From Puritans to Silicon Valley: The Risky Business of False Promises and the Importance of Integrity
Two years ago, I read the book Bad Blood: Secrets and Lies in a Silicon Valley Startup, and I couldn't believe what I was reading. It was about Elizabeth Holmes, the new Steve Jobs, who invented a machine that could take a blood test with just a drop of blood. It was fake, but she became a billionaire - at least for a few months.
In a business, you always face the challenge of balancing risk. Startups have the advantage of high revenue while taking a lot of risk. But if you're a player, or at least willing to accept that risk, then it's a fair business.
Last year, I was traveling a lot in the United States, as I gave some lectures there. To best understand my audience, I did a lot of literature research to understand "the Americans" (if there even is such a thing). The history of the United States dates back to the arrival of the Puritans in the early 17th century. The Puritans were a religious group that had separated from the Church of England due to disagreements over religious doctrines and practices. They came to America to gain religious freedom and establish a new society based on their beliefs. The Puritans played an important role in shaping the early history of the United States. They believed in hard work, education, and community, and their values helped shape American identity. The legacy of the Puritans can still be seen in many aspects of American society today, from religious and cultural traditions to the emphasis on individualism and self-reliance - and even in the fact that Americans are willing to take a higher risk if it means earning a higher income. This is the reason for Las Vegas and the strong funding of startups in Silicon Valley (OMG I'm actually comparing Las Vegas to Silicon Valley).
But what has happened now? Startups have recently improved their odds by giving false information to investors. Investors in Silicon Valley are now scrutinizing startups' claims more closely as funding for cash-strapped startups dries up and the downturn in the tech industry exposes those who took the "fake it till you make it" ethos too far. In recent weeks, several startup founders have been accused or found guilty of fraud, including Charlie Javice of Frank, Rishi Shah of Outcome Health and Elizabeth Holmes of Theranos. Other fraud trials, such as those against Manish Lachwani of HeadSpin and Sam Bankman-Fried of FTX, are scheduled to begin later this year.
In my opinion, this is a good thing because it will increase trust, integrity and compliance in this industry. It's even better for us as a company, because right now there are startups with no assets but incredibly high valuations that may be based on false beliefs that will never come to fruition.