Theranos

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Theranos

Postby Anaxagoras » Mon Sep 12, 2016 3:43 am

Came across an interesting history of the downfall of Theranos and its CEO Elizabeth Holmes in Vanity Fair.

It's a good case study for skeptical thinking. A lot of smart people bought into the whole company narrative. One skeptical reporter did not.

Here's how it begins:

It was late morning on Friday, October 16, when Elizabeth Holmes realized that she had no other choice. She finally had to address her employees at Theranos, the blood-testing start-up that she had founded as a 19-year-old Stanford dropout, which was now valued at some $9 billion. Two days earlier, a damning report published in The Wall Street Journal had alleged that the company was, in effect, a sham—that its vaunted core technology was actually faulty and that Theranos administered almost all of its blood tests using competitors’ equipment.

The article created tremors throughout Silicon Valley, where Holmes, the world’s youngest self-made female billionaire, had become a near universally praised figure. Curiosity about the veracity of the Journal story was also bubbling throughout the company’s mustard-and-green Palo Alto headquarters, which was nearing the end of a $6.7 million renovation. Everyone at Theranos, from its scientists to its marketers, wondered what to make of it all.


There is an almost cargo-cultish aspect here. This is Holmes:

Image

Notice the black turtleneck. Remember who else was famous for wearing black turtlenecks?

At Theranos, Holmes preferred that the temperature be maintained in the mid-60s, which facilitated her preferred daily uniform of a black turtleneck with a puffy black vest—a homogeneity that she had borrowed from her idol, the late Steve Jobs.

Holmes had learned a lot from Jobs. Like Apple, Theranos was secretive, even internally. Just as Jobs had famously insisted at 1 Infinite Loop, 10 minutes away, that departments were generally siloed, Holmes largely forbade her employees from communicating with one another about what they were working on—a culture that resulted in a rare form of executive omniscience. At Theranos, Holmes was founder, C.E.O., and chairwoman. There wasn’t a decision—from the number of American flags framed in the company’s hallway (they are ubiquitous) to the compensation of each new hire—that didn’t cross her desk.

And like Jobs, crucially, Holmes also paid indefatigable attention to her company’s story, its “narrative.” Theranos was not simply endeavoring to make a product that sold off the shelves and lined investors’ pockets; rather, it was attempting something far more poignant. In interviews, Holmes reiterated that Theranos’s proprietary technology could take a pinprick’s worth of blood, extracted from the tip of a finger, instead of intravenously, and test for hundreds of diseases—a remarkable innovation that was going to save millions of lives and, in a phrase she often repeated, “change the world.” In a technology sector populated by innumerable food-delivery apps, her quixotic ambition was applauded. Holmes adorned the covers of Fortune, Forbes, and Inc., among other publications. She was profiled in The New Yorker and featured on a segment of Charlie Rose. In the process, she amassed a net worth of around $4 billion.


After the story was published:
Absent a plan, Holmes embarked on a familiar course—she doubled down on her narrative. She left the war room for her car—she is often surrounded by her security detail, which sometimes numbers as many as four men, who (for safety reasons) refer to the young C.E.O. as “Eagle 1”—and headed to the airport. (She has been known to fly alone on a $6.5 million Gulfstream G150.) Holmes subsequently took off for Boston to attend a luncheon for a previously scheduled appearance at the Harvard Medical School Board of Fellows, where she would be honored as an inductee. During the trip, Holmes fielded calls from her advisers in the war room. She and her team decided on an interview with Jim Cramer, the host of CNBC’s Mad Money, with whom she had a friendship that dated from a previous interview. It was quickly arranged.

Cramer generously began the interview by asking Holmes what had happened. Holmes, who talks slowly and deliberately, and blinks with alarming irregularity, replied with a variation of a line from Jobs. “This is what happens when you work to change things,” she said, her long blond hair tousled, her smile amplified by red lipstick. “First they think you’re crazy, then they fight you, and then, all of a sudden, you change the world.” When Cramer asked Holmes for a terse true-or-false answer about an accusation in the article, she replied with a meandering 198-word retort.

I think I've heard that line before. It's a variation on the Galileo gambit: They said Galileo was crazy too!
Except here, almost everyone believed in her and her company, until this one reporter came along. She did not encounter a lot of resistance from "the establishment", they embraced her and threw money at her.

After he wrapped up, the leaders of Theranos stood before their employees and surveyed the room. Then a chant erupted. “Fuck you . . .,” employees began yelling in unison, “Carreyrou.” It began to grow louder still. “Fuck you, Carreyrou!” Soon men and women in lab coats, and programmers in T-shirts and jeans, joined in. They were chanting with fervor: “Fuck you, Carreyrou!,” they cried out. “Fuck you, Carreyrou! Fuck. You. Carrey-rou!”


Anyway, I think it's a good read.
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Re: Theranos

Postby Pyrrho » Sat Sep 17, 2016 4:33 pm

The pharma trade for a very long while was focused on "blockbusters", but those salad days are pretty much gone, except possibly for innovations in gene splicing. The device sector of the pharma market is highly competitive but the ROI is fairly low, because there's not much profit margin per test. Therano's alleged innovation would have meant cheaper costs per test and potentially better profit margin per test. That's why investors were so eager. Why they failed to perform due diligence is another question--I suppose it's a form of high-stakes gambling. It was always suspicious because of the failure to produce data. That is always a red flag.

