When Fake It Till You Make It Goes Wrong: A Lesson For Entrepreneurs
There are many stories where “fake it till you make it” went horribly wrong. Read on to learn from the hilariously dramatic rise and fall of Elizabeth Holmes, Adam Neumann, and more entrepreneurs.
“Fake it till you make it” is an often-used saying that describes the act of imitating confidence, competence, and motivation until you eventually realize them. The phrase was first referenced in a 1968 Simon & Garfunkel song titled “Fakin’ it.” The well-meaning advice has been spreading like a gospel ever since. It is especially popular in the “law of attraction” community as it perfectly aligns with their core principle of “act as if.” It also serves as Silicon Valley’s number one rule.
The famous story
The “fake it till you make it” adage has two sides: the non-threatening side of fake smiles and Superman poses and the dark side of blatant lies and self-deception. To master the fine art of “fake it till you make it,” one must feign three things: confidence, competence, and motivation. Its two sides emerge while dissecting the definition.
When a person feigns confidence, a speech goes well, a good impression is made, and no real hazards follow. But when a person feigns competence by outright lying, misconduct and other dangerous problems ensue. A leading example of this is Elizabeth Holmes, the former CEO of Theranos, a blood testing company that sought to use finger pricks to draw blood from tiny vessels and run hundreds of lab tests on an extremely small sample of blood. A medical fantasy, it had seemed, but Elizabeth boldly made several false claims and attracted high-profile investors.
Theranos had about nine billion dollars in capital at its peak, which briefly made Elizabeth the youngest self-made female billionaire, according to an article published by Forbes in 2014. The Edison, Elizabeth’s 0.5-inch medical device, was just a 0.5-inch glass; it could not perform any of the miracles she had claimed it would. A WSJ article exposed the company, and now, after a 3-month long trial, Elizabeth has been found guilty on four of the 11 charges. She has recently been sentenced to 11.25 years in prison.
Ubiome was a biotechnology company founded to sequence the microbiome for researchers, claiming to solve diseases like autism, autoimmune disorders, irritable bowel syndrome, and ulcerative colitis just by using a sample of one’s excrement. “We want all of your poop,” they said. They ended up being charged with defrauding investors of $76 million. WeWork was another such company that started off by offering a shared working space for startup founders and freelancers. It not only provided desk space, or as they called them, “physical social networks,” but also promised support in their journey. It went bankrupt in a span of six weeks because the CEO was a man named Adam Neumann, who insisted on walking barefoot and becoming 'president of the world.'
The primary reason for the bankruptcy was, of course, the company branding itself as a tech giant instead of as the real estate firm it actually was. Several lawsuits on race and gender discrimination, sexual harassment, and investor pressure led Neumann to step down from his role. Similarly, Trevor Milton claimed to have invented the hydrogen-powered car Nikolai One and repeatedly lied to investors. He made a fake ad by letting a truck roll down a hill because he never had a fully working prototype. The founder has now been found guilty of three counts of fraud he was convicted of. There are many more stories where “fake it till you make it” went horribly wrong. Bernie Madoff, Anna Delvey, and McFarland are some of the people with their own Netflix show about their dramatic rise and even more dramatic fall. The most dramatic tributes to Elizabeth Holmes include an award-winning book, a well-known podcast, and an HBO documentary.
Moral of the story
While there are companies that "made it" by "faking it," their story only goes as far as faking confidence and not competence. Especially as a startup, companies need to tread carefully when it comes to choosing integrity and authenticity over false claims. It is tempting to make bold claims and lie to investors at the early stages of your company, but you’ll eventually fail. You can’t say that your product will solve a certain problem when it can’t. You’ll risk losing your customers and potentially committing fraud.
Fake it til you make it can serve as a self-improvement technique or a public speaking tip, but never as a business strategy. When you fake a behavior, the power of habit will take over. Furthermore, different hormones activate depending on body posture. So, it is science-backed that you do that Superman pose or fake smile when you feel anxious or distressed. And you can even dress for your dream job to feel like you have your dream job, but a doctor is more than a white coat and a stethoscope. Now you actually have to become "it" instead of "faking it."