Blood-Testing Firm Theranos to Dissolve
wsj.com
wsj.com
I think the most disappointing thing about this whole saga is that (in theory) the Theranos technology was supposed to be a major healthcare game changer. It could have revolutionized testing, and would surely have saved countless lives.
But instead... here we are.
It is a page-turner; extremely well-written.
I like the idea of a simple universal test and can see how the executives who bought it into fell for the fantasy.
I'm no Theranos apologist. Based on the conversation, I'm ordering the book to see if there's really any more detail. But keep an open mind. Assume people are no worse than you.
I don't think Theranos was intended as a scam from the start, and even when it was well into fraudulent territory, Holmes seems to have had some kind of genuine belief. (If not, I think she could have got out earlier with lots of money and less legal/reputational exposure.) But unless Carreyrou got almost everything wrong, there's no reasonable way to see the Theranos story as a tale of more-or-less well-intentioned people responding in forgivable ways to the pressures and challenges of a difficult industry, as I think you're suggesting might be the case.
It was more like a death spiral of unrealistic promises bleeding into outright lies, a cult-like working environment, bullying and legal intimidation of critics, and eventually the deliberate (or, to be extremely charitable, wilfully ignorant) use of unreliable technology to conduct medical tests on, and give inaccurate results to, unsuspecting patients.
Nothing she did was good for anyone.
I just make a serious effort every day to be less awful, and I've learned that when I try to trade my soul for huge success I get neither. But I know what it's like to go to the bad, and I know other people will do likewise.
To me, the Theranos story feels very natural and plausible. And I hope I will always be prepared to choose poverty and failure rather than try to elbow my way into a place I'm not supposed to be.
But there will always be someone who is prepared to lie, cheat or destroy just in order to beat me over here playing nice. Because they ARE no worse than me. But I don't have to give in to my worst nature…
Folks we speak with have a lot of passion for this space. We believe the Theranos story actually highlighted the size of opportunity for improvements in this industry.
...except when it involves investor's money.
Some takeaways after reading Bad Blood:
1. Listen to people.
2. If you're 19 with a great idea and investors willing to support it, ask for help.
3. Cumulative moral lapses will become a slippery slope.
4. If you're building something to sell to the medical industry, for goodness sake get some medical professionals in there.
5. Don't learn your leadership techniques from a Steve Jobs biography.
6. Don't sleep with someone and make them president of the company (or vice-versa).
7. Strive for diverse opinions instead of some yes men (and groupthink).
8. Fabricating results that can impact human lives will bring on the free press, the FDA, the SEC, and the FBI like a sack of bricks.
Believe in something. Even if it means sacrificing everything. Especially investor's money, because that's what it's there for. Except when it comes to lives and health of other people. Make no compromises there, no sacrifices.
I have not read the book, but based on the author’s interviews I have to agree with the idea that fake it ‘till you make it should never be applied to the medical space.
When Theranos went live in Walgreens they crossed a line where limitless ambition should never be an excuse for vaporware. If accountability is at all an American standard, then Holmes should be prevented from ever being an executive in the health space. People’s lives were endangered. There is no excuse. Blood tests are not some b2b SaaS customer dev experiment.
That's your problem right there. I see no evidence (from the perspectives of politics, business, religion or any other angle I can think of) that Americans actually care even a tiny bit about accountability. They're perfectly happy to say they do, but when push comes to shove its a thin sheen over tribalism ("My opponents are obviously not being held to account").
So long as your belief is justified (even if mistaken). Some people think that they can believe hard enough to make fiction a reality. It’s not always easy to tell when this is thinking outside the box vs self-delusion.
From what I have read, this is a third case. It seems to have crossed from belief, to delusion, to deliberate fraud.
I can't believe no one has caught on to the fact you are apparently making some sort of joke based on the just-now-launched Nike ad campaign with the same exact text.
1. Don't be a psychopath.
http://uk.businessinsider.com/ceos-often-have-psychopathic-t...
https://www.theguardian.com/technology/2017/mar/15/silicon-v...
https://www.cnbc.com/2017/03/21/apparently-psychopaths-make-...
