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Inside Theranos: Yikes

I always wondered what sort of place Theranos must be (have been) to work at, and now this piece at Vanity Fair answers the question: hellish. The treatment of chief scientist Ian Gibbons, as presented in the article, will illustrate the point:

Gibbons, who was diagnosed with cancer shortly after joining the company, encountered a host of issues with the science at Theranos, but the most glaring was simple: the results were off. This conclusion soon led Gibbons to realize that Holmes’s invention was more of an idea than a reality. . .While Gibbons grew ever more desperate to come up with a solution to the inaccuracies of the blood-testing technology, Holmes presented her company to more investors, and even potential partners, as if it had a working, fully realized product. Holmes adorned her headquarters and Web site with slogans claiming, “One tiny drop changes everything,” and “All the same tests. One tiny sample,” and went into media overdrive.

There, fellow scientists, doesn’t that sound like fun? Gibbons himself attempted suicide after getting a phone call from the company that he believed meant that he was about to be fired (and died soon afterwards); the pressures that he was working under sound absolutely intolerable. The first official communication his widow got from the company afterwards was a demand that she immediately return any confidential Theranos property.

The company’s focus on secrecy is also worth noting. Here’s what the article has to say about Elizabeth Holmes’ right-hand man, Sunny Balwani (emphasis mine):

When employees questioned the accuracy of the company’s blood-testing technology, it was Balwani who would chastise them in e-mails (or in person), sternly telling staffers, “This must stop,” as The Wall Street Journal reported. He ensured that scientists and engineers at Theranos did not talk to one another about their work. Applicants who came for job interviews were told that they wouldn’t know what the actual job was unless they were hired. Employees who spoke publicly about the company were met with legal threats. On LinkedIn, one former employee noted next to his job description, “I worked here, but every time I say what I did I get a letter from a lawyer. I probably will get a letter from a lawyer for writing this.” If people visited any of Theranos’s offices and refused to sign the company’s lengthy non-disclosure agreement, they were not allowed inside.

Sounds like a productive R&D environment to me! Honestly, folks, any time you see this nobody-talk-to-anyone stuff going on in what’s supposed to be a research-driven company, it has to be a gigantic warning buzzer. You can’t work like that. You shouldn’t be expected to work like that, and anyone who thinks that it’s a good idea should be avoided.

The whole article is well worth reading, and it will increase your admiration of the Wall Street Journal‘s John Carreyrou, who broke the story of Theranos’ troubles. There’s mention of a talk that Holmes gave to the assembled employees when this all first hit the papers, a meeting that ended up in what sounds a bit like a 1984-style Two Minutes Hate directed at Carreyrou. So there’s another tip: when someone criticizes your company and the response is to chant insults in unison, some very important things have gone wrong. Run, do not walk. Save yourself while you can.

83 comments on “Inside Theranos: Yikes”

  1. Erebus says:

    >”Honestly, folks, any time you see this nobody-talk-to-anyone stuff going on in what’s supposed to be a research-driven company, it has to be a gigantic warning buzzer.”

    What’s interesting is that it’s exactly the opposite of the old Bell Labs formula.

    Consider this excerpt:

    “[Chairman Melvin Kelly’s] fundamental belief was that an “institute of creative technology” like his own needed a “critical mass” of talented people to foster a busy exchange of ideas. But innovation required much more than that. Mr. Kelly was convinced that physical proximity was everything; phone calls alone wouldn’t do. Quite intentionally, Bell Labs housed thinkers and doers under one roof. Purposefully mixed together on the transistor project were physicists, metallurgists and electrical engineers; side by side were specialists in theory, experimentation and manufacturing. Like an able concert hall conductor, he sought a harmony, and sometimes a tension, between scientific disciplines; between researchers and developers; and between soloists and groups.

    ONE element of his approach was architectural. He personally helped design a building in Murray Hill, N.J., opened in 1941, where everyone would interact with one another. Some of the hallways in the building were designed to be so long that to look down their length was to see the end disappear at a vanishing point. Traveling the hall’s length without encountering a number of acquaintances, problems, diversions and ideas was almost impossible. A physicist on his way to lunch in the cafeteria was like a magnet rolling past iron filings.”

    (From: http://www.nytimes.com/2012/02/26/opinion/sunday/innovation-and-the-bell-labs-miracle.html)

    …For that matter, even the Manhattan Project fostered a lot of open collaboration.

    Large scientific endeavors are simply incompatible with furtive atmospheres of secrecy.

    1. Synthon61 says:

      The LMB in Cambridge, England and the new Francis Crick Institute in London are designed to encourage communication, particularly between disciplines. You can learn a lot from a coffee break.

