Theranos Fails the Test
Theranos’ precipitous fall offers lessons for NewCos and their investors. A Conversation piece by Norman A. Paradis, professor of medicine at Dartmouth, includes all the usual we-should-have-seen-it-coming roundup of the facts. But near the end of Paradis’s article is one crucial warning sign that even those not steeped in the world of medical devices should have caught. Theranos insisted it had to operate in extended stealth mode to keep a competitive advantage, which meant it didn’t publish peer-reviewed studies. In other words, you had to trust. You couldn’t verify. This fact was further compounded by a lack of anyone with deep knowledge of medical testing on Theranos’ board. That will likely turn out to be a disaster for the investors. We’ll never know what the company could have learned and corrected for had it followed a more open approach.
A Country of Two Cities
Well, two kinds of cities, anyway. American cities grow in one of two ways: up or out (Fast Company), according to an analysis by contractor broker Buildzoom. Cities that stop expanding get too expensive for most people (hello, San Francisco!); cities that sprawl keep housing prices under control as the notion of a city center turns more diffuse.
If Capitalism Drives Off a Cliff, It Will Do So Without Any Help
Sometimes the most provocative ideas come wrapped in the silliest metaphors. Capitalism and communism are not at all “like Thelma and Louise; a tragic couple sent over the edge by forces beyond their control,” as Eric R. Weinstein, managing director of Thiel Capital, puts it in his Edge essay Anthropic Capitalism And The New Gimmick Economy. Weinstein maintains that the key economic question of the moment is: “Is society now focused on market capitalism because it is a fundamental theory, or because we have just lived through the era in which it was possible due to remarkable coincidences?” He maintains that since “there is as yet no known alternative to market capitalism,” agencies that publish official statistics will feel compelled to make it seem like market capitalism is working, doing so “by manipulating whatever dials can be turned by law or fiat, giving birth to an interim gimmick economy.” That may be true, but if market capitalism is headed over the cliff, it’s not because of anything communism did to it. It will be the author of its own demise.
MakerBot Stops Making Bots
Bre Pettis, one of the founders of MakerBot, was proud of building the 3D-printing pioneer in Brooklyn and his company signed a big lease to make things there. After a rollercoaster ride (funding! Wired cover! executives pushed out!), the company was sold in 2013 to Stratasys. We’ve now reached perhaps a final act, in which the new owners lay off 20% of remaining employees (its third round of layoffs since the sale), close the company’s retail locations (as well as its Brooklyn location), and will no longer make its own 3D printers, opting to outsource, a vividly bad piece of news for a company so closely associated with the DIY ethic. Many NewCos want to get bought. But when you do so, you’re subjected to the business realities of a big owner. And that can mean your new home isn’t a place where your original dreams can come true.
Are You Ready for Some Earnings-Season Overreaction?
For all the talk about thinking long-term, too much of business still thinks in 90-day increments. Later today, two of the tech companies everyone likes to talk about are announcing quarterly results. Many eyes are on Apple to see if it continues to make the case for itself as a services company while overall sales decline and the Watch, now a year old, hasn’t met breakout expectations (CNBC). Expect an apocalyptic headline or three, but worry about Apple in the short term; even with a decline in sales it is expected to have sold more than 50 million iPhones in the last quarter. Twitter, which also announces after the markets close, might be a better candidate for your worries (re/code). If last quarter’s drop in users was a one-time thing, analysts will focus on revenue figures, which are expected to be pretty good. If not, expect a lot of prophecizing of doom, much of that opinion published or promoted … on Twitter.
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