October 20, 2021

In Silicon Valley, Criminal Prosecutors See No Evil

“Silicon Valley is a lot cleaner today than when I started, during the 1990s dot-com bubble,” said Reed Kathrein, a San Francisco lawyer who successfully sued Ms. Holmes and Theranos in 2016 on behalf of investors. “Everyone is throwing money at these start-ups. Everyone thinks they’re going to win the lottery. It’s easier to be honest.”

Reforms prompted by the collapse of WorldCom, a long-distance telephone company, and Enron, an energy company, in the early 2000s have also had an impact.

“Some of the changes in laws, like the Sarbanes-Oxley Act, put the screws on the accountants,” Mr. Kathrein said. “They have to do their jobs now.”

Thirty years ago, the tech industry was known as much for physical products as for software. Indeed, software used to be a physical product. If sales were not going well, that offered possibilities for subterfuge.

MiniScribe, a Colorado disk storage company that had fallen on hard times, was taken over in 1984 by Hambrecht Quist, prominent Silicon Valley financiers. The investment firm pumped in money and installed its own management. In 1988, to keep its numbers up, MiniScribe managers packed 26,000 bricks into MiniScribe boxes and shipped them to Singapore. When the scheme was revealed, the company went bankrupt and the chief executive went to jail.

In this sense, Mr. Kathrein noted, Ms. Holmes’s case was a throwback. She was charged with making false and misleading statements to investors that Theranos’s proprietary analyzer, named Edison, was a medical marvel that could perform a full range of clinical tests. It could not.

“She was shipping bricks,” he said. A lawyer for Ms. Holmes declined to comment.

Mr. Kathrein’s conclusions are not widely accepted. Asked if tech people had become more honest over the decades, Margaret O’Mara, a historian of Silicon Valley, burst into laughter.

Article source: https://www.nytimes.com/2021/09/07/technology/silicon-valley-prosecutions.html

Schemer or Naïf? Elizabeth Holmes Is Going to Trial.

Her high profile presents a challenge in finding jurors who have not formed opinions about her or the case. Jury members filled out a 28-page questionnaire outlining their media consumption, medical experiences and whether they have heard of Ms. Holmes or seen her TED Talk. About half of the more than 200 potential jurors had consumed media related to the case, according to a court filing last week.

It is unclear whether Ms. Holmes will take the stand to defend herself. As Theranos’s chief executive and chairwoman, she was persuasive and inspiring. She fiercely defended Theranos and dismissed any criticism as a sign that the company was changing the world.

But if Ms. Holmes takes the stand, prosecutors could use past statements to hurt her credibility. In a Securities and Exchange Commission deposition in 2017, she responded to questions by saying “I don’t know” at least 600 times.

“It will be hard for her to say, ‘I remember it this way,’ when she said ‘I don’t know’ so many times,” said John C. Coffee Jr., a professor at Columbia Law School who is not involved in the case. “That is the most damaging evidence against her.”

By the time the United States indicted Ms. Holmes in 2018, the once high-flying Theranos was all but dead.

Ms. Holmes founded the start-up at age 19 in 2003 and dropped out of Stanford soon after. She hired Mr. Balwani in 2009 and raised more than $700 million from investors, valuing Theranos at $9 billion. The Palo Alto, Calif., company struck deals with Walgreens and Safeway to offer its blood testing in their stores. It also attracted dignitaries, senators and generals — including George Shultz, Henry Kissinger, William Frist and James Mattis — to its board of directors.

“We’ve reinvented the traditional laboratory infrastructure,” Ms. Holmes said at a 2014 conference. “It eliminates the need for people to have needles stuck in their arm.”

