| worked in his research lab, and eventually was able to
| convince him to join the board as an advisor. Then she was
| able to leverage her family connections to raise money and
| further lend a sense of legitimacy.
|
| According to Carreyrou:
|
| _> She convinced Tim Draper, the father of her childhood
| friend and former neighbor Jesse Draper, to invest $1
| million. The Draper name carried a lot of weight and helped
| give Elizabeth some credibility: Tim 's grandfather had
| founded Silicon Valley's first venture capital firm in the
| late 1950s, and Tim's own firm, DFJ, was known for
| lucrative early investments in companies like the web-based
| email service Hotmail. Another family connection she tapped
| for a large investment, the retired corporate turnaround
| specialist Victor Palmieri, was a longtime friend of her
| father's. The two had met in the late 1970s during the
| Carter administration when Chris Holmes worked at the State
| Department and Palmieri served as its ambassador at large
| for refugee affairs.
|
| > [...]
|
| > In addition to Draper and Palmieri, she secured
| investments from an aging venture capitalist named John
| Bryan and from Stephen L. Feinberg, a real estate and
| private equity investor who was on the board of Houston's
| MD Anderson Cancer Center. She also persuaded a fellow
| Stanford student named Michael Chang, whose family
| controlled a multibillion-dollar distributor of high-tech
| devices in Taiwan, to invest. Several members of the
| extended Holmes family, including Noel Holmes's sister,
| Elizabeth Dietz, chipped in too._
|
| That's not to say that due diligence was completely
| ignored. Certain VC firms, like MedVenture Associates,
| passed on Thernaos when they asked for specifics about her
| TheraPatch system and how it differed from the one they had
| commercialized with Abraxis. Apparently Holmes was unable
| to answer the technical questions asked during their
| meeting.
|
| Carreyrou later summarizes:
|
| _> Channing Robertson, the Stanford engineering professor
| whose reputation helped give her credibility when she was
| just a teenager. Then there was Donald L. Lucas, the aging
| venture capitalist whose backing and connections enabled
| her to keep raising money. Dr. J and Wade Miquelon at
| Walgreens and Safeway CEO Steve Burd were next, followed by
| James Mattis, George Shultz, and Henry Kissinger. David
| Boies and Rupert Murdoch complete the list
|
| > [...]
|
| > Besides Theranos's supposed scientific accomplishments,
| what helped win James and Grossman over was its board of
| directors. In addition to Shultz and Mattis, it now
| included former secretary of state Henry Kissinger, former
| secretary of defense William Perry, former Senate Arms
| Services Committee chairman Sam Nunn, and former navy
| admiral Gary Roughead. These were men with sterling,
| larger-than-life reputations who gave Theranos a stamp of
| legitimacy. The common denominator between all of them was
| that, like Shultz, they were fellows at the Hoover
| Institution. After befriending Shultz, Elizabeth had
| methodically cultivated each one of them and offered them
| board seats in exchange for grants of stock._
|
| I recommend giving the book a read if you enjoy books about
| white collar crime.
|
| [0] https://www.goodreads.com/book/show/37976541-bad-blood
| maxcan wrote:
| > Shouldn't we expect long-established and well-respected VCs
| to do a very heavy due diligince, both initially and
| continously to ensure something like this doesn't happen? I
| mean, the VC brands are used as a stamp of approval.
|
| You must be new here.. _shrug_
| tpmx wrote:
| New to SV VC, sure.
| teraflop wrote:
| The complaint says that the founders told investors that their
| model had been cleared by legal counsel, when in fact their
| counsel had warned them that it was "risky" and potentially
| fraudulent.
|
| This might be a naive question, but... Shouldn't the lawyers
| have been involved in the investment rounds somehow? I get that
| there's attorney-client confidentiality and all, but wouldn't
| you expect them to at least be able to say "yes, we've looked
| at the pitch deck and confirmed that there's nothing materially
| false that we know of"? And shouldn't the lack of such
| assurance be an immediate red flag?
| theptip wrote:
| Typically an investment round will involve a rigorous due-
| diligence process. There will be a data room, and technical,
| legal, financial, and strategic documentation will be shared
| with the investor(s). I'd expect regulatory concerns to be
| top of mind with a biotech startup like this.
|
| I'm not sure what level of coverage is normal, but it's not
| unheard of to ask for a written opinion from a legal firm
| saying "this business model is legally sound".
|
| In this case it sounds like this was not asked for, and they
| just took the founders' word for it.
|
| On the other hand worth noting that "taking their word for
| it" happens to some degree in almost business deals; after
| all, past a certain point, outright lies will probably land
| you in jail (or at least with a massive fine).
|
| It could be a sloppy DD process was run here, or it could be
| that this sort of thing happens infrequently enough that it's
| not worth applying a fine-toothed comb to every single claim.
