Theranos, Facebook, And Unicorns: Why The Real Problems Have Just Begun In Earnest

Currently there are two stories emanating out of Silicon Valley. First there is the Theranos™ debacle where it’s been reported that basically everything you thought about the company from both its founder, right down to the technology, has been more of a sham than breakthrough. The other is the current brouhaha concerning conservative media and Facebook™ supposed willingness, or intent, as to suppress it. Whether selectively or passively.

Although the basis and the charges for impropriety are different. From my viewpoint: the consequences of both companies actions may have far more similar consequences in the end than some realize. Let me explain…

I have to start with Theranos, for this latest revelation helps put into light the overall meme of what has been transpiring throughout much of what we now generalize as “Silicon Valley” and in-particular: the tech space and its “unicorn” stable of future IPO derby candidates.

There has been far more written, as well as, to be written about Theranos. However, in a nut shell, what we’ve learned over the past week has been nothing short of breathtaking. i.e., It’s all but a complete sham.

I use “all but” for a reason: for as it’s been reported; out of the 200 or so tests that were supposedly made available via their Edison™ machines – only 12 or so were done via this method. The rest? Outsourced to companies using current technology and accepted practices. As far as it’s unicorn valuation metrics? I have a feeling “sham” will be a term used heavily in what can only be assumed a litany of upcoming SEC investigations. Not withstanding what usually follows: the criminal. Remember – it’s one thing to mess with and/or lose people’s money – it’s quite another to do the same with their health where lives are at risk.

This story is important to the whole because of what it brings to bear for helping others to better understand the whole “Silicon Valley” narrative or meme. e.g., It’s founder and spokesperson Elizabeth Holmes and the fawning over not only her, but the seemingly unquestioned jettisoning of business inquiry to the metrics, and replacing hard numbers or facts with fairy-tales and rainbow type thinking or examples as its legitimate replacement.

To get a glimpse into just how far what I like to call “breathing rarefied air turning into one’s own exhaust fumes” you need only look back just under 2 years ago when she was the darling of not only “The Valley” but also media in general. No where is this more apparent in her demeanor, but also, her “story” telling then at her 2014 TEDMED™ talk.

I believe it’s important to watch this talk in-particular for two reasons. First: Knowing what one knows now; you can’t watch it without being aghast at the level of not only insincerity but, (and this is a very big but) the outright peril she may have in fact placed the pregnant woman she described that came to her facilities for testing. And second: Now that you know what you do – is it not more obvious that people wanted or needed to believe for the sole purpose as to keep the dream (IPO) alive?

Now I give talks and speeches for a living. I also know what it is to be asked and put on stage in-front of some of the largest global corporations in one’s field and deliver news that none of them want to hear. (i.e., The medical field does not look kindly to outsiders telling them they have a better way. TEDMED or not.)

And I know from first hand experience the one thing you do not employ to get your point across is some canned speech with all its story note markers, canned hand movements and eye contact. You look about as phony as phony can get. And an audience can sense it a mile away. Unless – they don’t want to. And by looking at the subsequent press articles and talks given by Ms. Holmes since that speech – “didn’t want to” seems to fit the bill most accurately. (for those wondering – I was asked to give a speech years ago at a national conference when I was then running a company and making news that caught their attention. At the conference I warned of the possibility of an impending market crash in my field. After my speech I thought I would need armed security to reach my room. For if stares were daggers – I was the proverbial pincushion on stage. Just weeks later – the market did crash wiping out $Billions in value and more forcing some of the very attendants into outright bankruptcy.)

I say this because I now want you to think about every other speech you’ve watched as of late given by many of “The Valley’s” tech crowd. Hint: They are all just about the same. In other words formulated, prepared, gobbledygook that says nothing – and means even less.

Remember: Watch the Ms. Holmes speech (or however much you can stomach) then go to your search-engine of choice and watch one of Mark Zuckerberg’s or any other Valley high flyer of late. What is almost impossible to move past once you do is the uncanny resemblance they all have in both presentation, as well as, “story” telling. They all have the same formulation, as well as, stage presence. To my eye they’re so similar it would not be unreasonable to believe they were all schooled by the same speech coach. (if they were at all for I don’t know, it’s just an assumption)

Now I’m not trying to say the Theranos scandal and Facebook’s current “conservative” issue are the same. However, what I am trying to do is present some very striking, more often than not, overlooked details which not only get missed, but also, may hint at some insight of what might also portend once things (things being accusations with the weight of law) hit certain stages. For the way they handle subsequent accusations and more give ever more clues than may otherwise be first noticed. But – you have to watch with fresh eyes, rather than, just blindly accept; as has previously been the case.

Currently Facebook is in an all out (or at least what they want to be seen as) public relations dilemma with Conservatives. In particular: to the calls of censorship.

There has been quite a few stories written and told about the whole fiasco. This week also saw what was touted as “a meaningful meeting” between some of the more known conservative writers or speakers. What transpired and what was resolved is anyone’s guess for it’s also been touted there was a rather specific non-disclosure agreement needing to be legally bound to in order to attend. And it is precisely here I am going to make a statement which I’ll explain as we go on, and it is this:

If you think this is where the offending argument lays – you just aren’t paying close enough attention.