      1. Calvin says:

        The Crick. Yes, the plan was to foster innovation through collaboration, but anybody who has been close to it will know that there’s a fantastic amount of argument, intrigue and politics going on there. All the funders are desperate to get out of the (massive) commitment, and all the academics are fighting tooth an nail over space, office sizes and their pie size. There is a furious turf war going on between the universities and institutions involved. Classic academic warfare. It’s (unfortunately) typical academic politics and a lack of collaboration. Maybe once the scientists (rather than the profs) get in there that will change. I really hope so.

        1. H3K27ac says:

          Care to share?

        2. enotty says:

          ah, yes, but they are united by a common grievance over parking.

      2. Kelvin Stott says:

        I don’t know about the Crick, but certainly the LMB was a model of spontaneous and open interdisciplinary discussions and collaborations between different groups while I was there in the 90’s. I was also fortunate enough to work with the LMB’s founder Max Perutz at the lab bench, so had the chance to hear many stories about the early days when really bright people were brought together to tackle the biggest questions in biology at the time.

    2. don jefe says:

      Exactly. The “knowledge economy”, where we all sit in a glass tower in front of computers and create, simulate and design from pure concepts is suck a crock of bull.

      To do even half-decent engineering work, one needs the perspective of the other sciences, and technicians, production people, assembly workers and testers, to build stuff that can scale out and actually be manufactured.

      The “Intellectual Property is All You Need”-cult is one of the reasons China is kicking our butts.

  2. Anon says:

    The more that comes out, the clearer it becomes that Holmes will be sued by investors, or put away for a long time.

    1. Phil says:

      What are they going to get from her at this point? She has essentially zero net worth.

      1. Anon says:

        Her clothes? 🙂

      2. Brett says:

        Bet they don’t get a single drop of blood…

    2. oldnuke says:

      I think the best possible outcome is c) Both.

  3. Chrispy says:

    Glassdoor for Theranos is pretty funny — they have some obviously fake, enthusiastic entries and lots of ones like this:

    “Lots of Broken Dreams”

    Current Employee – Medical Courier in Scottsdale, AZ

    Doesn’t Recommend
    Negative Outlook
    Disapproves of CEO

    I have been working at Theranos full-time (More than a year)

    Pros
    Most of the co-workers. Generous paid time off and better than average pay. Some great friends and connections were made here. Fun company outings. A chance to feel like you were part of something.

    Cons
    Coming here with the hopes and dreams that you were really part of something bigger. Possibly changing health care. Only to find out it was a big scam. Nothing worked. It was all a bunch of over hyped lies and deceptions. I feel bad for the people still there holding onto the lies and the the belief that Ms Holmes actually cares about you. At the end of the day she does not and you will be left with nothing. There were cliques within the workplace. If you were not part of that special group or ethnic background then forget it, you were an outcast and the topic of rumors or gossip. And management let it happen. Even if it was brought to their attention they felt it would work itself out. Bullying was rampant among employees and you would feel helpless against it. Why were certain employees allowed to get away with sitting in the parking garage for hours. Or punching in 3 hours early and milking the clock. In a sense. Zero accountability for some employees and too much for the ones who were actually doing their job.

    Advice to Management
    Close and shut the doors before you kill someone

  4. Asoc says:

    Siloing is unfortunately the rule rather than the exception in many organizations. Places like Apple, many hedge funds and banks (even some academic groups) make it deliberately difficult to find out what the person a cubicle over is doing. In Apple’s case this may lead to perceived efficiency. ..in other cases it is sort of a firing squad effect, no one did anything wrong if everyone else was just following orders.

  5. SirWired says:

    The entire pitch consisted of a rhetorical question: “What if we could run a bazillion tests off of a finger-stick, wouldn’t that be amazing?” Well, yes, it would. And it’d also be amazing if I could buy self cleaning dishes or a car that doesn’t need fuel or batteries. That doesn’t mean any of those things are possible.

    I have no idea how they lined up a single investor for this. It’s telling that the usual biotech VC’s stayed Very Far Away; all their funding came from tech VC’s that have no idea how the healthcare industry works. (Hint: You can’t do a “Public Beta” on crucial medical tests you charge patients for.) Holmes had absolutely zero qualifications or any evidence she had any idea how to achieve her goal.

    If I dress my lovely wife up in a turtleneck and have her run around asking for money to answer a rhetorical question, can she also collect millions and millions?

    1. Anony says:

      How did a big pharmacy chain like Walgreens formed partnership with theranos?

      1. asoc says:

        Walgreens sells homeopathy too.