| foobiekr wrote:
| I have personally done a lot of DD and I will tell you
| that, while I am aggressive because I assume people are
| lying to me and maybe themselves, 99% of the time when I've
| done a tandem DD the other technilogists onvolved basically
| just feign interest and give a gut feel. I've also been on
| the receiving end of DD and witnessed this.
|
| I think you are _dramatically_ overestimating the quality,
| depth and especially the diligence of that process.
| wjnc wrote:
| This. One of the more fun things I've done professionally
| is trying to prepare an after-action report on a deal
| gone south. Reasonably small deal but 95%+ loss of value.
| I couldn't even get people to come to a shared baseline
| factsheet. We've done 10s of deals together, the firm
| prides itself on openness and is generally relaxed. Even
| with all the internal memos and external red flag reports
| in hand, we couldn't get to a shared sense of what
| happened, let alone if we dropped a ball. Point being: DD
| is hard even for well-established teams and hindsight is
| 20/20.
| pas wrote:
| Wow, this sounds very interesting, but I simply lack the
| context to understand this. Could you perhaps explain it
| a bit? What's and after-action report? How many people
| you would have needed to agree on said facts? How should
| one imagine this "couldn't get to a shared sense of what
| happened"? This means that everyone had their own very
| detailed theory that then seemed off for the others
| (because some facts were excluded, interpreted
| differently, weighted differently by others)?
| foobiekr wrote:
| I've never done one of these (except on my own company),
| it sounds interesting. I can think of several companies
| where I'd love to know WTF the investors were thinking,
| though.
| tpmx wrote:
| I'm sure e.g. A16Z did a very thorough DD before investing.
| But, how much time did they invest in following up this
| company after every year since? Meanwhile, the VC brands
| were on proud display on the company's website as a mark of
| trust.
| cj wrote:
| Lawyers (of the company) typically don't get involved in
| reviewing pitch decks for accuracy at least in the early
| stages. And even if they did, the lawyers only know what the
| founders tell them. Additionally, lawyers typically avoid
| asking probing questions of founders. especially if there is
| risk that the answer they get may be troubling - it's much
| easier to defend and advise a client when you're not
| explicitly aware of every dirty secret.
|
| But you're not totally off base. It's absolutely the
| responsibility of VCs to do their own due diligence. VCs
| usually are investing _other people 's_ money. It's not a
| good look for VCs to invest in scams, so VCs typically do
| some degree of due diligence (which could be virtually zero
| diligence at seed stage / Series A, to quite a lot of
| diligence at later stages as the amount of money involved
| increases).
| knuthsat wrote:
| When you try raising money from VC in San Francisco, the people
| you're pitching to are more focused on communicating with each
| other (behind your back) and trying to either get you to think
| you won't get any money or that you won't get as much as you
| want.
|
| They are not really focused on the details of your business,
| especially if it sounds right to some PhD that works for them
| as a technical expert.
|
| For example, you can pitch to multiple VCs and now they can
| either start a bidding war (because you either lie or tell the
| truth of your existing offers, and they do not communicate with
| each other) or they can communicate together and get a discount
| because you're not playing the information sharing game.
|
| The dynamics of raising money are not really fair or focused
| much on what you're doing.
| tpmx wrote:
| Sure, I've kinda gotten the gist of that. (Thanks for the
| summary though!)
|
| Still: I kind of think that especially in the health area,
| there's a pretty large risk of e.g. the Andreessen Horowitz
| brand being tainted. It should be in their self-interest to
| protect themselves against this in the future, by applying
| more continous due diligence.
| yalogin wrote:
| The Theranos lady is yet to face consequences for her fraud and
| since this is financial fraud, there is every chance she might
| plead guilty and evade any jail time. In such a scenario there is
| every possible incentive for copy cats to emerge. She is not the
| first fraudster but feels like the first one to cheat startup
| investors at such a large scale.
| stefan_ wrote:
| Where are the indictments for the investors on the board that had
| oversight?
| __michaelg wrote:
| >>SF poop-testing startup, once compared to Theranos, compared to
| Theranos again<<
| hiyer wrote:
| So it's comparable to Theranos in more ways than one.
| nceqs3 wrote:
| YC Backed!
| ic0n0cl4st wrote:
| Not too surprising. YC's more successful companies do have a
| history of skirting (Uber, AirBNB).
|
| When I worked at PagerDuty, some of the less ethical aspects of
| the company (like the product was initially developed while
| interns at Amazon) were explained to me with this phrase,
| verbatim:
|
| "Paul told us to be naughty, but not too naughty."
| akavi wrote:
| I think most people here would agree that working on a side
| project in your free time using your own resources (Ie, not
| using your employer's) is perfectly reasonable and hardly
| comparable to fraud.
|
| (Disclaimer: happy PD employee from 2011-2015)
| ic0n0cl4st wrote:
| Oh hey I know you, didn't know you stayed so long. I think
| of you every time I hear the phrase "fractured fricitive".
