Interesting article in a recent Economist about the hype surrounding high tech start-ups. The article, The Fable of the Unicorn, discusses a Silicon Valley darling called Theranos. The company has created a new type of blood test technology that could possibly turn the industry on its side. According to the Economist, that is a $75 billion a year industry so we’re talking about big money.
This article, and many like it that I’ve read over the years, highlights a big issue in the public relations industry—What responsibility does a PR manager have to give honest feedback and perspective to both the company’s executives and to the market in general? If the goal of a CEO is to build the valuation of the company, how much hyperbole is allowed? Lying can get you in to trouble, but is it a lie to merely hype the new company or product and paint a vision of where the company can eventually be?
“Yet in other ways Theranos evokes a central theme in today’s tech industry: startups which promise to disrupt lucrative businesses and become valued on the basis of fantasies about their potential, rather than present reality. Investors are so keen to get a piece of any sexy-sounding startup that they lap up entrepreneurs’ hype—and anyone who asks awkward questions risks being cut out of the funding round in favour of someone more trusting.”—The Economist
Our industry is full of examples of companies or products that were over-hyped only to crash and burn. The issue of FUD is also a part of this but that will be for another blog post down the road.
Promoting a company or product in order to gain attention and build valuation or secure investors is part of our job. To me the question becomes, who are we responsible too? I know that if I was working with a CEO or CMO who wanted us to over-promote something, or outright lie about it’s potential, I would have a problem with it. We always counsel our clients to be ethical and we expect them to behave the same.
Anyone who has had to give someone constructive criticism knows how awkward it can be. Imagine if you were working with a CEO or CMO and you knew they were bending the truth or outright lying, what would you do? Have you ever had a similar experience?