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Why é the ‘Fake it till you make it’ never works

February 17, 2020

Providing false data to your clients, investors or collaborators should not be the moral stick with which entrepreneurs and entrepreneurs are measured.

5 min read

The opinions expressed by employees are personal.

Why é the ‘Fake it till you make it’ never worksWhy é the ‘Fake it till you make it’ never works

Many entrepreneurs have heard this phrase: “Fake it till you make it” , which translates as “Simulate until you achieve it (I couldn't rhyme it, sorry). That is, regardless of whether you already have a product or a growth worthy of showing off, this phrase promotes you to falsify or simulate information in order to meet your goals. It is generally applied in modifying, falsifying or simulating information with potential investors in order to achieve an investment round. But this phrase should stop being used and practiced in the entrepreneurial ecosystem.

Providing false data to your clients, investors or collaborators should not be the moral stick with which entrepreneurs and entrepreneurs are measured. Deeds of entrepreneurs who falsely misrepresented information to be successful, should not be endorsed or celebrated. These aggressive strategies may, in less severe cases, represent significant losses of money; and in the worst case, putting people's lives at risk.

The case of Theranos , and its founder, Elizabeth Holmes , attends to the damages that this strategy can cause. After receiving investments for more than $ 400 million, closing investments and commercial agreements with giants such as Wallgreen’s or Safeway, and having a valuation above $ 9 billion, a series of investigations and whistleblowers emerged. for, not only to cause the company to fall, but to initiate criminal trials against Holmes and his henchmen. And is that Holmes simulated the effectiveness of its flagship product to such a degree that it put the lives of thousands of people at risk.

Theranos was known for designing a machine, the size of a printer, which could generate clinical blood tests of many blood elements, virtually immediately and with a blood sample so small that it did not require needles or syringes (but simply a picket, like the one diabetics use to measure their glucose). However, the technology did not work. The results of the analyzes did not meet the quality criteria, and even used traditional methods of analysis to pretend that their technology worked.

Elizabeth Holmes rose to the reputation of entrepreneurship in Silicon Valley , sometimes being compared to her idol, Steve Jobs ( Apple ). But how could a person who did not finish college and had no experience in clinical analysis fool clients, investors and collaborators? Holmes was a cream seller. His deep voice and the way he caught your attention with his stories coaxed acquaintances and strangers, including many seasoned investors. Maybe little promises and lies began to turn into a snowball that he couldn't stop later. This is why it is important to have the discipline of not falsifying or simulating information from the beginning, no matter how insignificant it may seem.

Now, if you want to get an investment, you should try to focus your data and graphics on the most flattering information of your company. This is different from simulating or inventing information; it's about building a story focusing on the most salable of your startup. For example, if your business still has no income, obviously it will not be useful to show a graph of your income; focus on the growth of your users. If you don't have users yet, focus on the size of the market and the experience of your team. If your income has not grown so much, but your profitability does, build graphs of the latter.

But if you think you have nothing you can sell to your investors to close an investment round, don't be tempted to invent data or figures. This only means that you have to work more in your startup so you can return with investors in the future. Remember that professional investors know and understand the risk of investing in startups. It is not your job to guarantee a return, but it is, always be honest.

If you want to know more about the fascinating story of Theranos, I recommend John Carreyrou's book or the documentary.

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