Good morning: Should start-ups worry about hyping their products?

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Good morning, Marketers, should tech start-ups be worried?

Reading about Elizabeth Holmes’ conviction on four counts of wire fraud in the Theranos trial, I kept coming across suggestions from analysts and legal experts suggesting that the outcome of the case constitutes a warning to Silicon Valley start-ups in general. Stop talking up your product and exaggerating its merits. ”In Silicon Valley, hyping up your product – over-promising – isn’t unusual,” wrote James Clayton.

But is there really no red line between puffery and deception? Puffery, of course, is the term of art in advertising for expressing what is obviously an opinion. “This is the best detergent you’ll ever use” is a claim an advertiser can make without an obligation to provide conclusive data to support it. Does puffery happen in marketing technology sales? I think we all know it does. Are predictions of how software will solve challenges and drive revenue sometimes starry-eyed? You bet.

But a red line is surely crossed when, say, prospective purchasers of an AI-driven personalization solution are shown results that were actually derived from manual personalization using a spreadsheet because the AI actually doesn’t work. I think that’s what we’re looking at here (“…the defendants represented to investors that Theranos conducted its patients’ tests using Theranos-manufactured analyzers; when, in truth, Holmes and Balwani knew that Theranos purchased and used for patient testing third party, commercially-available analyzers).

Kim Davis

Editorial Director


Quote of the day. “Change management is the biggest issue Operations teams face. Period. It’s NOT adopting new tech, NOT creating new campaigns, NOT tracking ROI. Efficiently, and effectively keeping up with change.” Stephen Stouffer, VP Marketing Operations, SaaScend

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