|
| I remember the Amazon thing .. differently. Also some
| pretty shady marketing tricks, and you know, failing to
| protect a female employee from a predatory creep at a
| conference.
| teraflop wrote:
| Don't forget about that time YC funded a smuggling ring:
| https://news.ycombinator.com/item?id=8199286
| ic0n0cl4st wrote:
| I think every traveler has this idea, explores it, realizes
| it is illegal and moves on.
| tpmx wrote:
| I guess it's a sign of a true startup person to see that
| while it may be illegal, it will allow growth?
| michaelcampbell wrote:
| I had looked at PagerDuty in the Atlanta area because of
| their use of Elixir, which I would really like to explore and
| get good at. Is your experience there overall negative?
| ic0n0cl4st wrote:
| It's been 10 years, but I would find it hard to say a good
| word about the founders.
|
| My experiences there taught me that no good deed goes
| unpunished. I dropped out of the startup world and become a
| "fuck you, pay me" consultant.
| dang wrote:
| Uber wasn't funded by YC.
| staunch wrote:
| Which doesn't say much, since this is (presumably) only the
| case because Uber didn't offer YC the opportunity to
| invest, and not because YC wouldn't have been willing to.
| yumraj wrote:
| YC is a VC at a mass scale, obviously profit oriented.
|
| They're not angels (pun intended)
| tpmx wrote:
| Early and with a small amount. Still, there's the brand
| effect...
|
| https://www.ycombinator.com/companies/718 (404)
|
| https://blog.ycombinator.com/ubiome-yc-s14-raises-4-dollars-...
| sokoloff wrote:
| Now twice compared to Theranos.
| mastazi wrote:
| I'm pretty sure that there was a Tim & Eric sketch about a poop-
| testing startup... sometimes reality surpasses parody
| peter_d_sherman wrote:
| >SF poop-testing startup, once compared to Theranos, charged in
| $60M fraud scheme
|
| Hmmm...
|
| I believe there's a joke in all of this...
|
| Something having to do with that old expression about when _"
| something"_ hits the fan...
| Delk wrote:
| Not being from SV (or from the U.S.), I initially read the SF
| as "science fiction".
|
| I don't know if their (possible) problem is just in money
| handling or the service, but it would have been kind of funny
| if the potential fraud had been that the service was all make-
| believe.
| valuearb wrote:
| I feel like naming your child Sunshine is just setting them up
| for some kind of delusional life choices like fraud.
| mgraczyk wrote:
| SEC complaint:
| https://www.sec.gov/litigation/complaints/2021/comp-pr2021-4...
| greenyoda wrote:
| And, as noted in the SEC's press release (linked from the
| SFGATE article), there are also criminal charges:
|
| "In a parallel action, the U.S. Attorney's Office for the
| Northern District of California today announced criminal
| charges against Richman and Apte."
|
| Press release from U.S. Attorney's Office:
| https://www.justice.gov/usao-ndca/pr/ubiome-co-founders-char...
|
| Criminal indictment: https://www.justice.gov/usao-ndca/press-
| release/file/1377481...
| ketamine__ wrote:
| What happened to this page?
|
| https://www.ycombinator.com/companies/718
|
| Archived version: https://archive.is/cbIIT
| dang wrote:
| I have zero inside information about this but since YC ejects
| companies that break its ethics code, it's possible that we
| disowned this company quite a while ago.
|
| Edit: I just checked an internal page that I go to when I need
| info about a YC startup and it says "Removed", so I think
| that's what happened, and probably rather early in whatever
| process led to this outcome.
| pedalpete wrote:
| Wow! That's really interesting. I was typing in some random
| numbers looking at what other companies were in this
| directory, how large it went, etc etc, and I hit quite a few
| of these missing pages. I wonder if all of those companies
| got ejected for breaking the code of ethics, or if there are
| other reasons?
| dang wrote:
| I'm afraid I have no idea--I'm pretty far removed from that
| side of the business--but my guess would be that it's
| probably more complicated and there are likely a lot of
| different possible reasons.
|
| YC has funded thousands of startups, so there's inevitably
| a long tail of weird cases. People tend not to take that
| into account when assessing particular datapoints.
| jimhi wrote:
| Most favourable assumption: They have a policy to remove
| companies from their network and site that violate certain
| rules - like fraud.
|
| Least favourable assumption: They are doing damage control with
| their association. This article does not even mention Y
| Combinator initially funded them.
| tpmx wrote:
| Could also be: removed becaused the company is defunct.
| jimhi wrote:
| They don't remove pages for inactive companies. Check the
| parent's archive link for what that looks like.
| WrtCdEvrydy wrote:
| I mean, makes sense.
|
| Can we get a new category for "Fraud" under
| ycombinator.com/companies?