Article source: https://www.nytimes.com/2021/08/30/technology/trial-elizabeth-holmes-theranos.html

‘Nos complica la vida’: muchas empresarias deben soportar las comparaciones con Elizabeth Holmes, la fundadora de Theranos

Beth Esponnette, fundadora de Unspun, empresa de pantalones jeans hechos a la medida, comentó que los inversionistas muchas veces la han alentado a ser más agresiva, a optar por acciones que bien podrían rayar en la deshonestidad. En una ocasión, un inversionista le recomendó inflar sus perspectivas de beneficios por un múltiplo de 10, un nivel de lo más irreal.

El mes pasado, Esponnette publicó un ensayo titulado “I Get It, Elizabeth Holmes”, en el que describe este tira y afloja. Muchas de las acciones de Holmes fueron inexcusables, escribió Esponnette, de 33 años de edad. “Pero de cualquier forma pienso que estaba convencida de que hacía lo correcto y solo seguía la recomendación universal de Silicon Valley: ‘Finge hasta conseguir el éxito’”.

Varias mujeres que trabajan en empresas emergentes del sector tecnológico le escribieron para agradecerle por escribir sobre los sentimientos que comparten muchas de ellas, afirmó Esponnette.

Lola Priego, de 30 años, fundadora de Base, una empresa que ofrece análisis de sangre y saliva en el hogar que luego son procesados en laboratorios tradicionales, dice que escucha una comparación con Theranos al menos una vez a la semana. Las referencias provienen directa o indirectamente de socios potenciales, asesores, inversionistas, clientes y reporteros, dijo.

Priego afirma que entiende la necesidad del escepticismo porque las nuevas empresas de atención médica deben ser analizadas de manera crítica para prevenir la negligencia. A menudo, las comparaciones se detienen después de que la gente se entera de que Base trabaja con Quest Diagnostics, una empresa multinacional, para realizar el análisis de sus pruebas.

“Pero el sesgo y el escepticismo adicionales son difíciles de superar”, dijo Priego.

El mayor golpe vino de un asesor científico a quien Priego intentó contratar en 2019. El asesor asistió a la reunión para decirle que llevar la tecnología al cuidado de la salud estaba perjudicando a la industria, al igual que sucedió con Theranos. Eso hizo que Priego se cuestionara si podía contratar el tipo de asesores que necesitaba.

“Fue bastante desmoralizante”, dijo. Desde entonces, ha contratado a seis asesores.

En julio, Verge Genomics concretó una alianza con la gigante farmacéutica Eli Lilly que le permitirá trabajar durante tres años en fármacos para el tratamiento de la esclerosis lateral amiotrófica, o ELA, dijo Zhang. Además, la empresa publicó el año pasado en una revista científica un artículo sobre sus métodos y este año contrató a un director para el área de Ciencias.

Fue todo un alivio poder mostrarles algo a quienes dudaban, afirmó Zhang.

“La época más frágil de cualquier compañía es la etapa inicial, cuando tienes que ganarte a las personas, convencerlas de tu visión y de los méritos de la idea”, explicó. Acerca de Holmes y Theranos, añadió: “En esa etapa, este tipo de asociaciones pueden ser de lo más dañinas y mermar tu potencial”.

Erin Griffith escribe sobre nuevas empresas tecnológicas y capital de riesgo desde la oficina de San Francisco. Antes de unirse al Times, fue redactora sénior en Wired y Fortune. @eringriffith

Article source: https://www.nytimes.com/es/2021/08/27/espanol/theranos-elizabeth-holmes.html

They Still Live in the Shadow of Theranos’s Elizabeth Holmes

Julia Cheek, founder of Everly Health, which provides at-home health tests through its subsidiary, Everlywell, said at a conference in 2019 that comparisons to Ms. Holmes were so frequent that colleagues and advisers even suggested she dye her hair so that the connections would stop. Both women have blond hair. Ms. Cheek did not change her hair color.

Ms. Cheek, 37, attributed the constant analogies to the fact that few female-founded companies get to a certain size and profile, which magnifies the actions of those that do. “Women founders have to navigate these types of questions that their male counterparts simply don’t have to answer,” she said.

