Two weeks ago, the trial of Theranos founder Elizabeth Holmes began in earnest with the prosecution and the defense presenting their opening statements.
To recap, Holmes claimed that her startup, Theranos – which she started at 19 years old – had technology capable of testing for hundreds of health conditions and illnesses from just a few drops of blood. Holmes’ alleged wonder-discovery instantly put Theranos in the spotlight and racked up $1.4 billion from top VCs and investors. Backers included Rupert Murdoch, the Walton family, VC giant Tim Draper and others.
The one setback? Theranos’ technology didn’t exist at all. Damning reports started in 2015, and from then on, Holmes spent more time covering up her deception than running her startup.
Today, she’s facing 10 counts of wire fraud, two counts of conspiracy, and will be spending the next several months at the center of one of the most contentious legal battles to ever come out of Silicon Valley.
Now, we’re not litigation experts, but we do know a thing or two about startups. So, while others get caught up in the legal drama, our team at Angels & Entrepreneurs has a different takeaway…
Here’s what we mean…
Holmes spent her entire adult life years cultivating a persona of what a startup founder is “supposed” to look and sound like the late Steve Jobs by wearing the quintessential black turtleneck and playing up the fact that she dropped out of Stanford at 19 to found her company.
And for a while, it worked. Holmes became a Silicon Valley superstar.
But ultimately, the truth came to light. Not even her Steve Jobs cosplay could hide the fact that Holmes is not a true entrepreneur.
And in light of Holmes’ unraveling, we think it’s more important than ever to talk about the importance of good “jockeys,” a.k.a. – Rockstar Entrepreneurs.
“A great writer of software code is worth 10,000 times the price of an average software writer.”
Reed Hastings, CEO of Netflix, agrees:
“…the best programmer doesn’t add 10 times the value. He or she adds more like 100 times.”
The same is true for founders. A rockstar founder injects 10,000X potential for their angel investors – and usually more than once. Think Elon Musk – an obvious rockstar. Musk founded Tesla, which dominates electric vehicles. He founded SpaceX, which dominates the space race. His Boring Company is digging tunnels to shuttle electric cars around cities. His Neuralink will give our brains superpowers to compete with AI. And his Starlink is launching tiny satellites into space.
See what we mean? A rockstar makes a BIG difference. Looking within our own portfolio, a few rockstar standouts come to mind.
Their model is 86% lighter, 316% faster, and 70% more powerful. It’s a clear disruptor to the current model, and a no-brainer for the government… already, LiquidPiston has multimillion-dollar contracts lined up from several military arms.
In this case, we’re witnessing the compounded effect of a rockstar founder empowering other rockstars.
Gamestar’s CEO, Shane, is one of the most well-known names in the gaming industry. If you’ve ever played SceneIt! (or any DVD game…) he’s the guy to thank. He’s also a licensing genius, which translates directly to one of Gamestar’s key competitive advantages: licenses for the biggest games and titles in the world.
Marvel, LucasFilms, Disney, Jeopardy, Wheel of Fortune, Family Feud… you name it, this company working on the rights to it.
Their Chief Technology Officer helped launch Disney+, a service now projected to generate $10 billion.
And the advisory board is even more stacked…
We’ve got executives from the top talent agencies in Hollywood…
CNN correspondents…
The former president of Hasbro (talk about a connection to gaming)…
The VP of E-sports for the NFL…
And, Ken Jennings – Jeopardy’s GOAT.
Then theres the co-founder, Todd. To be fair to his background, we’ll let him share the story himself. He may be one of the most impressive entrepreneurs we’ve met to date.
Until next time,
The Research Team
To recap, Holmes claimed that her startup, Theranos – which she started at 19 years old – had technology capable of testing for hundreds of health conditions and illnesses from just a few drops of blood. Holmes’ alleged wonder-discovery instantly put Theranos in the spotlight and racked up $1.4 billion from top VCs and investors. Backers included Rupert Murdoch, the Walton family, VC giant Tim Draper and others.
The one setback? Theranos’ technology didn’t exist at all. Damning reports started in 2015, and from then on, Holmes spent more time covering up her deception than running her startup.
Today, she’s facing 10 counts of wire fraud, two counts of conspiracy, and will be spending the next several months at the center of one of the most contentious legal battles to ever come out of Silicon Valley.
