How Theranos Ruined Elon Musk’s Robo-Taxi And Robot Launch

Earlier this month, Elon Musk launched his Robo-Taxi and showcased the latest iteration of the Tesla robot, but it didn’t go well. He’d been saying for years that his autonomous driving technology was two years out, and again, he said this new product was two years out, with little detail on what it would be like when it arrived. In addition, the robots were remotely operated, not autonomous, similar to previous tech launches that were more smoke and mirrors than reality, even though the result was far more successful.

Musk appeared to be following the “fake it before you make it” strategy, where folks make something look real and fool investors and potential buyers into thinking it is accurate. This strategy worked well for Larry Elison and Oracle, Steve Jobs and NeXT and Apple, and other products, but it blew up on Theranos and may have made this entire approach non-viable.

Fake-It Before You Make It

One of the problems when getting funding is convincing people you have more than one concept. So, companies often created fake products that they then presented as real and worked like crazy to make them real before they were jailed for fraud. Larry Ellison famously didn’t have a product even as he was selling what he didn’t have. Still, eventually, he did have a working product before anyone pointed out he didn’t, and his success is history.

Steve Jobs created a video of what the NeXT computer might do, then had scripted demonstrators who would interact with the video as if it were a working computer, fooling a lot of investors. He, too, got something to work on before it blew up in his face. He did this again with the iPhone, which was presented as near complete when it didn’t work. Still, an amazing few months later, he had a working iPhone, which initially sucked, but eventually allowed him to take market leadership before Google did to him what Microsoft had done with the MacOS a decade or so earlier, changing that dynamic.

But in both cases, we had massive financial successes that resulted from people believing fake products weren’t fake.

How Theranos Changed That Dynamic

The industry had a gullibility problem that remained in place for decades, even after the relative histories were published showcasing how hop people were duped. However, when Theranos tried the same thing, even though they were given years to make their offering real, it didn’t lead to their CEO and others getting jail sentences.

Theranos was the wake-up call that got people to look beyond the smoke and mirrors on something that was often too good to be true. The end result was that the tech media approached the Musk launch very skeptically. Instead of glowing coverage for it, most pointed out how there was no reality behind Musk’s words, and the stock market, which seemed poised to reward Musk, instead punished him and Tesla for trying to fake them out.

In short, the “fake it before you make it” strategy may no longer be viable or require someone more proficient than Musk to execute it, but it didn’t work for Musk at all.

Wrapping Up:

Musk’s effort to build up Tesla’s valuation, critical to his proposed massive salary increase, failed primarily due to the skepticism surrounding tech in general and Musk in particular. While the “fake it before you make it” strategy has enjoyed significant success in the past, it doesn’t appear to be working well now because tech and automotive reporters appear to be far more skeptical than their peers were previously.

As Musk stripped Tesla of resources, the company’s ability to execute has degraded. At the same time, it needs to convince reporters, analysts, and investors that its future is bright and highly profitable. With this robot taxi and robot launch, we may see the end of people falling for products that are mostly smoke and mirrors.