In the current debacle, you again have all the classic ingredients in force: pride goeth before a fall, the extreme secrecy, the aristocracy > meritocracy, venture capitalists all wearing the VC equivalent of beer-goggles, the ignorance and laziness of tech media exposed. You even have a co-inventor who committed suicide and, for no obvious reason, Henry Kissinger is just hanging out.
The fact that Theranos aimed so high in its disruptive mission has come to bite it a bit...it's one thing to butt heads against government regulations when just making it easier for people to catch a ride or sleep on a couch. A lot different when you're allegedly subverting regulations explicitly constructed around human health.
Basically, there's popcorn for everyone.
Here was a company that popped up, literally out of nowhere, claiming to have a handle on microfluidic diagnostic assays...something that the major players in the industry haven't been able to get off the ground since ELISA came along in the 1960s.
The skeptics were quiet at first. I mean shit, they landed Walgreen's and Kroeger! It must work, right?
Now we discover a little more of the truth and it's a lot safer to say "put up or shut up".
I had to look this up -- I guess you're referring to Ian Gibbons?
>>In 2005, Ms. Holmes hired Ian Gibbons, a British biochemist who had researched systems to handle and process tiny quantities of fluids. His collaboration with other Theranos scientists produced 23 patents, according to records filed with the U.S. Patent and Trademark Office. Ms. Holmes is listed as a co-inventor on 19 of the patents.
>>The patents show how Ms. Holmes’s original idea morphed into the company’s business model. But progress was slow. Dr. Gibbons “told me nothing was working,” says his widow, Rochelle.
http://www.wsj.com/articles/theranos-has-struggled-with-bloo...
Like Theranos, the story is coming apart at the seams... I haven't seen this discussed here but UBeam is quietly raising another round via some Israeli equity crowdfunding site. Crazy!!! This after raising Series A from a16z!
Will be interesting to see how many of these unicorn type startups are around this time next year.
Imagine if a search company like Google had been founded 11 years ago, and claims to have revolutionized web search, but then a reporter exposed that they don't actually use any of their own search technology at all (!), and instead they pay to license Microsoft's search technology Bing instead (!). And a major industry regulator has claimed they're operating outside regulation (FDA in this case for Theranos). When challenged about whether their technology works, they respond with what amounts to hot air and empty claims. That's where Theranos is right now.
I was inclined to side with Theranos initially, since I've seen my own share of reporting hit-pieces where my insider knowledge made it clear the reporting was highly biased and essentially nothing but an all-out attack on the company. However, my opinion of them has been turning toward skepticism since I've seen them respond to criticism in a secretive way and by failing to substantiate their claims about their product. The cynical part of me is beginning to believe that Theranos is refusing to share real details because the data doesn't look good for them.
If Theranos has not developed any commercially viable breakthrough technology for fingertip blood draws, and will continue to operate indefinitely by conducting regular venous draws using other firms' equipment, then their investment value cannot be sustained, because that's a substantially weaker business model, and different than what was claimed. Selling fingertip testing on breakthrough technology would make them highly differentiated (unique, only ones to do it), whereas reselling other firms' venous draw technology is minimally differentiated (they'd just be a lab, same as any other).
Hacker News is a forum of entrepreneurial and hacker-minded folks, and I think we're all worried about what it means for that sector of the industry, or the tech industry as a whole, if the company turns out to have been a sham. It would not be good for Silicon Valley if Theranos turns out to be anything close to a Ponzi scheme. If in the end it's discovered that Theranos' technology does not work, that's how they may be viewed. It's an interesting story that concerns people.
Theranos has nothing to do with the tech industry. Recent concerns in the tech industry regarding valuations have to do with the viability of business models, not the viability of technology. No one's questioning whether Uber's technology is feasible - they're interested in things like the unit economics and other factors that impact long-term profitability.
> It would not be good for Silicon Valley if Theranos turns out to be anything close to a Ponzi scheme.
Ponzi schemes are a specific type of fraud involving unsustainable recursive financing. If there's any impropriety at Theranos, that would probably be (another type of) fraud.
Is Theranos holding open tryouts for their PR department or something?
Theranos is catching a lot of flak right now because they claim to be a company founded on this awesome new technology, but they seem to be use existing technologies for all the services they currently offer, they won't show people their wonder-device, and the story of the way the company was initially funded and valued keeps getting sketchier.
Is Theranos using existing technologies and still not providing value above the incumbents? This is what I really want to know. I just don't know.
Theranos, the company, has claimed to be building an amazing new testing system. They're not just about getting blood test centers set up in grocery stores, they're very specifically all about a new technology that gives consumers access to a lot of tests all at once, from a pin-prick blood sample. Not an old-style blood sample from a vein, and not this piecemeal "we mostly use the current equipment, but then we can also use our own" weirdness.
The business was "fancy new tech, disrupting health care," not "we'll take blood from your vein in a grocery store".
If you're going to try and say, well, ok, but maybe they're just pivoting to using standard equipment but now it's in a grocery store, I guess you could say that...
If Theranos is not using their fingerprick blood testing technology, then they are not using their technology commercially at all. So if this is true, then they're a company that's been in business 11 years, has a massive valuation, and has not developed a commercially viable technology yet. It's as if a web search company like Google had been around 11 years, was worth >$1 billion, and then was found to be exclusively using and rebranding Microsoft's search technology instead. It's a scandal.
Theranos' valuation cannot be sustained anywhere near its current value simply by selling blood tests conducted on equipment manufactured by other firms. Theranos' claim to fame is a breakthrough in fingertip-prick blood testing technology, and they have no way to differentiate themselves in the market without this breakthrough technology - their investment value cannot be sustained simply by reselling technology made by other firms.
A better comparison would be if Uber had claimed they had self-driving car before they'd even entered the market, had started doing rides, and then it turned out Lyft drivers were surreptitiously hidden inside the front of the car and were actually driving instead of the mystical self-driving computer.
That's how it looks at the moment with the way Theranos is behaving.
If u goto their website a lot of the media and copy is very founder-specific. Almost like they are trying to build some cult of personality around her.
Her pedigree, looks, family $$, being a Stanford dropout, blonde haircut, blue eyes, Steve Jobs drag and surfer voice (she took vocal coaching to deepen her voice to sound more like a leader) all combined as tantalizing catnip to the press. Theranos knew this and purposely stirred up a media storm focusing singularly on Holmes, NOT on the technology. Almost like it was constructed like a sleight of hand so everyone would be distracted by the cult of personality around the pretty blonde founder and ignore their lack of peer reviewed research that their testing methods actually worked.
2. In the health space, being trustworthy is kinda important.
Are they promising a product that they aren't delivering?
Sorry, I know I'm being difficult here, I would really love to chat with someone who is very invested either for or against, or both, this approach, so that I can understand better.
Seriously, if you, or you know anyone who has time to chat about this, send me an email. I don't intend to be as contrarian as I know I appear to be (and probably am being) here.
I really care, and just for purely reasons of curiosity. Anyways, ping me if we can chat.
In regards to the rest of your comment (as well as your other posts littering this thread), your not being difficult as so much as lazy :P
A quick Google search and 15 mins of reading will catch you up to speed about Theranos and all the (negative) attention they are currently receiving in the press. Start with the series of recent WSJ articles about Theranos.
Their initial value proposition was not that they would simply open blood collection sites in pharmacies or supermarkets. That could have been a serviceable proposition had it been theirs, but it wouldn't have justified their huge valuation. Their valuation is based on the idea that they would be able to do most blood tests from a drop of blood, collected from a pinprick. They have failed to accomplish this.
I hope that clears things up for you.