    2. DV Henkel-Wallace says:

      > all their funding came from tech VC’s that have no idea how the healthcare industry works.

      It’s actually worse than that. To copy my comment on HN: Holmes and Draper were neighbors when she was growing up and his kids were childhood friends of Holmes’s. Her dad’s friend, Don Lucas was the Ellison connection. (Her parents are well connected in Washington D.C.)

      ATA, the other investor, does pretty much do only tech. I notice Theranos is still on their web site.

      In general I don’t know why they are described as the toast of SV by non-local journos — despite that big building on page mill they were never really that prominent IMHO especially because of their secrecy.

      There’s a ton to criticize about the culture of the valley but FWIW Theranos always stuck me more of a (non-Boston) east coast story that happened to be located in Palo Alto.

      1. Bagger Vance says:

        Maybe you know more about it then: what was the Enron connection? The article just mentions that her father worked there then lets it slide completely. Coincidence or clue?

      2. joeblo says:

        Although i liked some of the color, the comments about being the “toast of SV” and that Theranos was a “10 min drive to Infinite Loop” made me less confident in the reporting…
        BTW- It’s only 10 minutes door-to-door at 3am if you hit 100mph on I280-

  6. Definetlynotworkingoncancerdrugs says:

    So here’s a question. If, lets say, a company you work at *does* have an enforced secrecy policy and they seem to only hire fresh PhDs or PostDocs. What are you to do? Who do you go for help?

  7. Doctor Memory says:

    The sad thing is that this sort of nonsense will sound instantly familiar to anyone who works in the software engineering industry: it’s very self-consciously a poor man’s copy of the google / apple working environment. Everything top secret, to the point of not being able to talk to your coworkers? Check. Insane hiring process that doesn’t disclose actual job descriptions to candidates until hired? Check. Self-consciously awkward team-building exercises? Check. Deliberately over-specified confidentiality agreements enforced with ludicrously over-the-top legal bullying? Oh yes indeed.

    Google and Apple, of course, get away with this because (a) they have profitable, popular products, and (b) their internal cultures, weird as they are, were grown organically and in response to actual incidents. But Theranos, like basically every other over-valued tech startup, cargo-culted all of the worst aspects of their predecessors, because if you build that runway surely the plane full of money will land one day, and in the meantime it always feels good to have that level of power over your subordinates.

    Funny story about that plane…

    1. JeffC says:

      Yeah, I’d have to agree with that broadly. However, the Apple culture (under Jobs) is very interesting and frequently misunderstood. The secrecy of Apple internally, is not quite the same as it is externally. Externally, it was all abut trying to make sure that the reveal of the new product was “magical”; if it was widely leaked then the effect is lost. That’s the Jobs salesman part. So sure, you’ve got to have a level of internal secrecy to allow that. It’s the same in drug discovery; we’d don’t go round talking about what we’re working on or what the compounds are until years after we’ve done it.

      But the internal secrecy that Jobs (apparently) insisted on was a result of his early experiences where other parts of the business wanted to kill his cool new ideas because they were an internal threat. This is the “Corporate Antibodies” idea and secrecy and silos is a way of protecting those cool new ideas and products. Jobs described these as skunk works. It was about protecting and incubating new ideas. And I think there is some value in that.

      I don’t think, ultimately, Holmes as the experience, humility or brain power to get to grips with the difference. She copied the media personality she saw in Jobs rather than spending a little bit more time thinking and studying what was going on.

      And of course Apple launches products that generally work as advertised (within reason) so Holmes big issue was to sell something that she knew didn’t work even if she wanted to believe that it did. I doubt she’ll go down for any of this (she is supremely well connected so I’d suggest a fine at most), but I can see Theranos withering away within the next 1-2 years. A footnote in history, but a fine lesson for all the coders and their VC friends that biology does not play ball in quite the same way as code.

      As an aside, what most pharma people don’t know is that diagnostics is an extremely difficult business, with a terrible business model and environment. Making a diagnostic is easier maybe, but getting it approved, coded and reimbursed is a form of hell. Very very hard to make any money. Makes drug discovery look like a walk in the park.

      1. Doctor Memory says:

        Yeah, I’m an ex-googler myself, and as much as I found a lot of these aspects of the company annoying, they at least had a point in the context of google’s history, market position and infrastructure. I’m not always convinced that the decisions they made were correct, but I was usually pretty confident that they were at least considered. And also, as you correctly note, the way that those decisions played out internally was often very different than the way they were perceived externally.

        But as you say: Holmes just tried to xerox the PR version of The Jobs Way without actually doing the work. So here we are.

        1. JeffC says:

          Agreed. 100%. Theranos is a classic cautionary tale I guess.

