Fake It Till You Make It: Is This One More Lie From Silicon Valley... Like Theranos?

4 min read
Silicon Valley has built great companies and created huge wealth. But is everything they say true? When should you fake it? And when should you recognize reality? If you are going to fake it till you make it, make sure you are not faking it to yourself.
Elizabeth Holmes of Theranos with the Rich and the Powerful (Photo by Andrew Burton/Getty Images) Getty Images

Silicon Valley has built great companies and created huge wealth. But does Silicon Valley lie?

#1. Truth or Lie: VCs invest in startups? They do not. VCs wait for Aha when potential is evident. Then, no matter the size of the venture, they call it a startup. Is a 6-year-old company with 700+ business customers a startup? What would you call a company just starting out with no sales? The latter has little credibility – unless they have developed a revolutionary product, such as a miracle drug or medical device. The former has lots of credibility. This can matter because many entrepreneurs think they can get VC to start their venture – at no sales. The reality is that they have to bridge the gap from idea to Aha – with skills and smart strategies if they want to keep control of the venture and the wealth created.

#2. Truth or Lie: Getting VC means success? It does not. 80% of VC funded ventures fail to reach their goals. Getting VC does not mean success. The odds are that it means failure. And dilution. And loss of control.

#3. Truth or Lie: VCs know how to build big businesses? Some do. Sometimes. About 3% of VCs are said to earn around 95% of VC profits and these top VCs are mainly in Silicon Valley – because that's where most unicorn entrepreneurs are located. And these unicorn entrepreneurs are the ones who obtain the skills, find the opportunity, develop the strategy, and use limited capital to bridge the gap from idea to Aha, at which point the VCs enter and seek control – and mostly fail. According to Foundation VC, one venture, Netflix, earned more for them than their 199 other ventures combined. Is that skill, or a combination of chance, coordinates, and circumstance?

What about "fake it till you make it?"

Dileep Rao
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