We’ve all heard these larger than life claims made about some innovation.  If it’s too good to be true, it probably is. Bogus innovations cause serious damage.  They hurt consumers, employees, investors, and the innovator community as a whole. But how do you know if it’s fake?  There are telltale signs that should cause you to dig deeper. These tells will clue you in to a bogus innovation.  

The 4 Tells of Bogus Innovation

Before you invest in that startup, join that cutting-edge innovation company, buy the latest device, assess.  Check the organization and innovation against these four tells.

Unvalidated claims

Technical oversight

Fact checking

Organizational governance

Don’t take for granted that someone else, perhaps a well-known board member, is standing by it.  Do the due diligence yourself. Be aware and avoid the expense and pain of being fooled by bogus innovations.

Tell Number One

Companies often promote their innovation as the next big thing.  But, claims without validation should be treated with great suspicion.  To a degree, most companies want to protect the secret to their innovation.  But when a company insists on keeping the entire input secret and expects you to trust them, alarm bells should ring.  The company should be able to demonstrate an input and the resulting output to back up their claim.

I am often asked to sign a non-disclosure agreement (NDA) before I ever lay eyes on an innovation.  I won’t. An NDA binds you even if you uncover some fault with the claims. It requires a level of secrecy and trust before validating the claim.  When a company goes to great lengths to protect their own testing and status of the innovation, beware. Dubious companies may use NDAs, employee agreements, arbitration agreements to create a fear factor.  These could be a firewall for a false narrative.

Theranos, the now defunct medical technology company, made unvalidated claims.  They claimed their blood testing equipment could perform a number of blood tests with a single drop of blood.  Many bought into their claims without validation. The day of truth came and Theranos claims were proven false.  But not without first hurting a number people and creating a lot of damage.

Best practices to validate claims are emerging in the wake of bogus innovation scandals.  

Best practices:

Get independent lab results throughout the funding phases.

Have senior leaders (CEO, CIO, CTO) attest to the results.

Tell Number Two

A lack of technical oversight should be another red flag.  The lack of industry and technology experts on the boards of companies is shocking.  Many companies stack the board of directors with big names, former CEOs or CFOs with backgrounds in sales or finance.  There’s a dearth of technical expertise. Bernie Madoff bilked millions from investors. No one questioned the lack of technical oversight until it was too late.

I’m a big proponent of diversity, with a particular interest in neurodiversity.  On the board of directors, diversity of expertise is essential.  The board should include an independent, deep technical expert who can push back and challenge where needed.  This expert should not be the inventor or closely linked to the innovation. There’s an alternative to a technical board member.  Set up a Science and Technology Advisory board to investigate and validate claims.