        2. RM says:

          Given the history of the relationship between Xerox and Apple (the Apple Macintosh copied a bunch of the technologies which Xerox PARC developed, and which were openly demonstrated, pre-commercialization, to people from Apple) the use of the term “xerox” in a discussion about copying the lack of openness in product development is rather ironic. Xerox PARC was pretty much the antithesis of siloing and hush-hush development, and is regarded as an excellent model if your main goal is developing innovative, world changing technologies.

          Though if you’re more concerned with selling people on sleek products which lack basic functionality, then, yeah, you might seek your role models elsewhere.

        3. premortem says:

          Tangentially, what type of area in Google were you working in to find “Everything top secret, to the point of not being able to talk to your coworkers?” That’s true in certain specific organizations, on certain files in the codebase, and for certain early-phase projects usually where the leads sold VPs the idea that they needed secrecy against ‘internal antibodies’. (Which, yeah, I suspect is generally unhelpful to the project and the ultimate result.) But all of this applies to rather a small percentage of software engineers at any time. Typical source code is visible to everyone, and typical bugs.

          Google has its cultural defects, but I don’t see internal secrecy high on the list. Externally, for sure, external secrecy is a flaw in the corporate character.

          1. asoc says:

            Recall the exclusive cafeteria for the google “social” (plus) team.

  8. Emjeff says:

    I could do without the race-baiting “white men” non-sequiturs in the VF article…

    1. EM says:

      We all could, but this actually hints at a significant part of the story, one that Vanity Fair is neglecting to cover because it doesn’t fit their worldview: Criticism of Theranos was repeatedly cast as criticism of Holmes, and therefore ignorable as mere sexism. The warning signs were there, but you had to risk being branded un-PC to point them out too strongly.

      This, too, is a problem in tech environments and in the Valley.

      1. Hap says:

        It isn’t good when you won’t question your assumptions (it makes it hard to maintain any sort of intellectual honesty), but this doesn’t seem like a particularly liberal failing. Lots of people looking for money have used this methodology – tell a story good enough that your mark wants to believe it and you will have a hard time getting away without getting money.

        he intellectual failing is seeing this and then not asking, “What could I do differently to avoid this?” The hype machines and the money machines might not be the same people – the hype machines sort of got what they wanted, while the money machines…didn’t.

      2. Emjeff says:

        EM; outstanding point, and one that I agree with completely. It is also why she is being handled with kid gloves now and will probably not be punished to any significant extent.

      3. Passerby says:

        Some of it was sexist though, and some plain jealous: for instance the undue emphasis on her clothing style, the constant drumbeat about how she was apparently a spoilt 19 year old kid from Stanford etc. Theranos blew it big time and Holmes needs to be held fully accountable, but I also think she was subjected to some stuff that most men in Silicon Valley would not (when they do it it’s just cool).

        1. Phil says:

          The emphasis on her clothing style had less to do with her gender and more to do with the fact that she was (is she still?) a walking Steve Jobs caricature. When Steve Jobs did it, it was cool, but he wasn’t trying to carbon copy someone else’s style.

        2. aguy says:

          Whether it’s “socially just” or not, we live in a youth-glorifying culture and (young, female) sex sells – so when we’re told that the person helming a company developing a scientific breakthrough is also an attractive young female, and that female is also blatantly evoking/biting the iconic style of someone who symbolized disruptive genius, our bullshit meters SHOULD be spiking.

          As it is, if she’s not taken as seriously as a man, I bet the consequences of her fraud won’t fall as heavily on her as they would on a man, either – and that too is sexism, but you won’t see many feminists railing against it.

      4. Antron Argaiv says:

        Holmes’ gender is irrelevant.

        The fact that she spent one year at Stanford, and then dropped out because she had this great idea and started a company to exploit it is the issue.

        Look: there are some bright 19 year olds out there, but I have to be a bit more skeptical when one of them, with NO chemistry, medical or diagnostic education past the first year of college, claims to have an idea for a revolutionary new diagnostic instrument.

        I’m an EE. I get how Apple and Google and the rest can build stuff. I also know that I didn’t go into Biology because Organic Chem scared the pants off of me. And, if you want to design diagnostic instruments, it would seem to me that knowing how the chemistry involved works would clue you in as to whether implementation of your nifty idea is even feasible.

        Again, this has nothing to do with Holmes’ gender, and everything to do with her (to put it charitably) “unwarranted optimism” and overconfidence in her own ability. Some might even call it hubris.