The frequent comparisons are pernicious, many entrepreneurs said. In conversations with investors, female founders often field what researchers call “prevention” questions, which are framed negatively and designed to prevent losses. But male founders are more often asked “promotion” questions about a start-up’s possibilities, which allow them to focus on their hopes and ideals, according to researchers at London Business School and Harvard.

“If you’re offered a promotion question, you can answer in a promotional way,” said Andy Coravos, founder of HumanFirst, an at-home health care start-up. “The core issue you have with Elizabeth Holmes is it’s a prevention question.”

Some women said they also felt caught in a start-up ecosystem that venerates bold, disruptive businesses, with investors often forgiving those who bend the rules or who take shortcuts in pursuit of growth.

Beth Esponnette, founder of Unspun, a custom jeans company, said investors had frequently encouraged her to be more aggressive, sometimes to the point of dishonesty. One once advised her to increase her revenue projections by 10 times, a wildly unrealistic level.

Last month, Ms. Esponnette published an essay describing this struggle titled “I Get It, Elizabeth Holmes.” Many of Ms. Holmes’s actions were inexcusable, Ms. Esponnette, 33, wrote. “But I still believe that she thought she was doing the right thing taking the universal advice of Silicon Valley: ‘Fake it till you make it.’”

Article source: https://www.nytimes.com/2021/08/24/technology/theranos-elizabeth-holmes.html

Hypebeasts Hit the Road

And so, too, do the Abushis, though with one difference. They are wealthy themselves. Though raised in a tightknit first-generation clan by parents whose lives were often defined by displacement and financial reversal, they became rich in their own right following the sale, in 2014, to a venture capital group of a chain of 100 Verizon franchises built across the western United States in barely 10 years. Though declining to disclose the precise amount of the deal, they ballparked it at $50 million.

With little debt and their own substantial grubstake, the four Abushi brothers — Abed, Yas, Rosco and Fadi — set about looking for a business that would keep them united as a unit, combine a shared passion for cars (their own collection numbers over 100) and feature their name on the door. In 2017, they relocated from Northern California, where the retail custom market was predictably saturated, settling on Queens as a hub because — surprisingly and despite the dense pack of wealth in the country’s financial capital — nothing quite like it existed.

“Before them, you’d have to take your chances and go from shop to shop,” Mr. Jean-Raymond said. “And you were always getting ripped off.”

Sitting in the Abushi showroom last week, Abed Abushi, 41, explained how across the decades their peripatetic father had built and lost a number of businesses, among them a wholesale fruit concern in Texas, a string of bodegas and supermarkets around Oakland, Calif., and a confectionery distributorship in New Jersey. Occasionally collateral damage from tragic international events played a role in his family’s fate, Abed said: “After 9/11, no one would do business with my dad and so he went bankrupt.”

“But his view was always that money comes and goes but family is the only real wealth,” Rosco Abushi, 35, said then. “Because of that, we’re never afraid to go back to nothing because we had nothing.”

Article source: https://www.nytimes.com/2021/08/19/style/hypebeasts-hit-the-road.html

Start-Up Boom in the Pandemic Is Growing Stronger

When the pandemic hit, the coffee shop sent workers home, and Mr. Atout’s salary was cut. Home all day and their income uncertain, the couple began to take the prospect of a music career more seriously. They set up a website and opened a business, Songlorious, writing custom songs for weddings, birthdays and similar events. Within weeks, they had more business than they could handle and began hiring other musicians to help out. Last fall, Mr. Atout quit his railroad job to work on the venture full time.

“I think the pandemic kind of forced us into this a little bit,” he said. “It gave us a nudge where I’ve always wanted to do something but I was too scared because I didn’t want to lose the stability of my job.”

Songlorious is in many ways typical of Covid-era start-ups. It is an online-only business in a field, performing arts, that was heavily disrupted by the pandemic. Its founders started the company at least partly out of financial necessity. And though it began in New York, they are building the business in a midsize city, Chattanooga, Tenn., where they moved in December looking in part for a lower cost of living. Early evidence suggests the increase in start-ups has been strongest outside the big-city downtowns that have been hit hard by the exodus of office workers.

