This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.

| 2 minutes read

The app that broke Iowa and the fallacy of influencer credibility

What do Shadow Inc., Theranos, and Fyre Festival all have in common? No, not fraud as some may be guessing, but the reliance on influencers to push a product or service to market. 

Theranos had its "all-star" board (albeit naive and largely asleep at the wheel) assembled by former U.S. Secretary of State George Schultz which included U.S. Secretary of Defense James Mattis and U.S. Secretary of State Henry Kissinger, among others. Fyre Festival had Ja Rule and an army of Instagram models and influencers including Kendall Jenner.

Who did Shadow Inc. have? Ex-staffers of 2016 presidential candidate and former Secretary of State, Hillary Clinton--the candidate who won the 2016 Democratic primary and the presidential election's popular vote, despite ultimately coming up short. Clinton's team has been deeply embedded in Democratic politics and has a significant influence among staffers and committees. 

All of these influencers have one thing in common: they were designed to create credibility for a company with investors, clients, and consumers. There isn't inherently something wrong with this technique. Most successful businesses are built on relationships and trust. In fact, influencers are utilized all of the time. I even recommend to new startups that they create a technical advisory board as early as possible to help develop their product and lend credibility to investors. A problem arises, however, when these influencers do not actually carry experienced technical skills but leverage their credibility to the benefit of a company. Essentially, you end up with influencers who are pushing a product to market, even though they lack the most basic understandings of it.  It's a recipe for disaster.

General Mattis knew very little about biotech or the scientific limitations of running blood assays.

I highly doubt Kendall Jenner, while a model and media personality, knew much about the logistics and planning which go in to hosting a music festival on an island in the Caribbean. 

Shadow Inc., at least according to one report, appears to have built its Iowa caucus app with little more than a Google searched DIY guide to programming. 

All of these companies were able to gain incredible traction without having a product or company that could deliver. They had what appeared to be an MVP, but there was little testing or thought given to the resources and infrastructure needed to scale a product and company. What they did have was hype, influence, and the right networks.

This highlights, that, for a prospective investor or customer, perceived credibility is not a substitute for proper due diligence--especially in highly technical markets. The nuances of technology are often lost on most lay people. It is important to surround yourself with knowledgeable experts and rely on them. This can present a challenge in closed networks such as politics and high-growth venture-backed startups.

For the developer or a startup, do not take shortcuts simply because you can. The modern adage, "move fast and break things" may work well if you're developing the latest game, but nobody gets hurt if a new Pokemon Go update doesn't work. If you're running a bio-tech company though, or, you know...operating the very foundation of a cannot afford to be wrong.

A transformative piece of technology is supposed to “disrupt” the unwieldy ways that came before it. On Monday evening, an app built to deliver quicker caucus results took the Silicon Valley term of art literally, contributing to massive delays in reporting the results in Iowa.


investor finance, securities, startups & technology