        At this point, though, she has been told quite clearly that there’s a fundamental problem with her products, and her continued insistence (in the fashion of Muhammed Saeed al-Sahaf) that Theranos and their products are just fine, thank you, is starting to sound awfully like fraud.

    2. Bagger Vance says:

      Glad to see someone besides me notice it. As you say the biggest thing on Holmes’ side was the tech industry looking for a “great white hope” female tech executive, which they ‘need’ to demonstrate ‘diversity’. So to take shots at all the ‘old white men’ was … backwards, shall we say. I almost thought the writer was being subtly snide.

      The points made above about this sounding like a cargo cult were also well taken.

  9. pz says:

    I think John Carreyrou deserves Pulitzer for his work on this one, especially considering that at the peak of hype most of the mainstream (Forbes for example) media all rained praises down on her. If you looked back on that what a glory that is. Think what harm would do to the patients if this has continued to this day.

  10. Daen de Leon says:

    Reading Theranos’s patent portfolio is a fun way to spend an afternoon. Anyone used to dealing with real patents will very quickly be scratching their heads and asking themselves ‘WTF?’ There’s hardly anything touching on any of their core technology; a large number seem to be largely about exciting new methods for ordering & billing tests (maybe that is their core technology, IDK)

    I suspect this is another diagnostic for a Very Dodgy Company.

  11. andy says:

    I have no background in medicine or biochem besides a few half-remembered university chemistry courses, so I have to ask: did Theranos’s technology even pass the sniff test? Was there some sort of actual scientific underpinning to it, or was it pie-in-the-sky from the getgo?

    1. Phil says:

      No, it did not ever pass the sniff test. It reminds me of Tenacious D’s classic, “City Hall” (linked, NSFW).

      “The second decree: no more pollution. No more car exhaust or ocean dumpage. From now on, we will travel in tubes!

      …Get the scientists working on the tube technology immediately, chop chop.”

    2. anon says:

      You probably know enough chemistry to sniff this:
      When The New Yorker reporter asked about Theranos’s technology, she responded, somewhat cryptically, “a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”

      1. What in the actual fsck (PhD in Microbiology, 10+ years in drug discovery)?

      2. Rongeur says:

        Well that sure is a bunch of assorted science words.

      3. Xplo says:

        Aside from the grammatically-painful “a chemistry is performed”, this is a stock description of how chemistry testing works in a hospital lab, right down to the specific language (“generates a signal”). I suppose this was a cut and paste from somewhere.

        She might as well have said “it works just like any other lab work!” which would have been just as true (especially since they turned out to be using industry-standard instruments to do the actual analysis) and just as useless.

  12. MoMo says:

    I just received a notice that Theranos is hiring organic chemists. Don’t stampede HR department and its your chance to get in at the ground level- or below ground level.

    Actually, the Gates of Hell level.

  13. dave w says:

    Seems interesting that Wall Street is surprised when these “fluff” companies (Theranos, Valeant, etc.) implode… as if the Mainstream Business Community had taken them at face value in the first place.

    1. Anon says:

      Wall street doesn’t value companies based on reality. It values companies based on what other people perceive them to be worth – because perception *is* reality.

  14. Hap says:

    All the other things seem nuts, but I thought the NDA for visitors wasn’t completely unfounded (well, it wouldn’t have been if they’d actually had something).

    Give credulous investors with a story in mind enough rope….

  15. myma says:

    As much as I admire the work of the WSJ reporter, reading the two 483’s that were issued to Theranos in Sept 2015 – one month before the article and the dramatic visit from Boies to the WSJ floor – is telling enough. The two 483’s read like Theranos had zero knowledge of FDA regulations, even the chapter headings of the regulations. Wrong Class for the device, customer complaint system is faulty, no CAPA control, no design Controls / no design validation, no Design History File, no software validation, no QA sign off on documents, no auditing of suppliers, … The FDA inspectors could probably call it a day after, like, a day.

  16. JimM says:

    Holmes adorned her headquarters and Web site with slogans claiming, “One tiny drop changes everything,” and “All the same tests. One tiny sample,” and went into media overdrive.

    This is oddly resonant with homeopathy — with higher-order overtones well into loaves and fishes territory.

    It’s amazing it got as far as it did.

  17. Hooli says:

    It’s one thing for Silicon Valley to come up with yet another product for social media, communication, crowd-sourcing data, etc, but healthcare is a different ball game. A bad (e.g. Hooli) smartphone results in only a bad ~$500 purchase, whereas bogus healthcare diagnostics are life threatening. On that note, Shkreli, in his twisted logic, recently conflated the pricing of his smartphone with the price of an EpiPen. In healthcare and bioscience, the purveyors and regulators of “disruptive” technologies (or marketing schemes) need to be extra vigilant of potentially “destructive” technologies/marketing schemes. I wonder when genetically engineered humans (made-to-order in vitro CRISPR human embryos to-go) will be on the market. The market is always right, correct?

    https://www.youtube.com/watch?v=ELYVpikRNEE

  18. E.P.Awesome says:

    The non-disclosure agreements followed by the immediate legal response for those who spoke publicly about the company in any way…sounds…vaguely …familiar. Where have we been reading that about in a different context?