| jacobsimon wrote:
| Before it was announced that uBiome was committing insurance
| fraud a few years back, my friend and I compared our test results
| and found that our very detailed, 10-page personalized biome
| reports were _completely identical_ except for our names. So I
| believe they were also just completely fabricating their test
| results from the beginning, and some of the employees at the
| company must have known this.
| cbozeman wrote:
| Haha, wow... my insurance company actually paid for their test
| for me years ago. I'm tempted to share mine here too, just to
| see if we both had the exact same results as well.
| Guest42 wrote:
| Perhaps you can share the first 10 nth characters to confirm
| a match?
| duxup wrote:
| That or the results were accurate, but like Theranos their
| results were just from ... running the tests through their
| competitor's machines ;)
| Barrin92 wrote:
| >some of the employees at the company must have known this.
|
| what always fascinates me isn't the people who are in on in but
| the people who are kind of on the edge. From the Theranos case
| I remember employees not being allowed to enter rooms, secret
| chat rooms, people being followed by security etc... like, how
| can you work for a company like this and have a sort of
| Twilight Zone or Kafka novel experience for years and just be
| okay with it?
| jimkleiber wrote:
| Secrecy doesn't always imply impropriety but it can, and
| that's the challenge with such secrecy, is that one doesn't
| know.
|
| I.e, I imagine a lot of Apple corporate culture has similar
| restrictions, yet as far as we know, they're not committing
| fraud like that.
| jghn wrote:
| The book Bad Blood gets into this a bit. It's a fantastic
| read on the whole Theranos story, for those who have not read
| it yet.
| aYsY4dDQ2NrcNzA wrote:
| I recommend "The Dropout" podcast. Very well done, lots of
| great interviews.
|
| https://abcaudio.com/podcasts/the-dropout/
| vkou wrote:
| In a large company, this sort of thing is perfectly normal.
| There are plenty of buildings in Google where random Googlers
| working on Ads can't enter.
|
| Unless your work interfaces with what happens in those silos,
| you generally don't have any idea about what's going on in
| the Android Hardware Testing building, or the garage out of
| which Project Loon ran before it was shut down.
|
| It's a lot stranger in a small start-up.
| hellbannedguy wrote:
| When it comes to money most people in every profession look
| the other way.
|
| I just can't figure if 90%, or 99%?
|
| Every profession, and every job, people look the other way
| on truth, and moral issues.
|
| I usually have more respect for the criminal who admits he
| steals, and cheats, for a living.
| hawk_ wrote:
| I think it's like boiling the frog. If they ended up in a
| situation like that abruptly, most would bail. But the little
| day to day changes can lead to boiling the proverbial frog.
| We all do that to some extent. Members of the FAANG group of
| companies indulge in quite egregious practices from an
| outsider's (wider society) perspective but insiders feel it's
| normal.
| heavenlyblue wrote:
| > I think it's like boiling the frog.
|
| You can't boil a frog like that.
| whoooooo123 wrote:
| And ostriches don't really stick their heads in the sand,
| and lemmings don't really jump off trees. Do we both get
| a medal?
| kbenson wrote:
| > lemmings don't really jump off trees
|
| Trees? Isn't the traditional myth they jump off cliffs to
| drown in the ocean, as exemplified by the old Disney
| documentary where they filmed it, but in reality it was a
| river they were crossing, and the species depicted isn't
| even known to migrate?[1]
|
| Not trying to be pedantic, it's just interesting how
| these things shift and mutate over time and culture.
|
| 1: https://en.wikipedia.org/wiki/White_Wilderness_(film)#
| Contro...
| celticninja wrote:
| But the saying is the saying regardless.
| hawk_ wrote:
| sure, but don't throw away the baby with the bathwater.
| Y_Y wrote:
| You just need to secure the lid.
| taurath wrote:
| They also are sitting around listening to leaderships
| carefully crafted justification day in and day out. I've
| had otherwise smart engineers who work in advertising tell
| me that people enjoy looking them, and any criticism of
| "user engagement at any cost" is met with bewilderment.
| canadianfella wrote:
| Looking them?
| wonnage wrote:
| I worked at a place that had a top secret "spam team"
| shrouded in secrecy. Secret meetings, separate code repo,
| iirc even a dedicated meeting room, etc. The official reason
| was that they didn't want their spam detection algorithms to
| be leaked. Coincidentally there was a lot of outside
| speculation about whether being in the free vs. paying tier
| of customer would affect this spam detection.
|
| One can only wonder!
| p1necone wrote:
| This is actually sort of reasonable. The details of
| automatic moderation tools need to remain secret otherwise
| they can be gamed really easily. Even manual moderation
| strategies generally work better if they're not explained
| (see - HN itself).
| fisherjeff wrote:
| I think it's all about the narrative. If you believe deeply
| enough in the long-term outcome, there's a lot that a person
| can overlook along the way.