This (in my opinion) is a “look over here” part of both misdirection, as well as, to help build any evidence for defense that may be needed if the real “conservative” nightmare plays out in a way of charges which Facebook itself thought (or acted as if) it was immune to. i.e., Accusations of underhanded business practices which effected businesses unfairly, as well as, adversely that may need to be both defended against in court. And/or monetary damages to plaintiffs are possibly awarded.

The more I looked at who was invited, where, and the format – the more I saw PR text-book damage control (which is really useless when administered in such fashion) and more “discovery” and “narrative setting” for Facebook if or when needed in the future.

Without being coy I’ll state precisely how I saw it. Whether you agree or not is up to you…

I saw the attendees in this light if I were at Facebook: Glenn Beck: he knows probably better than anyone else if what we say is believable or not. We need to see how he takes what we say as credible or not. And why. Next: A Trump official: We’re on the record (in particular Mark himself) as not caring for Trump or his message. We need to know how they’re taking this. And just how much we need to possibly worry about retaliation if he does get the votes. Dana Perino: We need to know what are the instinctive reactions of a press secretary for a republican if they may hold the office next.

The others in my view were just filler (no disrespect to anyone intended, just a bigger picture view that’s all) to maybe add more weight to already existing thoughts. And it was based out off this reasoning, for if I’m Facebook and I grasp what truly might have the potential to snowball and play-out – I want to know the following as quickly as I can…

Will a media guy with true insights into media (love him or hate him his media accomplishments have weight,) a former republican press secretary, as well as, a high-ranking official from the potential republican nominee which now has shown a real possibility of winning believe our story?

If so: it’s possible we might have a chance to show or demonstrate: “We didn’t intentionally do anything wrong and when we found out? Well by golly we invited these people right here up to our offices to help us figure out how something like this should never happen again by golly, gee whiz!”

In my view, this is the real reason for if, or when, any court “discovery” sessions need take place as to possibly help cut this all off-at-the-pass before it gets ahead of them.

Again – this is where the real trouble for Facebook lies. And – it’s just beginning. (again – all in my opinion.)

Forget Facebook and the whole “conservative censorship” narrative for the moment. It’s only relevant to the bigger picture (or trouble) Facebook may face, for it’s just the straw that broke the camel’s back, or said differently – the straw that brought the light, as in spotlight.

No, the story here, and its implications to watch is the one being brought forth by comedian Steven Crowder. This is where Facebook could find itself in real hot water. And the current real problem Facebook would love you to either not notice or, forget. So don’t look for it in your news feed or trending topics…just saying.

Now why do I say this one may ask. Well, it’s for this reason:

As I see things, Crowder used Facebook for business purposes. He also paid (as in actual monetary payments) to Facebook for the sole purpose to help grow or maintain his brand. He paid (that word “paid” is where everything changes and hinges) Facebook for that help. If Facebook was taking his money while simultaneously suppressing either his content or, the viewership that was implied he would reach? All while he was being told (or sold) something different? There’s a term for that and it’s called: a criminal offense.

Now there’s more to this story and is explained by Mr. Crowder himself on his website. (here’s a link directly to it) Here he also explains how he could not get an answer about his account or his payment history. That issue is also very contentious because it puts both your business credit at risk, as well as, possibly your personal life causing a sea of nightmarish paperwork, filings, and affidavits to resolve. If you can in a timely manner, and, better hope one didn’t have a pending loan approval process open at the same time either.

The issue here as insinuated by Mr. Crowder, “nobody could be reached as to resolve.” He basically found himself connected to a disconnected phone when it came to trying to contact Facebook. I feel for him and understand his frustration for I had a similar issue years back with another of these platforms. It’s one of the reasons as I explained during the incident why I would no longer use these platforms and warned others of the same. Getting hold of someone as to try to resolve an issue makes getting answers at the DMV look instantaneous and friendly by comparison. If you get one at all that is.

So again, here is where the real issue lies for Facebook, and where this once seemingly “small” incident may have far larger implications. And it’s with questions or observations such as this…

What the Crowder suit opens up is a Pandora’s box of discovery claims that will surely come forth by others. And by “others” I mean entities that may have spent extraordinary large advertising dollars with Facebook. Not withstanding everyone else that ever spend $1 dollar.

It is well-known that advertisers have been less than enthused with the results they’ve received via Facebook advertising runs. Don’t take my word for it, you can find story after story across the web. I have posited Facebook has been more of the “nothing else is working might as well go there” recipient, as opposed to, “This platform is an advertisers dream come true!” Much like AOL™ was at the tail end of their dominance as an “eyeballs for ads” player.

And here is where the word “discovery” correlates into an impending headache (more like severe migraine) for Facebook. And I believe Facebook may not in fact yet grasp just how much trouble may be on the horizon.

For this isn’t about some free service “user agreed” boilerplate sign off indemnifying them from potential “oops, sorry about that, but don’t forget – you signed off in saying: we can’t be held responsible” No, the difference here is for the possibly that Facebook actively sold, then required payment (as in money) for that access, to a potential audience. If they did that all while knowing that “audience” as well as “the payee” themselves were being suppressed? Do you see my point here?