  19. AnonSTM says:

    BioCellection: the future Theranos

    http://www.biocellection.com/

  20. Fraud Alert says:

    Their co-founder / CSO Ian Gibbons died after a suicide attempt and not due to cancer. can someone confirm this ??

    He had made it amply clear to his wife that ” the fundamental premise of this company was not scientifically feasible” —- FRAUD.

    is Holmes not sent to the slammer because she is a woman or has incredible connections ? Holmes is a female version of Bernie Madoff.

    1. Anon says:

      Yep, fraud, and cover up, and deception, and more cover up.

      Why isn’t she behind the slammer already? I guess the only reason is because it’s still a private company where directors are legally protected, while the case of intention to defraud is not easy to prove with such a sweet, innocent, beautiful, inexperienced, and well-connected little girl. Basically, she would play the bullied victim role too well to the jury.

    2. MTK says:

      Bot the SEC and DoJ have launched criminal fraud investigations.

      This won’t be nearly as easy as to prove, from a investor perspective, as a pyramid scheme. In those cases, monthly statements were falsified, accounts were bogus, etc.

      This is a little different. VC investors know that large risks are present and they conduct a large amount of due diligence, so unless Theranos completely misrepresented or falsified data, it might be tough to determine if the line between hype and criminal fraud was crossed.

      It’s also complicated by the fact that the victims of any such crime are probably not going to be particularly cooperative. If you’re Draper you’re looking to protect your investment, not bring it down at this point. They’ll tell investigators, “Oh no, we knew that the technology wasn’t fully developed yet.” The last thing they want is the company to go completely belly up. The civil lawsuits that Theranos is facing at this time are, to the best of my knowledge, from customers, not investors.

      The fact she’s a woman has little to do with why she’s currently not in jail. It’s because this is going to take some work to demonstrate it rises to the level of criminal investor fraud. Consumer fraud may be a different story.

  21. Fraud alert says:

    Looks like institutional investors (representing your 401K, pensioners ) have made majority of the $ 700 million in investment that Theranos got.

    I’d like to read the “DISCLOSURE STATEMENTS” made to these investors. Heads must roll.

    Clearly Holmes can be sued for misrepresentation and LIES. Why have we not seen lawsuits already ???

    1. Nick K says:

      So, if I understand this right, the VC’s smelled a rat and mostly stayed away while John and Jane Doe got stiffed because their pension fund managers had invested in this POS? Truly disgusting if true.

  22. Jose says:

    I think it’s stunning the prof in medicine (Phyllis Gardner) said one-drop testing was not possible, but Holmes still somehow convinced her advisor in chem-eng (Channing Robertson) to support it? bold. Maybe even mentally ill ?

  23. Earl Boebert says:

    You think the affluenza defense was bad? Brace yourself for the mythomania defense.

  24. If I tell you I will be sued says:

    As a former Theranos employee all I can say is THANK YOU to everyone coming forward with all this! We were all terrified not just for losing our jobs but for being sued (hence my anonymous identity even here). I was threatened multiple times when bringing up regulatory issues and was even written up for making a good quality decision because it was “above my paygrade”…. I should have instead gone to one of my SEVERELY incompetent superiors/managers who had never even stepped foot inside a lab or biotechnology company let alone managed one. The motto was “fake it til you make it” which was voiced by middle management time and time again at every meeting and with every issue we brought forward.

  25. Once upon a time @ 181 Del Medio Ave #308 says:

    Mention of the CEO’s AACC presentation somehow takes me back a couple of decades to a combinatorial chemistry ted talk at a combinatorial chemistry ted meeting given by a real life Ted (known at his previous institution but one as “Captain Entropy”), in which every sentence and the answer to every question was veiled by the word “proprietary.” As my old granny always used to say, “empty vessels make most noise.”

    As for due diligence, for the benefit of chip-heads it’s usually pretty simple in the life sciences – commission company literature search, select patent filter and act accordingly.