| fortran77 wrote:
| Also people really want to believe the story of a "female
| Steve Jobs."
| tpmx wrote:
| Stock options. Personal gain is a hell of a drug. Remember
| that these people are self-selected to go for money - that's
| why people go to SV.
| standardUser wrote:
| I hope that most start up employees view equity as a low-
| stakes gamble and not a money-making scheme, because the
| odds of getting rich, or getting anything at all, are very
| slim. I know that's how I've viewed my equity at the
| startups I've worked for. Besides, there are way more
| tangible and guaranteed benefits to working for small
| companies and companies in interesting spaces.
| mavelikara wrote:
| > employees not being allowed to enter rooms, secret chat
| rooms,
|
| This is providing employees only as much information as
| needed to do their job. Apple, for instance, seems to do
| this. So it might not ring any alarm bells with the employee.
| Judgmentality wrote:
| > like, how can you work for a company like this and have a
| sort of Twilight Zone or Kafka novel experience for years and
| just be okay with it?
|
| Realistically, the best and brightest left early and it's the
| people afraid of losing their jobs that feel compelled to
| shut up and toe the line.
| [deleted]
| kbenson wrote:
| It would be easier to identify these places if it was the
| best and the brightest that left. Those with confidence
| and/or the financial stability to not worry about it can
| leave. There are plenty of very good and very bright people
| that don't fall into those categories for one reason or
| another (young, external factors making it risky to leave,
| etc).
| Judgmentality wrote:
| If you work in tech and you're very bright, it's trivial
| to see the signs of a bad workplace and be unable to find
| work elsewhere. I do not believe anyone would choose to
| stay if they were very talented, because it should have
| been obvious there were problems and it should have been
| easy to leave.
|
| Everybody I know in tech that's any good has no problem
| finding a new job on short notice, including people with
| less than one year of experience.
| minitoar wrote:
| A generation of tech employees that have never worked
| through a recession.
| Judgmentality wrote:
| That doesn't change the fact that in the current job
| market they can trivially find a new job. That may not be
| true in the future but there's no reason not to take
| advantage of it now.
| an_opabinia wrote:
| They hired a lot of people who were vulnerable in ways that
| are difficult to control, like being H1Bs.
| tpmx wrote:
| Source?
| busymom0 wrote:
| https://www.computerworld.com/article/3195957/us-law-
| allows-...
|
| https://www.gao.gov/assets/gao-11-26.pdf#page56
|
| https://reclaimthenet.org/silicon-valley-hib-visas-
| instituti...
| tpmx wrote:
| None of those links are specific to this company, so
| they're not really relevant.
| golemiprague wrote:
| You need the money, people pretends like changing jobs is
| easy, it is not the case for most people. Also, if the
| leaders cheat why the employees at the bottom should care for
| it? are they paid enough to care? they are not going to earn
| so much from the success of the company and not loose so much
| from the failure. They are just employees
| azinman2 wrote:
| Could it be that you did have comparable results? The thing
| about ubiome was that the results were so high up the
| evolutionary tree (or at least when I did it in 2014 or so). So
| it would be like comparing a fish to a tree.
|
| That said, it told me my composition was like that of an East
| African, which I am not. That wouldn't surprise me as I have
| gut issues. My big hope for the next 30 years is we
| meaningfully crack the nut on microbiomes and can bring the
| next major evolution in medicine to a reality. We need these
| kinds of companies as a step 1.
| ficklepickle wrote:
| It's a poop-scapade! Did you both have newspaper and wolf hair
| in your excrement?
| macjohnmcc wrote:
| People can justify all kinds of things if they are making
| money. I knew one of the programmers who was caught up in the
| Madoff Ponzi scheme. He went along with it for a long time and
| enriched himself. He had to have known what was going on.
| tttioo12345 wrote:
| Early employee, AMA!
| staunch wrote:
| Was the technology real?
| duxup wrote:
| >Richman was even named an "innovator" winner in Goop's "The
| Greater goop Awards" and at its peak, uBiome was valued at $600
| million.
|
| Considering how questionable Goop is that the fraud seems about
| right.
|
| In the meantime the whole medical start up where they suddenly
| can test, for cheaper, better, etc seems to regularly come up
| short on the actual testing, results, or even just valid use
| cases.
|
| Much like Theranos nobody ever seems to explain how these kind of
| companies can just suddenly test for more so easily where the
| existing medical industry just hasn't been able to.
|
| Of all the things that the start up ... "system" can do well I
| kinda question their ability to suddenly become amazing complex
| medical device inventors / scientists. I recall some folks who
| work in that industry and they noted that creating new tests and
| diagnostics and equipment is often incredibly slow and iterative.
| That doesn't seem very start up-ish. The magical breakthroughs
| are rare.
| twic wrote:
| I note we didn't get any SARS-CoV-2 vaccines from startups.