Don’t get into a relationship with someone twice your age just because he was successful at one point of time in his life. Especially if he’s not humble.
At Ramesh Balwani’s age, if he were really that experienced, a person learns to run a company without shouting madly at his employees.
(It wouldn't surprise me if we eventually get a film adaptation... but those are always worse if you read the book.)
The reporter, John Carreyrou, also caught backfire from Theranos. Especially his sources whom he did try to protect but were stalked by private investigators & lawyers.
Given that Theranos didn't have a product it is only good news that they're finally dissolving. Holmes and Balwani ruled with tyranny and compartmentalisation which created a toxic work environment, but that does not mean all the employees were ignorant or stupid or into the scam; many of the employees were highly skilled and intelligent. Those who did know they didn't have a product (or that it was some dirty hack based on a different product) were manipulated by Holmes and Balwani.
I saw someone mention psychopath. I'm unsure what exactly these two people are. Sociopath, psychopath, narcissist, whatever it is; it isn't pretty.
When I read the book I was regularly reminded by Brian Krebs' "Sources: Security Firm Norse Corp. Imploding" [1]. They also had no real product and used compartmentalisation. Also well written (though way briefer).
[1] https://krebsonsecurity.com/2016/01/sources-security-firm-no...
A film adaptation, staying Jennifer Lawrence as Elizabeth Holmes, is already planned:
First movie I ever saw Jennifer Lawrence in was Winter's Bone [1]. Goodness grace, she's such a heroine in that movie. No wonder she got typecast for the strong female roles.
Holmes tried to convince people she was the heroine, which is not quite the same thing
I suppose they could also make a movie about Fiorina, boldly destroying jobs and shareholder value at a rate no one had ever dreamt of...
The "Bad Blood" movie is based on the "Bad Blood" book, which is the definitive source documenting Holmes' frauds.
https://youtu.be/rGfaJZAdfNE?t=99
The book definitely gets it right.
This reads like such a weird statement. It never existed. It could’ve never have revolutionized testing because it was entirely imagined and not based on reality.
It’s like watching Star Trek thinking tricorders are real then being disappointed when told they’re a fiction.
I think if Theranos hadn’t gone all-in on its fraud it still could have had an impact. One area was that it was actually pushing to change laws (I know it did this in Arizona) to give individual control over blood testing instead of requiring people to go through doctors and corporations. Another area was price transparency. Much like the Surgery Center of Oklahoma (https://surgerycenterok.com), it was listing all the prices for its tests right there on its website. These 2 things alone would be a major advancement in the US. Forget the mini blood tubes.
When you're buying one blood test you won't be able to tell what it missed. If you're a medical practitioner, ordering hundreds of blood tests per month (or something) you can afford to duplicate the test when you change testing provider and realise that they aren't doing a very good job!
The price listing was pretty cool though.
[0] http://www.labtestingmatters.org/direct-access-to-test-resul...
A whole lot of things we have today were inspired by Star Trek and didn't exist... until they were made to exist. The fault in Theranos was that they sought to make things exist by innovation on a time table, and when the time table didn't work, covered it with fraud to make the deadline.
Honestly, fuck Elizabeth Holmes and her weird ass advisors. There was so much potential here that was squandered for the sake of her ego and paranoia.
Never really on the table.
Antivaccination movements historically pop up in all kinds of different places and contexts for different nominal reasons, and I'm pretty sure a big part of what gives them steam is that people just aren't comfortable with the physical logistics.
I had various nurses as a child and the pressure/closeness the puncture tool was applied with, matters more than anything. With any puncture tool, if its already being pushed into flesh, ie. skin is forming a valley, its more likely to cut through deeper layers due to the compression.
then again I am a big chicken when it comes to shots
When I was 11 I was in the hospital. A nurse was going to replace my IV. She spent 45 minutes trying to find a vein in either arm. She got another nurse and within 5 minutes, it was done.