The increase was probably driven, to some extent, by the layoffs that left millions of people out of work early in the pandemic. Researchers at the Kauffman Foundation found that about 30 percent of new entrepreneurs last year were unemployed when they started their businesses, roughly double the prepandemic rate.

The preceding recession, more than a decade earlier, also led to millions of job losses, but entrepreneurship, by a variety of measures, fell sharply and rebounded only slowly. It was accompanied by a financial crisis and a collapse in home values, which made it difficult to get capital to start businesses.

This time may have been different partly because would-be entrepreneurs were more likely to have the wherewithal to pursue their visions. Swift action by the Federal Reserve helped prevent a financial crisis, and home prices boomed.

The government also handed out hundreds of billions of dollars in unemployment benefits, direct checks to households and other aid. Mr. Atout said federal stimulus checks had helped him and Ms. Hodges make ends meet while they got their business running.

Article source: https://www.nytimes.com/2021/08/19/business/startup-business-creation-pandemic.html

Where Are All the Wedding D.J.s?

Consider live musicians. Quartets, guitarists, and other performers may be contracted through freelancer sites like Fiverr and Upwork.

“I would even consider scouting local spots that have live music, like a church or bookstore,” Ms. Goodwin said. “However, the absolute, most cost-effective method would be to rent a speaker from a local audio visual equipment rental service. Then, get your family and friends involved.”

Get acquainted with your venue’s sound system and ask about audio connectivity so you can plug in your own device and equipment, if necessary. Once these capabilities are confirmed, start curating on your preferred streaming service. Earlier this month, Tidal, a streaming music service, launched a Wedding Hub, a one-stop source for soundtracking all wedding-themed events, like the processional and the first dance.

Spotify tends to be the most popular. Don’t forget to sign up for a premium account to avoid awkward interruptions from ads during cocktail hour and dinner.

Asking friends to flex their amateur spinning skills may be a suitable alternative, especially if the dance party is an absolute must-have. They should have “a basic instinct” for selecting music that’s fun for everybody, Mr. Hoffmann said. But even if they manage to get the party started, they might struggle to rein in over-enthused — and intoxicated — guests.

“This is a serious gamble,” Ms. Goodwin said. “If you trust your friend, yes. If you don’t trust your friend, listen to their samples. If they can’t curate six hours of music, then no.”

Article source: https://www.nytimes.com/2021/08/17/style/where-are-all-the-wedding-djs.html

Back to Normal? It’s a Tall Order as New York City Restaurants Struggle.

There are ample signs that a resurgence has begun. Tables are packed at restaurants and bars across the city. Many places have expanded their capacity with new outdoor seating, thanks to the city’s Open Streets and Open Restaurant programs.

“It feels like every day is a weekend,” said Simone Tong, the chef of Silver Apricot, in the West Village. “The energy is back.”

With commercial retail rents in New York City at record lows, some restaurants are signing new leases. There have been 1,713 new restaurant permit applications from Jan. 1 through July 2, according to figures from the city health department (which also include renewals for existing restaurants).

Still, in 2019, the number of applications for roughly that same period was 2,388, and many owners say they’re a long way from the old normal.

“People think that because restaurants are allowed to be at 100 percent, and when they go into the restaurants, they’re full, that everything is fine,” said Jeffrey Bank, the chief executive of Alicart Restaurant Group, which owns Carmine’s and Virgil’s Real Barbecue. “And clearly it is not.”

The damage the pandemic has already done is coming into focus. Just before the state shut down indoor dining in March 2020, New York had more than 27,000 restaurants, according to the city’s Department of Health and Mental Hygiene. The department doesn’t yet have current figures, but Yelp, which tracks restaurant openings, shows there are now about 2,000 fewer. The city had 173,500 restaurant employees in June, a 38 percent drop from the 280,000 who were working in December 2019, according to the New York State Department of Labor.