|
| Well, kind of except Radvac:
|
| https://radvac.org/vaccine/
|
| https://www.thecrimson.com/article/2020/10/8/radvac-scrut/
|
| But if you had the choice between radvac and Pfizer or AZ,
| which would you take?
| duxup wrote:
| Yeah I'm not sure I'm in the mood to have my vaccine ...
| disrupted.
| astrange wrote:
| Moderna and BioNTech were both startuppy, neither of them had
| any products and they were working on cancer moonshots. They
| happened to have already gone public, but it seems like
| that's because they ran out of runway.
| vkou wrote:
| > In the meantime the whole medical start up where they
| suddenly can test, for cheaper, better, etc seems to regularly
| come up short on the actual testing, results, or even just
| valid use cases.
|
| That's because medical testing is hard, more testing doesn't
| always lead to better treatment, and the people who have
| devised existing testing processes weren't so stupid that a
| 20-year old with no background in medicine can just come in and
| upend the entire system on their first try.
|
| You end up trying to build a startup to solve a decades-old-
| problem that already has reasonably-good-solutions, in a field
| where R&D takes decades, costs hundreds of millions of dollars,
| and where you will have to figure out an in into an established
| old-boys-network in order to actually sell your product, if you
| get it built. All in an industry that's both cost sensitive,
| and highly cost-insensitive at the same time.
|
| If you actually think <some modern medical procedure> is
| overpriced, and wasteful, it would probably be good for you to
| work a few years on optimizing an existing lab's processes,
| before you jump straight from college into trying to optimize a
| novel process that hasn't even been invented yet.
| bsder wrote:
| > That doesn't seem very start up-ish.
|
| The "innovation" in the medical start-up space would be
| "indemnification".
|
| Take a startup that has real results and fund them through FDA
| approval and backstop them when they get sued because the
| device isn't 100% (no device ever is).
|
| I had a long talk at CES about 5 years ago with a doctor who
| created an asthma monitoring device for his daughter that would
| notify him and the school nurse when his daughter had an
| attack. I _guarantee_ that device worked pretty damn well due
| to self-interest.
|
| He couldn't get _anybody_ to touch it. Everybody knew that you
| were going to get sued the moment some child died and a message
| didn 't get delivered. Nobody would indemnify him even if he
| somehow managed to get through full FDA approval.
|
| Want innovation in bio? Backstop the little people who have
| real devices and real results rather than funding well-
| connected, turtleneck-clad marketing charlatans.
| ketamine__ wrote:
| Scientists don't know what this number means. Doctors don't
| either. And yet this number from a test result from a company
| in SF means something to someone in SF. And no one can figure
| out why.
| bioinformatics wrote:
| We (scientists) know this number, be Academia, clinical, etc.
| After all, we have grants and budgets to follow and we are
| skeptic of anything too expensive or cheap.
| hellbannedguy wrote:
| I think we didn't think a certain type of person could lie like
| most people when it comes to their money?
|
| I remember seeing Holmes in that Job's get up, and knew
| something didn't smell right, but was embarrassed to even bring
| it up----knowing their would be the backlash.
|
| Looking back I don't think I have ever met a truthful wealthy
| person? They seemed to make their wad on lies?
| jamiek88 wrote:
| Behind every great fortune lies a great crime is the old
| saying, seems apropos.
| rexreed wrote:
| Remember the wave of all those "smart" Silicon Valley CEOs who
| were so convinced they could build a better ventilator at the
| height of the COVID ventilator shortage? All those folks who
| thought they could just throw together their engineering
| knowledge and hacking skills without ever having experience
| building a medical device?
|
| This sort of tech hubris is all over the tech ecosystem. Folks
| who believe their startup prowess means they can tackle any
| medical device with fake-it-till-you-make-it or fail-fast-
| break-often mentality that often fails in reality.
| duxup wrote:
| The ventilator thing was kinda scary. Like ventilators I
| assume are kinda expensive more than just say that the
| medical system is wonky ...
|
| It was kinda terrifying the idea that we'd run through COVID
| with hordes of people hooked up to equipment someone came up
| with by dorking with a 3D printer and some old parts from a
| vacuum...
|
| It was telling when you didn't see established ventilator
| makers coming up with their own ad hoc cheap-o designs...
| much like you didn't see Theranos's competitors make wild
| claims of their own similar device ... probably for reasons.
| mnky9800n wrote:
| Like when moocs were going to replace the University and now
| that University has been online everywhere for more than a
| year nobody even mentions the old moocs that were supposed to
| cause this shift when instead a pandemic did it.
| duxup wrote:
| A few years ago I went to a coding bootcamp. I had very
| mixed feelings at the experience.
|
| It was 'run' by the local university, but really was just a
| package deal they bought from another company.
|
| I gave the university some feedback that they have all the
| resources at the university to do WAY better than these
| commercial bootcamps... but the folks involved bought the
| package deal and are invested in it.