The new nurse said that the previous one just got done trying to put an IV in an infant so she was "a little stressed" and "should have known better" about not stabbing a child for 45 minutes straight.
That experience was pure hell. It hurt so much. I was so sick that I could barely move or talk to ask for someone new. All I could do was lay there screaming in my mind and sort of move every once in a while.
Since it's on the side it doesn't affect me that much, but I feel it for much longer than I feel the needle that's been in my arm for 10+ minutes.
There are a lump of people who appear excited in general, sure, but the people who appear to have know-how in the area are more subdued and questioning, even then. There are a fair few comments calling it garbage.
Many people seem to have called it.
In hindsight it seems like a way to keep the government away by trying to bribe people in it.
This is no different for literally every HN post.
- You can't trust scientific press releases at face value.
- You definitely can't trust science reporting in media, or any kind of reporting for that fact (see: https://en.wikipedia.org/wiki/Gell-Mann_amnesia_effect).
- You can't trust companies not to oversell themselves, in particular startups like this, you never take them at face value.
People are much less cynical when a company is open about what it's going to do and how, talking science and engineering instead of marketing & PR bullshit.
In this particular case I think the criticism was warranted, even if you try to only consider what was known at the time. "We are a new startup led by an inexperienced yougester and we have a product that does everything better and cheaper than the industry standard but we won't peer review" seems like a huge red flag. The Forbes fluff piece with strange and rather dubious claims regarding the level of skills of the founder adds a second layer of redflagging on top of that.
Mattis in 2018: "Goddamnit."
Bad Blood has not had the impact in SV that it should have. The stock market needs to crash and the myth of steve jobs needs to die :-(
It's not all about myths. The interest rates are still very low especially for the rate of growth. Decent returns are hard to find and people are willing to chase just about anything. Ofc, her decision to copy alot of Jobs' style made for some easy pickings.
I think the lesson here is that doing anything that interfaces directly with the physical and natural world is much harder, and those problems that have high impact have had a lot of very smart people working on them for a very long time.
It's easy to think that the formula for internet media or smartphone IT success can easily translate to these domains, and it seems that the reality is "no, it doesn't.". There is no low hanging fruit on the hard problems, as there was with the internet and smartphone revolutions.
Theranos claimed to have been doing something similar but failed due to their choice of UX improvement approach being based on technology that does not work.
An analogy in the internet-based business would be promising to improve the UX of customer support using AI and then not delivering on the AI part.
I think that your "Outsized impact" concept is interesting but I think that there is no such thing, it's just an illusion due to the speed differences of the delivery of the impact. Should Theranos was not based on pseudo-science, the eventual impact could have been no smaller than your average internet unicorn.
internet/smartphone success comes from low hanging fruit made possible by revolutions in communication technology. it does not translate to hard domains like biomedical science. these problems are legitimately hard. and quite orthogonal to soda and chatbots.
Theranos doesn't have anything to do with biomedical science, they were supposed to improve the experience of blood testing both for the patient and for the medical professionals. Their problem was that they choose to try to do it by a method that was not technically possible at this time.
Another company might try to improve the experience by improving the needles and redesign the machine to look like less offensive and scary and they might succeed in it.
It's exactly like the difference between SodaStream's success and chatbots failure, that is, betting on UX improvement using a tech that's not there.
Chatbots, SodaStream. Theranos - they don't do anything new that wasn't done before. Chatting with customer support was around since a while, Carbonating water to make soda was around since probably the industrial revolution and testing blood samples were around since modern medicine.
All these companies tried to improve the experience and reduce costs, regardless of the nature of the business being internet or manufacturing based. It's not about the domain.
EDIT: I'm not defending Theanos and I'm not going to comment about the motive of the people involved as I don't know them and I was not involved with Theanos at any time.
Cars exist, and fast cars exist, and people mod cars, so obviously, it should be possible to soup up my Honda Civic with their amazing invention.
Theranos claimed that they had technology that could perform accurate blood tests on tiny samples of blood, drawn from a finger. For many tests, this is currently believed to be impossible (with sufficient accuracy.)
