Victor Frankl’s classic book, Man’s Search for Meaning, acknowledges that finding meaning in our efforts can be hard. Whatever it involves, it is first built from our sense of responsibility. This is helpful because, while meaning can be vague, a feeling for doing what is ethically right is usually easy to understand.
It doesn’t make a dilemma any easier, though. This is seen many times in the story John Carreyrou weaves in Bad Blood. Just about every page is rife with these vague situations where a particular sense of purpose can overwhelm a sense of responsibility.
In the crisis of doubt, one of the best tactics that Frankl advises is the following: Live as if you were living for the second time and had acted as wrongly the first time as you are about to act now.
In other words, imagine your regret for the wrong action knowing that you could erase that regret by doing the right thing now. It’s an interesting tactic that, in some ways, gives you a second chance to do the right thing before you ever do it wrong the first time.
I imagine something along these lines probably helped one beleaguered CFO make the right choice in the opening pages of Bad Blood. I don’t fully understand what a CFO does every day but it’s easy to imagine that their primary challenge is to avoid the very situation that Henry Mosley faced with Theranos in late 2006.
As described in the book, Mosley “was a veteran of Silicon Valley’s technology scene” and an accomplished executive during his tenure in many other companies. Like the rest of his counterparts associated with the company, he was a member of an all-star cast that featured illustrious venture capitalists and prestigious Stanford professors. It’s easy to imagine how exciting it must have been, especially when one considers the trillion dollar industry they were looking to impact.
As illustrious as the team might be, the venture still needed investors and Mosley had the task of developing the financial projections for their pitches. His initial projections were balanced with a few conservative assumptions, making it something like a plausible-yet-still-exciting scenario. After showing them to Holmes, his boss and CEO, he was told to raise the figures higher, to put his projections into the realm of the absolute-perfect best-case scenario.
This created some serious tension. As the CFO, Mosley had to stand by these numbers. To show a projection that was known to be highly unlikely, but passing it off as if it were expected, was deceptive to say the least. But maybe there was something he didn’t know. The technology seemed very exciting. If he knew more about it, maybe he could share his CEO’s enthusiasm.
Mosley starts to dive deeper into the production side of the house, learning more about the product (a blood testing machine), the current prototypes, and the demonstrations given to potential partners. He does so with an open mind, looking to find the promise that can bolster those financials. But everything he finds points to the contrary. From the claims behind the slide decks to the results delivered by the products, everything being shared with others, everything about the company as a whole, was being presented in a dubious, blatantly false fashion.
What does one do in this circumstance? Here was a startup with a lot of buzz, a lot of talented people surrounding it, and Mosley had discovered that they were many years away from being what everyone thought they already were—a company with a viable and valuable product. He had been asked to inflate his projections and it appeared that everyone else was being asked to inflate their work, too. Lofty claims, fabricated product demos. Nevermind Mosley—why would others participate in this charade?
To some extent, many of the team held firm to the belief that they would get there. Like a poker player extending a bluff, they had to be aggressive with the cards they currently held in order to put themselves in a winning position later on. Asking others to invest in products that don’t actually work? Well, that’s necessary in order to get the products to work. This is a twisted, tortured interpretation of the tenets behind The Lean Startup but I suppose it makes sense to those who are in the thick of the fray.
Also, a lot of this more disconcerting information was blatantly held from employees. Mosley had to dig to find it. So there’s that.
When Mosley confronted his CEO about the problems he saw, Holmes asked him to adopt the same perspective that others had accepted. Did they have some potholes ahead? Icebergs? Obstacles? Sure. She didn’t deny that. But she firmly believed they would overcome. When they did, those revised financial projections that seemed so inflated will actually turn out to be too low for all the success they would really see. So what’s the problem?
For Mosley, the problem was quite large and obvious. As quoted in the book, Mosley said, “We’ve been fooling investors. We can’t keep doing that.” It was a moral stand, one he felt he had to take, and it cost him his job. He was fired immediately.
I can’t imagine what that must have felt like but, twelve years later, Mosley is exonerated. And should be praised for his clear commitment to doing what’s right. It couldn’t have been easy.
And given the difficulty, I don’t want to cast aspersions towards those who didn’t take such a stand in the company. Hundreds of people who worked at Theranos would probably like to have a second chance to do what Mosley did. There is immeasurable regret for many of them and that’s quite unfortunate. So we return to the original advice provided by Frankl: imagine your second chance before it ever arrives; give yourself that chance the first time around. Because most times, that second chance doesn’t occur.