  26. lynn says:

    It seems that due diligence was lacking in this whole Theranos disaster. When VCs want to invest in health science don’t they hire a bunch of scientific experts to consult? A reasonable scientific consultant should not be risk averse, should be open to innovation, but should ask tough questions. I’ve done a good amount of consulting for VCs looking at small companies and/or compounds in the antibiotic space. Whether I think the ideas are crackpot or of interest, I try to give a critical overview, pros and cons – but mostly I come up with a list of questions that must be answered to validate the concept. Sometimes there is data already in hand; most often it is missing. So I note that the investor must demand that the questions be answered, that data must be produced before a large commitment is made [not to reach the final goal, just to convince that the critical questions re being rigorously addressed]. Give them time, maybe a little money to get the answers – but be skeptical. No one [who ultimately provided funding] seems to have asked the basic “could it possibly work?” question about Theranos.

  27. Li Zhi says:

    My comments are way above my pay grade, but I think Holmes’ behavior pretty typical of the entrepreneurial maverick. It is an interesting question whether she was faking it or not. It seems to me that time will tell, she’s young and should have time for several more colossal failures. To the Neanderthals here commenting on her copying from others, your comments smells to me of sexism. I bet you design and sew together your clothes every morning – so as to not copy your fashion from others? What a specious argument. “Oh, look she’s copying from the success of others! Shame on her!” My real question, and I admit that I’ve not looked for an answer, is: how much effort did she exert to FIX her/theranos’ fundamental technology? If she ignored it, then she was/is just a snake oil saleswoman; if she spent a significant amount of money working on the problem (paying top-talent to work on the problem) (a la skunk-works, perhaps) then I’d just say her reach outstripped her grasp, and bravo. As far as the “check list” approach to VC; if there weren’t a LOT of uncertainties, it wouldn’t be a risk of capital, and you wouldn’t need VC. I would say that after 5 years or so, (say by 2010) there should have been more answers than questions, and this doesn’t appear to be the case – some of the VCs should have realized (perhaps they did, follow the money…). Also, isn’t it at least possible – if not likely – that Gibbons was part of the problem? That his illness prevented him from actually getting the needed science/technology done? Starting a new company with a new technology isn’t for the weak minded nor the weak of heart. Of course she’s focused and has difficulty listening to others, duh.

    1. Xiao-Bu says:

      She wore a black turtleneck religiously, going as far as to cool the office down to accommodate this image (clearly it wasn’t simply because turtlenecks are the most comfortable clothing available). Ask anyone on the street “who is famous for wearing only black turtle necks?” and they will answer you with “Steve Jobs”. It is clearly not a coincidence, but a very intentional effort by Holmes to emulate her idol. The concept was even lampooned on Silicon Valley (the HBO series), when the character Erlich, a self-professed Steve Jobs wannabe, wore a black turtleneck to TechCrunch Disrupt. However we feel about someone emulating their idols, and pointing out this fact, is not sexist. In my opinion, I would say that telling of her inescapable fraudulence, if not evidence of serious neurosis.

    2. Xiao-Bu says:

      ” Also, isn’t it at least possible – if not likely – that Gibbons was part of the problem? That his illness prevented him from actually getting the needed science/technology done? Starting a new company with a new technology isn’t for the weak minded nor the weak of heart.”

      Wow. Your comments are way above your pay grade indeed, and on par with the craven thoughts that I imagine are racing through Holmes’ head right now.

    3. aguy says:

      “My comments are way above my pay grade”

      Yes, they certainly are.

      Your accusations of sexism are specious; in fact, they are so poorly supported that “specious” may not even be the right word. Maybe “dogwhistle” comes closer?

      Anyone in the field Holmes was supposedly trying to disrupt – that is, clinical laboratory testing – could tell you that Theranos never had a plausible technology to begin with. This is not because they’re desperate to hold onto their jobs in some metaphorical buggy whip factory, but because they have actual education in the science underlying this sort of testing that explains why that technology was implausible. It is not a coincidence that Theranos refused to reveal how their technology actually worked, that they refused to provide any evidence that it actually worked, and that they eventually turned out to not be using it at all; it’s because their promises were always garbage from day 1. You ought to be embarrassed for criticizing Gibbons for not having the ability to conjure impossible technology out of thin air – which was surely above HIS pay grade, and everyone else’s too.

    4. Jane says:

      Women are very often hammered for clothing choices etc when a man would never be, high visibility women in politics (Hilary Clinton, Sarah Palin etc.) for example. But the mistake here is because this problem is a common one you make the assumption that this situation is the ye olde pick on women for their clothing choices problem. That is NOT the case here. She chose her clothing in a deliberate attempt to use non-verbal communication to say “I am Steve Jobs” and trade on Steve Job’s reputation for successfully developing disruptive technology. That non-verbal communication choice is highly relevant as she appears to be more of a con artist than an innovator.