One company can try to do it by putting sensors to improve the driver's situation awareness and another company can try to make the cars driverless.
Driverless cars also don't exist but apparently, enough people believe that it could be done and the research is going on.
Maybe at Theanos they never intended to make the promised machine but I don't want to join the lynch as I don't know the people involved and I can't read peoples minds.
Doesn't it? Wasn't that the main claim of the company? To have the technology that allows to do a lot of tests with very small amounts of blood? In your description it sounds like "Theranos had a great idea, unfortunately the technology was not read", like some kind of mild inconvenience that stopped something brilliant. Like "My company wants to build flying cars based on anti-matter reactors. The technology doesn't exist but, apart from that, isn't my idea brilliant?"
The rest of your comment is a straw-man argument as it misrepresents my words as I never even implied that they had a great idea or tech or anything like that. Sorry I cannot defend words that are not my own.
Yes, it was. They were trying to do more tests with less blood. That's like, you know, new advances in biomedical science.
> Theranos doesn't have anything to do with biomedical science,
They claimed to create a new method for blood testing that required a fraction of the sample size previously required. That is, by definition, biomedical science.
> they were supposed to improve the experience of blood testing both for the patient and for the medical professionals.
Yes, but that pesky biomedical science got in the way.
> Their problem was that they choose to try to do it by a method that was not technically possible at this time.
The limits of biomedical science can be a real buzzkill. But hey, the UX was great!
> Another company might try to improve the experience by improving the needles and redesign the machine to look like less offensive and scary and they might succeed in it.
It failed because it didn't work. Because biomedical science.
> It's exactly like the difference between SodaStream's success and chatbots failure, that is, betting on UX improvement using a tech that's not there.
We should all tell Merck and Pfizer to be more like SodaStream. Cancer would be a thing of a past. It's merely a UX problem.
> Chatbots, SodaStream. Theranos - they don't do anything new that wasn't done before. Chatting with customer support was around since a while, Carbonating water to make soda was around since probably the industrial revolution and testing blood samples were around since modern medicine.
I went into the forest once for a hike, it was very nice. I liked the trees. Do you like to hike? It's good for you. Modern medicine.
> All these companies tried to improve the experience and reduce costs, regardless of the nature of the business being internet or manufacturing based. It's not about the domain.
What you're trying to do never matters! Cancer can be cured. We just need to improve the experience and reduce costs!
No, Theranos did not do that. They claimed that's what they were trying to do, but they were, in reality, marketing a fraudulent product that did not work.
This is very simple. It is also a very important distinction, and it's worrying that many people here seem not to get it. This is not a "they tried and failed with the best of intentions" situation. This is not a typical failed-startup situation. This is not a product-market-fit issue.
This is a company that claimed to be improving the state of the art but was actually engaging in a deliberate deception.
You don't have to know the "motive of the people involved" to understand that Theranos' situation is fundamentally ethically different from that of a well-intentioned company that was unable to deliver on its promises. This isn't a difference in degree (of money involved or people defrauded or whatever), it is a qualitative difference. It's deeply disturbing to me that yourself and many others seem unable to see that.
Did an actual investigation found out that these people scammed the investors?
What was their end game? Live a life of fame for a few years until people start asking questions and end up broke and labelled as frauds for the rest of their lives?
The drive for better graphics in gaming fundamentally changed the face of bioinformatics and genetics, finite element analysis and by extension, almost every subfield of mechanical and civil engineering, and many others. The logistics and transportation industries have gone through a quiet technological revolution every decade as economies of scale drove the cost of computers, GPS, and other embedded electronics to the floor. The demand for laptops, mobile phones, and tablets with ever more complex apps and games is responsible for at least a 5-10x change in productivity for my EE and firmware work over the last decade as the sheer scale of work on consumer electronics around the globe drives down the cost of parts and services right as the hardware world is beginning to learn about the benefits of open source.
