27/06/2018
THE INVADERS ARE BACK
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In the light of the Theranos scandal in which in May 2018 John Carreyrou reported that American business and government leaders lost more than $600 million by privately investing in Theranos revelations, you might want to look forward to your long deserved retirement and pause for thought.
Just how much of your pensions funds performance will be reliant on a 22 year old college dropout with no experience or qualifications to talk of albeit in possession the charisma of the next Steve Jobs?
Picking stocks is no easy task and picking winning startups is almost a fools game. Game being an appropriate metaphor for the practice of early stage technology investing.
I should know, I have been working on and off with startups and technology enabled businesses in particular strategic ventures since 1999, including stints at some prestigious VC firms, mainstream and investment banks and with both large and boutique management consulting firms.
I like many I am deeply engaged and ever more fascinated by opportunity of identifying and understanding next generation technologies that have the promise to make the world of work, particularly financial services and healthcare, a better safer more equitable place for us all.
Occasionally I even get to attend entrepreneur investor events, and have been known to speak at the odd finance conferences or write about finance and technology regulations and markets.
Yet although I know many good investors hope to back technology enabled companies of the future, I am also deeply cognisant of the fact that CEOs and Investment firms are still are willing to pump and dump their fiction based hype on unsuspecting under performing money managers.
These so called money managers are willing, in this systemically low yield environment, to put at risk your life long pension pots on their next feeble but hype-able idea. There is now even more pressure on them to perform in the light of new regulations that aim to prevent analysts from passing off inadequate sell side research.
2008 should have been a massive reality check for many investors yet regulators failed us again, watering down the medicine and letting the contagion spread.
When pathological liars are permitted to live glamorised silicon valley CEO lifestyles we know trouble is abound. Is history about to repeat itself? Will true game changers emerge or are we all willing to trust the twenty something dropouts with our retirement savings.
Some are undoubtedly brilliant yet many have never had a real job and many more never converted the billions they control into a single penny profit.
I want to believe that Mr Musk is a genius, yet none of his remarkable companies have ever made a profit, I hope that trips to Mars will one day become profitable and that hyper-speed underground tunnels will do more than dig massive gaping holes in the ground. At least he has a chance because he at least develops stuff that does what it says on the tin, so to speak.
But in truth it has been revealed today that many companies including many of the so called techies riding the bull, are in reality, operated in a fashion that resembles a Viking Raider ship.
Just read the Dan Lyons’ damning book “Disrupted,” about HubSpot, the so called inbound marketing company that allegedly relied on outbound cold calling pressure selling to win new business, selling its software that is supposed to bring in new business. If you can't even use your own software, that really says something.
All hands on board pulling frantically at the Oars, driven buy the desire to make their next big plunder...give me strength!