      Her highly secretive excessively siloed excessively lawyered approach wasn’t to hide disruptive technology from competitors it was to hide the fact (even from her own people) that she was lying to investors and to the public!

      Blood testing technology isn’t perfect and there is considerable room for improvement but as someone in an earlier thread mentioned, she has set genuine improvement in the field back 10 years. After this debacle, who is going to fund it?

    5. march21 says:

      You may call her ‘entrepreneurial maverick”. Rest think of her as “cargo cult scientist”. And obviously she was aware of it. Otherwise she wouldn’t have chosen that board who were more experienced in blood-letting than blood-testing.

      And really casting aspersions on Gibbons nothing less than shameful.

      1. Antron Argaiv says:

        Scientist?

        All the scientists I know who are worthy of the name, have college degrees. All of them. They have worked, learned from others and understand what is and isn’t reasonable in the context of the field they work in.

        Holmes started Theranos as a 19 year old dropout. Call her an entrepreneur, but don’t call her a scientist.

        1. Anon says:

          Entrereneur?

          All the entrepreneurs I know make huge personal sacrifices and pour (their own) blood, sweat and tears into creating real value.

          More like fraudulent con artist, or hot air salesman at best.

    6. Phil says:

      ” Also, isn’t it at least possible – if not likely – that Gibbons was part of the problem? That his illness prevented him from actually getting the needed science/technology done? Starting a new company with a new technology isn’t for the weak minded nor the weak of heart.”

      This a disgusting and cowardly statement. You realize Gibbons lost his life, right? And that the evidence suggests his suicide was a direct result of the unrealistic expectations that were put upon him? What planet are you from where it’s ok to speak ill of the dead?

      You are a disgusting coward. I have no reservations about saying so because you are capable of responding to the accusation.

    7. Oliver H says:

      “Also, isn’t it at least possible – if not likely – that Gibbons was part of the problem? That his illness prevented him from actually getting the needed science/technology done? Starting a new company with a new technology isn’t for the weak minded nor the weak of heart. Of course she’s focused and has difficulty listening to others, duh.”

      So what you say is that if you jump off the Empire State Building and flap your arms real fast, the fact that you eventually impact on the street below is not because it’s simply scientifically impossible to fly using just your arms but because you were weak minded and didn’t put in proper effort?

  28. Anon says:

    All this secrecy and arrogance sounds *exactly* like Moderna:

    https://www.statnews.com/2016/09/13/moderna-therapeutics-biotech-mrna/

    Watch our for biotech’s next big implosion!

    1. Anon says:

      Moderna, Theranos and Kadmon are all mentioned in this 2014 article in xconomy:
      http://www.xconomy.com/national/2014/07/14/stealth-mode-is-the-new-sweet-spot-for-some-biotechs/
      What do they have in common?
      1) Permanent stealth mode
      2) Admirable success in raising funds
      3) At least the whiff, if not the full frontal olfactory assault, of fraud

      1. Andre says:

        Do we need to add Denali Therapeutics to this infamous list? Denali Therapeutics raised last year over with 200 million US$ for new therapies to treat neurodegenerative diseases. Interestingly enough, nobody (but the investors?) know how Denali will address this major health care problem. Denali’s home page is not really informative. Having Marc Tessier-Lavigne as a founder on board surely helped to raise the money. I am however still puzzled about how they want to make a difference to the many failed approaches of the past. Yet another stealth company?

        http://www.denalitherapeutics.com/#home

        http://www.fiercebiotech.com/special-report/denali-therapeutics

        http://www.forbes.com/sites/stevedickman/2015/05/21/why-denali-raised-a-217-million-financing-round-not-just-because-it-could/#ab7c54d2d0ab

  29. loupgarous says:

    And they’re off… the legal sweepstakes, in which investors race to pull what money they can back out of Theranos.

    This is actually the other boot falling. The New York Times reports Ms Holmes is has been forbidden to own or operate a medical laboratory for at least two years by the Centers for Medicare and Medicaid Services, and forbidden to tale Medicare and Medicaid payments. This followed on findings that Theranos lab results for warfarin blood levels were consistently off.

  30. loupgarous says:

    Bah… one more try….

    And they’re off… the legal sweepstakes, in which investors race to pull what money they can back out of Theranos.

    This is actually the other boot falling. The New York Times reported on July 8th that Ms Holmes has been forbidden to own or operate a medical laboratory for at least two years by the Centers for Medicare and Medicaid Services, and forbidden to tale Medicare and Medicaid payments. This followed findings that Theranos lab results for warfarin blood levels were consistently off.

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