This reminds me a little of a situation at work. We have a director who everybody outside management knows he is full of sh.t. He never delivers anything and when you get the chance to talk to VP or CEO they agree that he needs to go. But then they talk to him and he always gets a second chance. This guy gets much more face time with our CEO then anybody else I know.
It seems that the only question remaining is how long Elizabeth and Sunny go to prison for after this brazen heist they pulled off.
Sorry to be a devils advocate but past administration loosened up rules based on which you were or were not supposed to be eligible for a loan to an extent which it should never be.
Unless you want to jail George Bush or some of his staff members, there is not so much fault around to put on people working in financial sector.
Interestingly, you have just implied that ultimately no one can be held accountable for these failures.
Isn't that a bit of a problem?
Yes, but not one to be solved by retroactively classing behaviour that wasn't a crime then as a crime now. The right solution is to criminalize the behaviour moving forward.
Just because something bad happened doesn't necessarily mean there was a crime for which an individual can be sentenced to jail time (regardless of public outcry after the fact). Here's a list of SEC enforcement actions arising from the crisis https://www.sec.gov/spotlight/enf-actions-fc.shtml
I mean, how will a person who has done that and basically become a digital leper, recover or work again in any meaningful way? Change her name, learn a new language and move to another country?
Also, when was the last time someone running an ethically clean and successful charity or social enterprise got the kind of press people like Holmes do?
Holmes is a rich narcissistic kook, but Theranos was the product of a business culture which values hyper-driven narcissistic kooks who surround themselves with exploitation and drama over steady mature professionalism.
Maybe the investors deceived themselves. If I was investing millions of bucks in a startup run by a 19 year old I'd be doing a large amount of investigation. Doesn't seem like anyone did
Edited to clarify, that "rich to begin with" refers to family money.
Wire fraud apparently carries a maximum penalty of 20 years, so they could be going away for a while. Holmes is also barred from serving as a director or officer of a public company for 10 years, due to a previous SEC settlement.
I spent a bunch of years in labs, working for the tech companies that made the "state of the art machines" that did the actual testing. Theranos wasn't only competing with LabCorp and Quest, they were also competing with the testing machine companies like Beckman-Coulter, Roche, Siemens, Bio-Rad, and many others.
So many tests get ordered for a CMP (comprehensive metabolic panel, the most common battery of tests), that you would need like 30 finger sticks to get enough blood. Theranos never clarified if they could do 30 tests on 1 drop, or 1 test per drop. That little misdirect actually matters a lot to the patient who might have to get stuck 20+ times for all the things the doctor needs.
I'm quite familiar with the way the state of the art systems work. A modern system is already testing microliters of plasma (your blood goes through a centrifuge) per test. Comparing size of blood draws is misleading. The several tubes that get drawn are for logistical reasons that don't go away if you switch to finger-sticks. For example, the law requires that a lab keep some blood on hand for emergency re-testing if it turns out you have a critical level. Maybe a tech drops your sample. Maybe the machine has a problem right when it's doing your test (happens all the time, no reason it wouldn't happen with the Theranos instrument, had it existed). How many finger sticks are required to keep some extra on hand?
Theranos was also misleading about the test time, but that doesn't get mentioned either. They claimed 4-hour test time, but compared it to the 24-hour turn around time of a major lab like LabCorp. In reality, modern systems take 8-15 minutes for most tests, depending on what it is. Large molecules (hormones, etc) and whole-blood tests can take longer, sometimes up to 1.5 hours on older machines. Nothing approaching 4 hours, though. A 4 hours test time is atrociously long.
And after all that, you still need a doctor to look at the results. Let's say the dream happened, and we all started going to Walgreens to get Theranos tested. Even if we got 30+ tests on a single finger-stick drop, we'd still need to wait 24-72 hours for the doctor to look at the results and call us.
Maybe I'm beating a dead horse at this point, but I think from the very beginning, Theranos didn't have a serious business model. I also would like anyone on HN reading this, who's interested in the medlab space, to understand that there's a lot more going on than just testing on fingerpricks and fraud here.
