Monday, December 19, 2016

Startup Pitfalls: Overpromising the MVP

By now you may be aware of the fate of Theranos, the embattled medical testing startup that was the darling of Silicon Valley just over a year ago. If you are not familiar with their story, I advise you to go research it as it is perhaps the prime example of great intentions and vision in a Silicon Valley startup being sunk by secrecy, lack of execution, and failure of critical examination as just a few of its problems.

For those familiar with the startup, the paper-thin foundation upon which Theranos was built began collapsing after a landmark Wall Street Journal report on the company, released near the end of 2015. The report detailed how Theranos had yet to demonstrate not only the use of its vaunted-but-unseen blood testing tech in research, but any data-based results whatsoever while continuing to use existing medical tech to perform all marketed tests. In the wake of the WSJ story, time kept passing, Theranos' workforce mysteriously dwindled while unqualified persons ran key aspects of their medical operations in violation of federal law, questions began being asked by more and more people, and today Theranos appears to be on hiatus, and may never recover. Theranos' founder Elizabeth Holmes, until recently Silicon Valley's newest rising star, is now often seen in social media memes touting her quote about intentionally foregoing a backup plan for her company.

After I read this story last week, it seems that one could be forgiven for thinking Magic Leap's name could be used in place of Theranos. This is another case of hype and early investment exceeding the MVP (minimum viable product)...or an MVP at all.

Magic Leap has been a darling of the AR (augmented reality) market, a startup that has supposedly created tech that can superimpose amazing visuals over what people see using a headset device. Perhaps needless to say in this age of tech startup stardom, Magic Leap has secured funding and global investor interest to the tune of a rough valuation near $5 billion. They made a promise to their market, but have yet to deliver on it. Now, after a bit of digging by the press, it seems Magic Leap is much further behind the curve they were thought to be ahead of.

Rony Abovitz, founder of Magic Leap, is telling everyone to have faith. "Believe" he tweeted earlier this month. But how is anyone interested in his company's technology supposed to accept that kind of furtive solace when it has been revealed that Magic Leap's hype-generating video was not only not a display of their tech in progress, but was essentially a Hollywood-quality ruse for what their technology eventually would do (in the vacuum of a delivery time frame)?

I'm very interested to see how Magic Leap's story plays out in light of the Theranos debacle. There are many parallels that I see just on the surface. Theranos suffered from good intentions attempting to take the shortcut to financial and economic glory through Silicon Valley hype-sterism and a reliance on an executive and advisory team that was not sufficiently circumspect of the plan or demanding of results.

Hopefully Magic Leap's story doesn't include all of these weakening elements, and will take a better path in the near future.

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