There is a "long game" involving the FDA that all pharma companies play. This one failed.
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Re: Theranos

Postby Anaxagoras » Wed Mar 14, 2018 11:59 pm

Two years later the wheels of justice have finally turned.

https://www.sec.gov/news/press-release/2018-41

Theranos and Holmes have agreed to settle the fraud charges levied against them. Holmes agreed to pay a $500,000 penalty, be barred from serving as an officer or director of a public company for 10 years, return the remaining 18.9 million shares that she obtained during the fraud, and relinquish her voting control of Theranos by converting her super-majority Theranos Class B Common shares to Class A Common shares. Due to the company’s liquidation preference, if Theranos is acquired or is otherwise liquidated, Holmes would not profit from her ownership until – assuming redemption of certain warrants – over $750 million is returned to defrauded investors and other preferred shareholders. The settlements with Theranos and Holmes are subject to court approval. Theranos and Holmes neither admitted nor denied the allegations in the SEC’s complaint. The SEC will litigate its claims against Balwani in federal district court in the Northern District of California.


Seems like she kinda got off easy, all things considered. No admission of wrongdoing, no crime. Just a fine and a sort of very mild probation.
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Re: Theranos

Postby Doctor X » Thu Mar 15, 2018 4:36 am

"Screw the laws, I've got looks and money!"

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Re: Theranos

Postby Pyrrho » Thu Mar 15, 2018 10:50 am

Any compensation to the patients who were diagnosed based on the bogus blood tests?
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Re: Theranos

Postby Anaxagoras » Thu Mar 15, 2018 3:30 pm

Doesn't appear to be. I'm sure they could have a class-action lawsuit if some people were harmed.

Haven't really heard much about that side of things, tbh.
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Re: Theranos

Postby shemp » Sat Mar 17, 2018 7:19 pm

She should have been stripped of everything she owns and sent to Lesbo Bitch prison.
"It is not I who is mad! It is I who is crazy!" -- Ren Hoek

"[... it seems most strange that... ] the Creator of Heaven and Earth resorted to the womb of a certain Jewish lady, grew there for nine months and was born as an infant, and afterwards grew up and was betrayed into the hands of his enemies who sentenced him to death and executed him, and that afterwards... he came to life and returned to his original place. The mind of a Jew, or any other person, simply cannot tolerate these assertions. If you have listened all your life to the priests who have filled your brain and the marrow of your bones with this doctrine, and it has settled into you because of that accustomed habit. [I would argue that if you were hearing these ideas for the first time, now, as a grown adult], you would never have accepted them." -- Rabbi Moses ben Nahman, defending the Talmud at the Disputation of Barcelona, July 1263.

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Re: Theranos

Postby Anaxagoras » Sat Mar 17, 2018 11:28 pm

Is there a lesbo bitch prison? I should Google that to find out.






Oooooh! :couchpotato:
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Re: Theranos

Postby sparks » Sun Mar 18, 2018 9:09 am

shemp wrote:She should have been stripped of everything she owns and sent to Lesbo Bitch prison.


No. Turn her brain into a fine pink mist with High Velocity Hollow Point Lead Poisoning. Save tax payer dollars.

As an example to others... of course.
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Re: Theranos

Postby Doctor X » Sun Mar 18, 2018 11:52 am

Anaxagoras wrote:Is there a lesbo bitch prison? I should Google that to find out.


Image
Spoiler:
Image
どういたしまして。


--J.D.
Mob of the Mean: Free beanie, cattle-prod and Charley Fan Club!
"Doctor X is just treating you the way he treats everyone--as subhuman crap too dumb to breathe in after you breathe out."--Don
DocX: FTW.--sparks
"Doctor X wins again."--Pyrrho
"Never sorry to make a racist Fucktard cry."--His Humble MagNIfIcence
"It was the criticisms of Doc X, actually, that let me see more clearly how far the hypocrisy had gone."--clarsct
"I'd leave it up to Doctor X who has been a benevolent tyrant so far."--Grammatron
"Indeed you are a river to your people.
Shit. That's going to end up in your sig."--Pyrrho
"Try a twelve step program and accept Doctor X as your High Power."--asthmatic camel

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Re: Theranos

Postby shemp » Sun Mar 18, 2018 3:01 pm

sparks wrote:
shemp wrote:She should have been stripped of everything she owns and sent to Lesbo Bitch prison.


No. Turn her brain into a fine pink mist with High Velocity Hollow Point Lead Poisoning. Save tax payer dollars.

As an example to others... of course.


But I approve of my taxpayer dollars being spent on Lesbo Bitch Prison. With live webcams and on-demand video of course.
"It is not I who is mad! It is I who is crazy!" -- Ren Hoek

"[... it seems most strange that... ] the Creator of Heaven and Earth resorted to the womb of a certain Jewish lady, grew there for nine months and was born as an infant, and afterwards grew up and was betrayed into the hands of his enemies who sentenced him to death and executed him, and that afterwards... he came to life and returned to his original place. The mind of a Jew, or any other person, simply cannot tolerate these assertions. If you have listened all your life to the priests who have filled your brain and the marrow of your bones with this doctrine, and it has settled into you because of that accustomed habit. [I would argue that if you were hearing these ideas for the first time, now, as a grown adult], you would never have accepted them." -- Rabbi Moses ben Nahman, defending the Talmud at the Disputation of Barcelona, July 1263.

"God is the supreme excuse for human adults to absolve themselves of any obligation to preserve natural resources for their own children during their lifetime." -- Gene Ray

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Re: Theranos

Postby sparks » Sun Mar 18, 2018 5:28 pm

Then vote for Trump.

Again. :)
You can lead them to knowledge, but you can't make them think.


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