If any of you out there actually do have a revolutionary one-drop testing device, don't try to partner with Walgreens and open your own labs. Just sell/lease it directly to doctors and hospitals.
Really, there are already small systems for just about any test you might want to do, it's just that economies of scale for a big lab like LabCorp usually make it too comparatively expensive to run your own system, because you need to pay for the system and hire a licensed technologist to operate it. That's not just bureaucracy, either. Most current systems can have lots of weird problems that affect the results, and you need someone who understands both the medical relevance of the test (and normal/abnormal results), as well as some statistics, in order to know when the machine is operating correctly and when it's giving you subtly biased results and might need re-calibration or something.
In big cities like NYC, it's more expensive to ship the blood out of the city to LabCorp/Quest's big regional facilities, and the "big" labs inside the city are way smaller (so they cost more). So doctors are more likely to be able to swing operating their own system.
Also, some doctors charge way more than normal for their services, particularly IVF/fertility clinics. Those places always have their own machines (their clientele are also more demanding, and would expect results faster than you can get by sending out to LC/Quest).
Blood is not a homogeneous substance. In order to be satisfied that you can detect substances that are present in the person, you need to extract more than a drop of blood.
They did, they said they wanted to do ~70 tests with one drop.
(Which set off my bullshit detector)
Is it that the underlying tech is too hard or is there some basic engineering that doesn’t exist yet?
(Ignoring the fact they didn’t have a real solution / the whole thing was a scam etc)
If you pick 5 skittles out of a bag, no amount of technology can make it so you can reliably determine the frequency of each color over the whole bag.
There are other issues another comment describes well.
I’m not a medical person so I’m not sure about the statistical sample volume required for typical tests. I do know that I’ve had comprehensive testing done and they took 5 tubes the length of my finger. That’s pretty far from the drop of blood that Theranos were after.
The future has a way of returning to these things. We’ll see if there’s even a partial approach that could work soon enough. Or not.
So, can anyone answer the question, what’s gonna happen to Ms Holmes and what are the possible career trajectories she may take?
Just wanna know what a brilliant person like her could do.
Yet, they all add some good value to many people as well, despite those flaws.
[1] dunno if thats the technical term.
The genetics component has always been terrific. I've had friends uncover surprises, like one who unraveled a mystery about an undocumented and unmentioned great-grandfather, who they found out was from a different continent and shunned by the family.
Even though I work in the 'omics field, I'm still amazed every time I get an email from 23andme that a sibling or cousin has joined, with them determining that based on nothing but some spit.
I think it's a very exciting company to watch and it's just getting started.
Time is coming where we will have many companies founded by Women hit these valuations. Maybe it’ll be your daughter.
Among many things corporations can't do that natural persons can is marry.
Show her Jennifer Doudna instead, a woman who apparently gave us CRISPR/Cas9 - one of the biggest breakthroughs of recent years, if not decades.
This only shows there's plenty more women that are unsung heroes of science to discover!
https://www.sciencemag.org/news/2018/06/prestigious-prize-ov...
https://en.wikipedia.org/wiki/List_of_women_CEOs_of_Fortune_...
24/500 (4.8%) may seem not that much, but it's growing; a lot of "first female CEO of company X" shows up in linked articles.
(Hint: I don't really care if she supposedly helped develop it. It didn't actually work. She's not some kind of genuine scientist.)
I'm just gonna leave this here and suggest that most of whatever tech was developed by these 1000+ still active companies likely wouldn't have made it to market without YC:
(Also, this isn't intended as snark. I'm just cranky at the moment and seriously cannot see why it matters that Jessica "isn't sciency." My crankiness is for wholly unrelated reasons and has nothing to do with this discussion.)
The unique feature of Holmes was that she was the first woman starting and leading a (supposedly successful) start-up. Needless to say though, it was a facade. That's saddening, but having read Bad Blood I expected nothing less but the company Theranos to dissolve.
But why in the fuck would you want to hold up someone who has been indicted on criminal fraud as an example for your daughter?