Now, we’re not litigation experts, but we do know a thing or two about startups. So, while others get caught up in the legal drama, our team at Angels & Entrepreneurs has a different takeaway…
Here’s what we mean…
“Back the Jockey, Not the Horse”
The case of Elizabeth Holmes takes our principle of “back the jockey, not the horse” to a whole new level. It’s one thing when a jockey mismanages a promising racehorse (like Adam Neumann and WeWork), but in the case of Theranos, we’ve got a horse that can’t even walk and a jockey who’s telling us it’s the next Secretariat.Holmes spent her entire adult life years cultivating a persona of what a startup founder is “supposed” to look and sound like the late Steve Jobs by wearing the quintessential black turtleneck and playing up the fact that she dropped out of Stanford at 19 to found her company.
And for a while, it worked. Holmes became a Silicon Valley superstar.
But ultimately, the truth came to light. Not even her Steve Jobs cosplay could hide the fact that Holmes is not a true entrepreneur.
And in light of Holmes’ unraveling, we think it’s more important than ever to talk about the importance of good “jockeys,” a.k.a. – Rockstar Entrepreneurs.
What Makes a Rockstar?
The Rockstar Principle was developed in 1968, and for a while, it was mostly delegated to software engineers. According to Bill Gates, having a Rockstar coder on the team is like a 10,000X factor:“A great writer of software code is worth 10,000 times the price of an average software writer.”
Reed Hastings, CEO of Netflix, agrees:
“…the best programmer doesn’t add 10 times the value. He or she adds more like 100 times.”
The same is true for founders. A rockstar founder injects 10,000X potential for their angel investors – and usually more than once. Think Elon Musk – an obvious rockstar. Musk founded Tesla, which dominates electric vehicles. He founded SpaceX, which dominates the space race. His Boring Company is digging tunnels to shuttle electric cars around cities. His Neuralink will give our brains superpowers to compete with AI. And his Starlink is launching tiny satellites into space.
See what we mean? A rockstar makes a BIG difference. Looking within our own portfolio, a few rockstar standouts come to mind.
Knowledge is Power (and Money)
Take Alec Shkolnik and his father, Nikolay, for example. They’re both PhDs (Alec in AI and Computer Science from MIT, Nikolay in Physics from UConn). Together, they control over 100 patents for engines and engine parts. With their expertise and entrepreneurial spirit, they’ve completely reinvented the engine as we know it.Their model is 86% lighter, 316% faster, and 70% more powerful. It’s a clear disruptor to the current model, and a no-brainer for the government… already, LiquidPiston has multimillion-dollar contracts lined up from several military arms.
Rockstar Synergy
Then we’ve got Arlan Hamilton and her team at Backstage Capital. Arlan built her company from the ground up, transforming herself from homelessness to one of the most respected venture capitalists in the country. Arlan and her team have made it their mission to invest in underrepresented founders – women, people of color, and founders from the LGBTQ+ community. So far, this team has backed 160 startups, raising $250 million – and they’ve helped in the creation of more than 500 American jobs.In this case, we’re witnessing the compounded effect of a rockstar founder empowering other rockstars.
Bona Fide Disruption: No Turtleneck Required
Next up – we have to talk about the rockstar entrepreneurs behind Gamestar, the “Netflix for game night.” You can learn more about their tech here, but for right now, let’s focus on the team.Gamestar’s CEO, Shane, is one of the most well-known names in the gaming industry. If you’ve ever played SceneIt! (or any DVD game…) he’s the guy to thank. He’s also a licensing genius, which translates directly to one of Gamestar’s key competitive advantages: licenses for the biggest games and titles in the world.
Marvel, LucasFilms, Disney, Jeopardy, Wheel of Fortune, Family Feud… you name it, this company working on the rights to it.
Their Chief Technology Officer helped launch Disney+, a service now projected to generate $10 billion.
And the advisory board is even more stacked…
We’ve got executives from the top talent agencies in Hollywood…
CNN correspondents…
The former president of Hasbro (talk about a connection to gaming)…
The VP of E-sports for the NFL…
And, Ken Jennings – Jeopardy’s GOAT.
Then theres the co-founder, Todd. To be fair to his background, we’ll let him share the story himself. He may be one of the most impressive entrepreneurs we’ve met to date.
Until next time,
The Research Team
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