|
| It's sad, the university IMO could do better, if they
| tried.
|
| Meanwhile the traditional unversity system does work, but
| is a huge time investment, and the bootcamp system works
| 'kinda' for some folks ... but fails most IMO.
| hypersoar wrote:
| A book, "Failure to Disrupt Why Technology Alone Can't
| Transform Education", recently came out about exactly this.
| In an interview, the author, Justin Reich, explained that
| schools perform so many different functions in so many
| different ways that MOOCs neve had a shot at replacing it.
| Instead, it got swallowed up and and integrated with our
| existing educational system.
|
| [0]https://www.hup.harvard.edu/catalog.php?isbn=97806740890
| 44
| treis wrote:
| They have to a certain extent. As an example, half of med
| students attend class "rarely" or "never" preferring online
| prep material. The fundamental problem is that the utility
| of universities is more about credentialing and signalling
| than actual learning. The Moocs are fine for learning but
| have 0 credential value. Until that changes they won't
| replace universities.
| dd36 wrote:
| I learned a lot in university. My professors were
| amazing.
| dgellow wrote:
| I learned a lot via MOOCs, professors (who are often also
| university professors) are amazing.
| giantrobot wrote:
| But they'll 3D print some blockchain IoT NoSQL! Made with in
| SF. It will disrupt Big Ventilator.
| raverbashing wrote:
| And the patient will die if their wifi goes down because
| it's a piece of crap that listens on a websocket for a
| stream of commands to inflate or deflate.
| duxup wrote:
| Well that's just <insert open source package>'s fault!
| ljm wrote:
| Powered by Kafka so if the patient dies they can just
| open up Kibana to scour the logs, patch the life support
| microservice cleverly nicknamed Lazarus by the engineers,
| and then replay the state with the fix in place to bring
| them back online. I mean back to life.
| Zhenya wrote:
| Lazarus. Amazing.
| ljm wrote:
| Probably a good thing when you look at the prior art. Imagine
| a Juicero style ventilator that only accepts DRM'd oxygen
| tanks on a monthly sub and barely works better than a foot
| pump for an air bed. Or another medical device sold to an
| advertising heavyweight, like Fitbit.
| quercusa wrote:
| Still compared to Theranos!
| happycube wrote:
| Nah, $60mil is nothing by comparison.
| duxup wrote:
| My first thought was "well at least it was only 60 million".
| duxup wrote:
| They were right all along... sadly.
| jeffgreco wrote:
| Adult Swim had the best take on Silicon Valley poop tech:
| https://m.youtube.com/watch?v=DJklHwoYgBQ
| rexreed wrote:
| Fraud in the startup world is a lot more prevalent than might be
| well known. NS8, Communiclique, Lordstown Motors, Trustify, and
| so many have come to light in the last year.
|
| Investors don't do enough due diligence and trust their own gut
| too much.
|
| [0] https://www.sec.gov/news/press-release/2020-162
|
| [1] https://www.forbes.com/sites/davidjeans/2020/10/29/fraud-
| sof...
|
| [2] https://www.justice.gov/usao-edva/pr/california-business-
| man...
|
| [3] https://www.msn.com/en-us/money/companies/lordstown-
| motors-a...
|
| [4] https://www.justice.gov/usao-mdal/pr/founder-lee-county-
| base...
|
| [5] https://abcnews.go.com/US/wireStory/sentencing-set-
| alabama-m...
| rsj_hn wrote:
| People lie about having a startup all the time , or perhaps
| they incorporate somewhere but lie about having
| customers/products/employees - all those pesky ingredients
| necessary to actually have a business. I wouldn't exactly call
| that fraud in the "startup world", but rather fraud in the
| _investment_ world, as the goal is to bilk investors. This type
| of fraud is very common whenever something reaches the public
| consciousness, but the swarm of conmen selling X doesn 't have
| much to do with the real startup eco-system anymore than
| someone selling you a piece of the Brooklyn Bridge is a fraud
| in the bridge world.
| zeruch wrote:
| " I wouldn't exactly call that fraud in the "startup world",
| but rather fraud in the investment world, as the goal is to
| bilk investors."
|
| A noteworthy (and mostly overlooked) distinction.
| atian wrote:
| The numbers are usually unintelligible until after series A-B.
| bsder wrote:
| > Fraud in the startup world is a lot more prevalent than might
| be well known.
|
| This is quite true. I'd actually estimate it north of 50% given
| my discussions with various people over the years.
|
| I would argue that its probably better than this in the
| "bootstrapped" arena rather than the VC-funded arena. VC
| lottery tickets seem to attract fraudsters like flies.
|
| > Investors don't do enough due diligence and trust their own
| gut too much.
|
| This is probably true, but one of the real problems is that
| serial fraudsters really don't get punished. In addition, the
| bottom-feeding lawyers that enable them also don't get
| punished.
