The dropout

I remember when Theranos was a thing. People gave me shit on social media for semi-publicly not believing in the Elizabeth Holmes wunderkind. I also didn’t believe in Transatomic and uBeam. All three transparently violated the laws of physics and chemistry. All three were headed up by mountebanks who short circuit the critical faculties of investors in the same way. They were all undereducated fair haired female nincompoops. They were all saying things I knew to be laughably false. It wasn’t obvious at the time that they were intentional frauds, and I think it is likely they all believed they could pull off their claims, but it was obvious to me their ideas wouldn’t work. Anyone else who passed high school tier physics and chemistry shouldn’t have been fooled either. Of course these are VC we’re talking about here, so they probably never did pass high school physics and chemistry.

I guess the investment thesis is anybody could found a company in their dorm room because, like Zuckerschmuck did it. Of course, Zuckerface basically copied someone else’s obviously implementable idea with zero technical innovations. His risks were all business execution; and he did a decent job at that, as he is a good businessman. Nothing he was trying to do was obviously false: Friendster even used the same color scheme as Facebook. Most founders and VCs have about as much insight into computers as they do into physics, which is to say, they don’t know shit from shinola. It’s difficult for them to understand when a computer thing is impossible, despite most of their investments being computer related. The idea is to invest in a bunch of things without too much diligence, because spending time and experts to evaluate claims has a high opportunity cost. The difference is that it’s a lot tougher to work around stuff like the 1/r^2 law than figuring out one of your core queries is NP-hard query and using metaheuristics to get a decent enough solution. Hence the profusion of “AI” startups who don’t really push the needle. VC is thinking “brain in a can,” founders are presenting slightly better MAPE at the cost of O(N^2) or something. Still, one of them might do something important, and your colleagues are all doing it, so you might as well kick them an investment. That’s the theory.

Successful founders and VCs are often psychopaths. I think they’re used to working with psychopaths. Fake it until you make it is a reasonable thing to do with software. I’m pretty sure Oracle didn’t have anything on its first sale (which was to the CIA, a psychopath heavy organization), so if you’re used to software, it seems sensible to invest in some wild eyed kid with an idea. For the world of innovative products made out of matter, this is false. Academics are useless in most software development; I can only think of a few places where even being able to read Knuth tier academic stuff from the 70s is useful. Not so in biochemistry. As the Steven Fry portrayed Ian Gibbins put it, you can’t really plan breakthroughs in science. You can build an organization more likely to succeed (Theranos evidently wasn’t even in the ballpark), but you can’t schedule when you’re going to be able to ship the thing you don’t know how to build without detailed and concrete intermediate steps. If you don’t have intermediate steps, you can’t plan it. Theranos didn’t have intermediate steps.

The actors and actresses in this show are very clever in their portrayals. We know Elizabeth Holmes at least acted this way in public. Her tics, manners, idiosyncratic slouches; very well captured. By contrast we know less about Sunny Balwani, who didn’t have the media megaphone. I don’t know anyone from the Valley who knew him, but I definitely know the psychological type portrayed in the miniseries. If you’ve seen the Silicon Valley TV show you know about the character Dinesh Chugtai. I won’t describe him here, but if you’ve worked in the Valley, you’ve met a Dinesh; just like all the other Silicon Valley characters -they’re stereotypes, and they’re real (I had a streak of Gilfoyle about me for part of my career). Similarly the portrayal of Sunny Balwani is a familiar character. Some Indian guys suffer from insecurities and do stuff like buy a Lambo to show what big swinging dicks they are, among other things, such as dating age-inappropriate bottle blonde women. Sure this sort of insecurity can manifest the same way across ethnicities, but everyone who has spent time there knows a Silicon Valley Desi guy like this. There is also a type who is a sort of cruel Machiavellian taskmaster: a few Indian people have told me it’s a regional or ethnic quality, but I have no idea how subcontinental ethnicities or regions work. If you spend enough time in the Valley, you’ve met a couple of Sunny Balwani types, and the portrayal was interesting and amusing even if the real Sunny Balwani wasn’t like that. The portrayal of Larry Ellison was pretty good too.

The abusiveness was not adequately documented. For example, it is well known that her dog would shit all over the company office and she’d make the little people clean up the dog shit. While they showed Sunny chimping out at the little people of Theranos, they didn’t show Miz Holmes doing the same thing; apparently her psychological abusiveness was of similar timbre.  Perhaps she got it from her idolization of Steve Jobs, who was similarly abusive, and doesn’t get the credit he deserves for being a complete psycho. I suspect normies wouldn’t think this level of abuse is realistic,  but silicon valley is filled with clownish, ridiculous levels of psychological abuse that are so extreme, a realistic portrayal would seem like a parody.

One of the things which struck me after watching this; if Theranos had found some revenue stream to keep them alive in 2019, they probably would have “succeeded.” Essentially all of the “cures” for the covid problem were baloney. Biomedical research companies jumped the shark in 2020: they realized by bribing enough politicians and media outlets, they could sell any sort of “science juice” -with redditors gleefully St Vitus dancing along with it. Even a miserable fraudulent slave-pit like Theranos should have been able to manufacture some bullshit test strips, or some expensive cod-solution such as Pfizer blessed us with, ginned up with fraudulent statistics and buoyed by FDA and CDC malfeasance. Nobody would have noticed; Holmes would have been praised as a savior by the entire establishment, and everyone would have forgotten about their blood testing machines in the ensuing hysteria.

Anyway this docu-drama is a fun thing to waste time on for those who are interested in Silly Con Valley culture and its follies. People who have been in the trenches will find a lot of familiar guidestones. Many successful software businesses were/are as dysfunctional and shady as this and run by the types of cretins portrayed here. Buyer beware if you come across one dealing with matter.