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When start-up culture fails – the problem of Theranos

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Elizabeth Holmes is on trial in California for allegedly defrauding investors, but Silicon Valley’s “fake it till you make it” culture is also under the microscope.

Elizabeth Holmes founded Theranos at the age of 19. A Stanford University drop-out, Holmes committed the early years of her life to building her company from the ground up.

She dazzled investors and colleagues with the revolutionary idea that Theranos technology could quickly detect a multitude of ailments and diseases, all from the blood of a simple finger-prick.

By 2014, the firm had rocketed to a valuation of US$9 billion after securing large investments from high-profile figures like media tycoon Rupert Murdoch, and former U.S Secretary of State Henry Kissinger.

Holmes was championed as a star of Silicon Valley – a young woman with an unfaltering belief that Theranos could change the world.

That dream however, was based on fantasy.

In 2015, Holmes was exposed as a fraud. The technology she touted did not work at all, and three years later, Theranos collapsed.

Holmes, now 37, is on trial in California – facing up to 20 years in prison if found guilty of the 12 charges of fraud brought against her.

She has pleaded not guilty.

The court case and her meteoric rise and fall has attracted global interest, with many divided over the question of whether Elizabeth Holmes is merely a businesswoman who failed, or a fraudster who intended to cheat her way to the top.

Spectacular collapse

Over the decade from its foundation in 2003, Holmes built a team of 800 employees and set up in a research park in Palo Alto, once home to Tesla and Facebook.

It was there the company went to work on its flagship technology – the Edison – a small, black automated box intended to run lighting fast methods of drawing blood, testing blood, and interpreting patient data.

A series of Wall Street Journal exposes in 2015 revealed the results produced by Theranos tech were unreliable, and that the firm had been operating commercially available machines made by other manufacturers for years.

Theranos’ already unstable foundations quickly crumbled.

Lawsuits from defrauded investors piled up, ties were cut, and by 2018, the company dissolved.

In March that same year, Holmes settled civil charges from financial regulators that she fraudulently raised more than US$700m from investors.

But three months later, she was arrested on charges of criminal fraud. Also arrested was Ramesh “Sunny” Balwani, Holmes’ ex-boyfriend and business partner, who will face the same charges.

Ex-Theranos CEO Ramesh “Sunny” Balwani was romantically involved with Elizabeth Holmes, and faces the same charges.

In a twist, it has emerged over the course of court proceedings that Holmes and her lawyers are expected to argue that Balwani, who served as Theranos’ CEO, sexually and emotionally abused her during the time the crimes were committed – claims that Balwani vehemently denies.

Prosecutors claim Holmes and Balwani engaged in a “multi-million-dollar scheme to defraud investors, doctors and patients.”

It’s alleged they used advertisements and solicitations to encourage doctors and patients to “buy-in” to Theranos’ blood-testing services, despite knowledge that their services were simply not capable of doing what they said they could.

Court hears of company’s failures and lies

Holmes’ court case began in September, and is expected to last for the coming months.

Theranos gained financial traction through investments from several high-profile figures, who also made up the company’s 12-person board, but lacked necessary medical experience.

It was heard that former U.S. Education Secretary Betsy DeVos, who sat on the board, was given false information before investing US$100m into the firm, her representative told the court.

DeVos is but one of several notable people allegedly duped by the firm.

Betsy DeVos was Education Secretary under former president Donald Trump.

Wade Miquelon, the former chief financial officer of pharmacy chain Walgreens, testified that the company was impressed by due diligence reports from big pharma firms Pfizer and Schering-Plough that Holmes had allegedly faked, and went on to partner with Theranos and invest US$140m.

The culture of secrecy and deceit was endemic at Theranos, from the board to its employees – who have told the court of poor work conditions and fears of legal repercussions if they spoke out.

Sunil Dhawan, who served as Theranos’ lab director in 2014-2015, testified that he had only been to the firm’s labs a handful of times, and rarely interacted with its technicians.

Erika Cheung, the former employee who made the initial report to regulators in 2015, took the stand recently to tell jurors she was “starstruck” by Holmes, but quickly grew uncomfortable with the company’s practices.

Questions arose about the accuracy of test results, after a test performed on Cheung’s own blood samples wrongly determined she had a vitamin D deficiency she knew she did not have.