Article source: https://www.nytimes.com/2021/08/07/dining/new-york-restaurants-covid-reopenings.html

Innovation Invites Hucksters

I am constantly furious about this system that seems to force start-ups to shoot for the moon, or else. WeWork had a basically smart, if not entirely original, idea to remove many of the headaches of commercial office leasing. But that wasn’t enough, and I almost don’t blame Neumann for that.

Disproportionate rewards go to the entrepreneurs and companies that can sell a vision of billions of users and values in the trillions of dollars. This is why Airbnb doesn’t merely say that it lets people rent a home in an app. The company says that Airbnb helps “people satisfy a fundamental human need for connection.” It’s why delivery companies like Uber and DoorDash are aiming to deliver any possible physical product to anyone, and companies think they have to make virtual reality become as popular as smartphones. Merely earthbound ambitions aren’t good enough.

Those conditions tempt people to skirt the edges of what’s right and legal. But I also wonder if curtailing the excesses would also curb the ambition that we want. Sometimes the zeal to imagine ridiculously grand visions of the future brings us Theranos. And sometimes it brings us Google. Are these two sides of the same coin?

Elon Musk shows both the good and the bad of what happens when technologists dream outlandishly big. Perhaps more than any single person, Musk has made it possible for automakers, governments and all of us to imagine electric cars replacing conventional ones. This is a potentially planet-transforming change.

But Musk has also endangered people’s lives by overhyping driver-assistance technology, has repeatedly over-promised technology that hasn’t panned out and has skirted both the law and human decency.

I used to half-jokingly ask a former colleague: Why can’t Musk just make cars? But maybe it’s impossible to separate the reckless carnival barker who deludes himself and others from the bold ideas that really are helping to change the world for the better.

I hate thinking this. I want to believe that technologies can succeed without aiming to reprogram all of humanity and without the associated temptations to engage in fraud or abuse. I want the good Musk without the bad. I want the wonderful and empowering elements of social media without the genocide. But I just don’t know if we can separate the wonderful from the awful.

Article source: https://www.nytimes.com/2021/08/03/technology/innovation-invites-hucksters.html

La era del espacio como negocio ha comenzado

Un ecosistema de empresas emergentes cada vez más grande intenta comercializar el espacio al construir todo, desde la tecnología de lanzamiento más barata hasta los satélites más pequeños y la infraestructura que conforma los “picos y palas” de la fiebre del oro del espacio, como lo describe Meagan Crawford, socia administrativa de la empresa de capital de riesgo SpaceFund.

“La gente mira a su alrededor y dice: ‘Vemos esta sólida industria espacial. ¿De dónde salió?’”, comentó Crawford. “Bueno, ha sido construida de manera metódica y con determinación, y llegar hasta aquí ha implicado muchísimo trabajo durante los últimos 30 años”.

Los inversionistas gastaron 7000 millones de dólares en la financiación de nuevas empresas espaciales en 2020, el doble de la cantidad de los dos años previos, según Bryce Tech, una firma de análisis espacial.

“Lo que todos estamos tratando de hacer es lo que hicieron Jeff, Richard y Elon hace 20 años: construir grandes negocios. La diferencia es que estamos construyendo negocios en el espacio y ellos construyeron sus negocios en la tierra”, dijo Chris Kemp, director ejecutivo de Astra, una empresa emergente centrada en ofrecer lanzamientos más pequeños, más baratos y más frecuentes.

La primera carrera espacial, que se extendió a lo largo de los años sesenta y luego se agotó en los setenta, enfrentó a un gobierno estadounidense temerario y audaz contra una Unión Soviética malévola y sin encanto alguno. Los estadounidenses ganaron esa competencia, aunque los críticos alegaron que todo era un error en una época en que tantas cosas dentro del país requerían atención y dinero.

Article source: https://www.nytimes.com/es/2021/07/23/espanol/bezos-branson-musk-espacio.html