Theranos: Fact or fiction?

How Elizabeth Holmes is channeling Steve Jobs.

I just watched the Steve Jobs movie and he pulled it off, he created a Reality Distortion Field, got fired from Apple, and then survived the fallout that is inevitable when you suspend reality by eventually returning to Apple and well we all know the rest of the story now don’t we.

Sadly his story is a one in a million story.

In hindsight it’s really hard to blame Steve Jobs for his passion and obsessive single mindedness, and it follows that one should not blame the Theranos Founder Elizabeth Holmes for her passion and single mindedness either.

But consider this…

…it is the absolute number 1 responsibility for investors to vet their Founders and vet their products before they invest…

Does anyone think that the investors did this with Theranos? I think it’s become clear that they bought into the hype and the dream and now that the dream is becoming a nightmare, well who is holding these investors accountable? Will we see board members resign or get fired off the board, will someone who gave these investors the money to invest call a news conference and demand that heads roll over such poor investing discipline?

We all know that none of this will happen. Which is more of a concern to us all than the talk of a bubble, and high valuations. No, it is the underlying structural weakness caused by poor investing basics that we should be concerned about, and specifically that nobody making dumb investments will lose their jobs over this, or (gasp) have to pay back their inflated salaries.

I also just finished watching the big short, (holidays are a good time to catch up on movies) and like the mortgage crisis, where big banks made money while literally destroying the very foundation of our country, and nobody was held accountable for their stupidity. (The bankers just took a few years off in the Hamptons and then came back as another version of their transaction fees self.)

Well i see the same trend here with many venture investors, invest now and let someone else worry about what happens a few years later.

So my question is…

…who loses when a company implodes with a super high valuation and returns little or nothing to shareholders? Do the Board members, do the VC’s who made the investment? Or does the little guy, the teacher from California whose pension is now worth less?

Does that sound like we learned our lesson from the mortgage crisis?