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Are startups aiming for the moon or being perpetual motion machines?

The recent debacle of health technology startup Theranos has shed light on a puzzle that I’ve been thinking about for a while now. How can you tell if an innovative founder’s vision represents a moonshot or a perpetual motion machine (PMM)?

Moonshots and PMMs are both incredibly ambitious and novel projects. However, moonshots are ultimately achievable (such as America’s great voyage in 1969), while PMMs are physically impossible. To the scientists and engineers working in the basement of Theranos’ Elizabeth Holmes, the grand vision of miniaturization was essentially a PMM. It was physically impossible to run more than 200 blood tests on a single drop of blood.

Selling a vision vs product feasibility

This practice by startups selling a vision before building an actual product exists for at least two reasons. The first is financial. Founders and sales teams need to pitch a grand idea to raise the capital necessary to actually develop their imagined solution. The second is cultural. I think the tech industry, and Silicon Valley, in particular, seeks to mimic Steve Jobs’. His ability to pull the seemingly impossible out of his team by using “a reality distortion field” is well-known. Through his charisma, Jobs was able to convince his engineers that technological advances that seemed completely infeasible, were in reality realizable.

Let’s consider an example. When building the first Mac, Jobs was frustrated by the slow boot-up time. His engineers assured him that the code worked as efficiently as possible. That there was no way to improve the startup speed further. To Jobs, this was unacceptable. He painted a vision of how much time they would save the world if every Mac booted up 5-10 seconds faster.

A few weeks later, Jobs’ team had shaved off 28 seconds off the boot-up time.

At the receiving end

I see plenty of startups with incredibly innovative visions. Some of them wind up being Jobs-esque moonshots, while others end up being Holmes-style PMMs. Unfortunately though, when an idea turns out to be a PMM, developers end up at the receiving end of the blame. In actuality, the founder and the sales team asked them to build something impossible.

So, whether you are an engineer or an investor, how do you know if a founder selling a glamorous vision is sitting on top of a rocket to the moon or a pile of broken nanotainers?

I don’t have a complete answer. I think part of it revolves around the lean-startup idea. Test your riskiest assumptions early on before over-investing time and capital. The most dangerous assumption in the case of Theranos was not marketing adoption. It was the technical feasibility of conducting hundreds of blood tests using a single drop of blood.

 

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About the Writer

  • Hemant Elhence
    Founder and CEO, Synerzip

    Hemant is the Founder and CEO of Synerzip. He is a proven leader with successful track record of identifying new market opportunities and building businesses to realize those opportunities. Hemant has extensive experience in the high-tech industry, including software products and services and semiconductor and people leadership. He is equally adept at strategic and operating aspects of business. Hemant has a BSEE from IIT Delhi, MSEE from University Of Massachusetts and an MBA from The University Of Chicago Booth School of Business.