Theranos’ story emblematic of a larger problem in Silicon Valley

Many see Holmes’ downfall the result of an environment in which faulty ideas are allowed to flourish, and where failure is seen as a necessary obstacle on the path to success.

“This is what happens when you work to change things,” Holmes told CNBC in 2015.

“First they think you’re crazy, then they fight you, then you change the world.”

People with a close eye on the trial say it is remarkable how tightly Holmes has clung to her version of events.

Her lawyers have told courts she has been grossly misrepresented, and that Holmes is a hard working, honest businesswoman, who never had any intention to commit fraud.

Nevertheless, Theranos’ monumental failure speaks volumes of a warped value system in Silicon Valley.

Phrases like Mark Zuckerberg’s famous motto “move fast and break things” and “fake it till you make it”, express the idea that in order to achieve success, you must “disrupt” the normal or traditional ways of doing things,

“Problems in the product are easy in Silicon Valley, a working technology demo is always several agile sprints away using iterative prototyping; at least that is what many of us have been brainwashed to think,” a former Theranos employee told the Washington Post.

“At Theranos this was the philosophy.”

More than 200 potential witnesses have been identified during the court proceedings; the case grows more complex by the day, with several jurors excused for financial hardship, legal fears, and in one bizarre instance: playing sudoku in court.

This risks the possibility of Holmes’ trial ever reaching a verdict: one which the world is anxiously waiting for.

Tech

Iran cuts internet access over “hijab violation”

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Iranian authorities say they will restrict internet access in the country until calm is restored to the streets

Protests over the death of a young woman in the custody of the morality police continue to rock the Islamic Republic.

Thousands of Iranians have taken to the streets in protest since the death last week of 22-year-old Mahsa Amini, who was apprehended in Tehran and taken to a “re-education center,” apparently for not wearing her hijab properly.

Amini’s death has sparked outrage among Iranian women, who have long been subject to repressive rules mandating their dress and behavior.

In recent years, the government has stepped up its enforcement of these rules, with morality police attacking women for offenses such as wearing loose headscarves or talking to men in public.

The death of Amini, who was reportedly beaten in custody, has galvanized young Iranians who are fed up with the repression they have faced for their entire lives.

In addition to taking to the streets, they are using social media to spread the word about the protests and to call for an end to the government’s oppressive policies.

It remains to be seen whether the current wave of protests will lead to lasting change in Iran. But one thing is clear: the country’s young people are no longer willing to tolerate the status quo.

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Tech

Video game actors are worried that they’ll replaced by AI

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A new generation of video game characters are being created, and they look eerily lifelike.

Powered by artificial intelligence (AI), these digital avatars can learn and adapt, making them more realistic than ever before.

As a result, some video game actors are worried that they may soon be replaced by AI technologies.

While it is true that AI characters can be created relatively cheaply, they still require a lot of work to create and animate.

In addition, they lack the emotional range and subtlety of human actors. As a result, it is unlikely that AI will completely take over the role of video game actors anytime soon.

However, it is possible that AI could be used to augment or supplement human performances in the future.

For example, an AI character could be used to create a basic motion-capture performance that could then be refined by a human actor.

Gaming industry

Whether or not AI technologies will have a role in the future of video games remains to be seen.

However, one thing is certain: the gaming industry is changing rapidly, and all those involved will need to adapt to stay ahead of the curve.

However, it’s important to remember that AI is still in its early stages of development, and it’s not clear how far it will ultimately be able to advance.

For now, video game actors still have a valuable role to play in the industry.

Their experience and performance brings a human element to video games that simply can’t be replicated by AI.

As the technology continues to evolve, it will be interesting to see how it affects the role of video game actors. But for now, they can rest assured that their jobs are safe.

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Business

YouTube to start sharing its ad revenue from Shorts

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If you create Youtube videos here’s some welcome news for your wallet

YouTube will start sharing its ad revenue.

It’s no secret the platform has been focusing in on shorts and so have its creators 

As it tries to compete with TikTok, YouTube has announced it will release a new revenue-sharing model for creators of popular short-form videos.

So starting next year thee company will pay a portion of is revenue based on videos that get the most views.

YouTube said that every month it will pool together ad revenue from Shorts.

Of that sum, an undisclosed percentage is allocated to creators, and YouTube will pay them 45 per cent of that amount.

YouTube’s growth rate in the second quarter was the slowest since Alphabet started breaking out the unit’s revenue in 2019.

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