How many lawyers do you think are lining up or burning the midnight oil contemplating how they’ll attract others for a class action? Think about it. Is it unreasonable to think you won’t start seeing ads on late-night TV or business channels stating things like “Did you pay money only to see no results on Facebook? You may have a legal right to join our…..” See what mean? And that’s just the beginning in my opinion.

Think about if you’re a large organization that had little to mixed results with a recent or number of ad campaigns with Facebook. Do you sit there and look at all that red ink left in your advertising budget from a poor showing of results in corresponding sales because it was the cause of your poor ad design? Or, was it because you now believe (whether correctly or not) your ads were possibly not shown to what you deemed was your target audience: conservatives. Or, even others? For if it is proved they suppressed or adulterated one group – why could they not have done the same with another which you paid to be in front of?

Only one way to find out: sue for discovery. See how easy it is to escalate or conflate? Again, a class action or just plain business lawyers dream come true in my opinion. I’m also of the opinion – those inquiries will come even faster if any said “wronged” parties just happen to have their own in-house counsel, or, on retainer.

I can’t stress this point enough, remember: If someone is selling you an audience and making claims about your ability to reach that audience, then charging you and accepting payment for precisely that. And – at the same time – there are people employed by them actively suppressing content and more within that very group (even if it is only a portion) which could affect the results for cost and benefit without it being openly disclosed? What else have you told (or sold) me that I need to find out about that might have harmed me?

See what I mean? This is business. And once you make a claim, accept money for that claim, and deliver what a court may find “different?” Everything changes. And this is where the real story is to watch in the current Facebook/Conservative story. Not whether they should, would, or did suppress. They’re within their legal right as a private company to do that regardless if anyone likes it or not. But if you take payment for something and deliver something that is not exactly what one may have described (i.e., access to X,Y,or Z) because you are fiddling with those parameters in-house? And not stating that potential clearly to those paying customers? It’s a class action lawyers dream come true is all I’m saying.

Which brings me back to the third leg in this Silicon Valley “run for the roses” saga involving another type of equine: Unicorns.

I took a lot of heat from many a “Valley” aficionado when I called out the lunacy of what I felt was more of an “investor” based decision as opposed to an outright “business” decision when it was announced Jack Dorsey would head-up both Twitter™, as well as, Square™ as their CEO simultaneously. Here’s an excerpt, to wit:

“The only reason any company with potential for either real growth, let alone possible explosive styled growth (which in the Valley is the only metric that still matters) would pick (if not outright beg) an executive that can only devote 50% of their resources to run a once high-flying song bird which desperately needs direction – reeks desperation.

No one else in all the world let alone Silicon Valley was up to the task? A multi-BILLION dollar publicly traded enterprise on the forefront of all that Silicon Valley represents can’t attract any other CEO talent who could devote 100% of their abilities? This makes absolutely no sense what so ever unless: the board, as well as many investors are panic-stricken on just how bad things are behind the scenes and figured; the best they could do was to bring (or convince) a person such as Mr. Dorsey back on as CEO, spin the narrative as much as humanly possible, and pray Wall Street buys it. Literally.

Second: How does Square do the same to that circle where it itself is getting ready to IPO? I can not imagine for the life of me any serious business person, of any stature, that would postulate it would be a good idea to let its CEO devote 50% of their resources away from their now chosen organization at such a critical juncture. Not only that – to then reach back and devote the remaining 50% and try to mend the broken wings on a clearly fumbling entity. Unless – the decisions were all driven by intermingled investors between the two. In other words: This is all about saving stock (or IPO) values or, cashing out valuations. Not about saving or revitalizing a company. Or, for that matter – what Square will or might be after its IPO debut. Something here just isn’t right.”

Within that excerpt is what I feel is the underlying issue that is about to be fully exposed, as well as, destroyed in the very near future: i.e., Many “unicorns” have ceased to have been race worthy a long time ago, but the narrative has been desperately held up reminiscent of a Potemkin village for these last 18 months or more with hopes, prayers, and breathtaking fairy-tales bordering on outright fraud in hopes that maybe, just maybe, they’ll make it to an IPO and shed all that dead weight of having to holdup this house-of-cards pretension any longer.

It’s quite possible not only is that race never going to restart. It may be found that in fact unicorns, no matter how vivaciously curated a narrative – have been lying dead in the gates longer than many even realize. For if there is one thing this whole Theranos and Facebook debacle has unleashed it is this:

As I’ve stated many times before: “The damage isn’t in only what someone does too you. It’s the way you now have to treat everyone after is where the real damage lies.”

And the questioning of how and why a “unicorn” remains one, along with, how and why one spent money with today’s so-called “eyeballs for ads” platform leader have only just begun. And the resulting damage to a whole lot of “unquestionable” narratives are about to see something they haven’t possibly seen ever…

A whole lot of tougher questions followed with a demand for answers that have the weight of law and monetary consequences behind them.

© 2016 Mark St.Cyr