|
| A successful lawsuit against one of these fraudsters will cost
| you at least a megabuck. It's almost always more cost-effective
| to walk away with whatever payment you can threaten out of them
| than to actually file a lawsuit.
| xyzzy21 wrote:
| Here's a hint: if you are starting up ANY company involving any
| type of biotech or medical application and there are no people
| with STEM degrees running it or on the board, 90% chance it's
| fraudulent. STEM smarts is not something you get out of a
| crackerjack box. And especially NOT with biotech or medical.
|
| Exactly like with Theranos, ANYONE who invested in this and
| didn't see this coming or do enough due diligence to, simply
| deserves to be fleeced!! No sympathy.
| Thriptic wrote:
| Similarly, if the company won't validate their tech in peer
| reviewed journals, they are full of shit. I strongly suspected
| fraud years before it was acknowledged because Theranos was
| citing "trade secrets" for why they couldn't release any data
| about their tech. We don't do trade secrets in medicine or
| science, and this is precisely why.
| brianwawok wrote:
| There's no trade secret anywhere in US medicine? I can just
| walk in the factory and get a tour?
| Thriptic wrote:
| You are of course allowed to employ SOME obfuscation in
| research process, but you aren't allowed to shield your
| product and claims from scrutiny behind them. At the end of
| the day you have to validate that your product can do what
| you say it can do publicly through independent analysis,
| you have to run public trials against existing tech, and
| you have to explain how your tech works, which Theranos
| never did. They fought against scrutiny from the greater
| scientific community from day one; "just trust me it works"
| is not sufficient proof in science.
|
| This is one reason why we have the patent structure, so
| people can publicly disclose data for validation purposes
| and still make a substantial profit.
| nknealk wrote:
| The FDA can (and will) audit anything and everything you do
| for approved drugs/treatments. There are no trade secrets
| in medicine. This is why companies patent things. You
| literally can't hide information about something that's
| about to be FDA approved.
|
| As a result, the medical industry is less competitive than
| other industries. Also, it's seen as ethically dubious to
| compete on saving lives. Instead, there's a lot if in-
| licensing deals (see above re patents) as opposed to trade
| secrets.
| huitzitziltzin wrote:
| You can't walk into the factory but certainly you can look
| at a patented drug and get a formula, for example. The
| Wikipedia article about Sovaldi (sofosbuvir - a Hepatitis C
| drug) contains the exact chemical formula.
|
| Plus the clinical trial process is extensive. It would be
| much harder in the present regulatory regime to have a new
| BS prescription drug than a new BS testing startup, like
| this one or Theranos. ( _Old_ drugs are a little different
| - some were grandfathered into the current testing regime
| and evidence for their effectiveness is in some cases
| limited.)
|
| Certainly there are trade secrets in medicine, but not
| everywhere.
| beambot wrote:
| Chemical formula != Steps to synthesize...
| pedalpete wrote:
| Zach has a PhD in Biophysics and is a professor in Biophysics
| and Biochemistry.
| standardUser wrote:
| If anything, this is the exact opposite.
|
| This was a science company founded and run by scientists with
| little-to-no private sector experience.
| orthecreedence wrote:
| This is why I don't trust my feces with anybody but Smart Pipe
| [0].
|
| [0]: https://www.youtube.com/watch?v=DJklHwoYgBQ
| trhway wrote:
| >Apte and Richman married in 2019
|
| so Theranos. Having a couple in the leadership is among the worst
| things for the business. Any chance for even minimum reality
| check is gone, and instead there is synergetic self-misleadings-
| amplification and mutually reinforced bubble detached from
| reality. We had at some point an SVP and a chief architect couple
| - it was just a twilight, there was completely no way to subject
| business decisions to technical reality cross-check and vice-
| verse, and it was a hilarious show how the
| managers/PMs/directors/etc. were bowing down to that chief
| architect ...
|
| I though wonder - how and why would one do a scam in poop
| testing. I mean - why not just collect the poop and test it.
| Profit! Sprinkle some social on top and you have a fat unicorn.
| igammarays wrote:
| They should've claimed to be AI-powered, then nobody would've
| called their shit. Things get especially murky with AI, as no one
| understands it, and it's hard to prove outright fraud. I've seen
| this firsthand: a YC-backed startup I worked for which advertised
| an "AI-powered" background check literally was a bunch of if-
| statements and pseudo-random guesses which didn't even provide
| the same results for identical inputs.
| kergonath wrote:
| Powered by AI in the blockchain.
| osrec wrote:
| Don't forget to throw in a bit of machine learning and deep
| learning. And issue some sort of cryptocurrency while you're
| at it. That'll really bring in the investors.
|
| /s
| tmpz22 wrote:
| _cough_ Triblebyte _cough_ "AI-driven" recruiting
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