At Theranos, Many Strategies and Snags
wsj.com
wsj.com
>For one test, the device’s accuracy rate increased sharply after some information was deleted and manipulated, the employee wrote. Edison machines also allegedly failed daily quality-control checks often.
>Ms. Holmes forwarded the email to Mr. Balwani. He replied to the employee, who no longer works at Theranos, denied all the claims and questioned the employee’s understanding of statistics and lab science.
Oh man. If you read through Theranos' reviews on Glassdoor [1] this anecdote seems totally legitimate. Multiple reviews talk about the toxic culture and how management does anything to cover their behinds. Quite a few of these were written before the scandal broke so I think they're quite honest about what's going on.
[1] https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889_P...
Is that just a flat out lie?
Maybe not outright extortion but certainly not what they claim of being a truly independent forum.
An environment where salespeople feel they can do stuff like that is a problem, but no, it is not proof that "yelp deleted bad reviews for money"
Yelp definitely hides a lot of reviews that are completely legitimate supposedly due to their review validity system filtering them, but in a lot of cases I've seen the only crime these disenfranchised reviewers had was that they didn't want to go make a full-blown Yelp profile with pictures and everything to make really serious, very well described complaints. This artificially inflates review relevancy ratings for companies that have Yelp reviewers that skew towards younger demographics. There's a ton of stores where I live that are frequented primarily by 50+ year olds but they have almost zero Yelp presence since nobody operating or visiting the store are much into technology / social media enough to care.
There were also complaints about ridiculously high security to the point where people didn't even know their own exact job descriptions/workflows because of "competitive secrets" and that they couldn't talk to people working in other departments due to paranoia/culture of fear.
Finally there were a couple about how they interview and act like your job will be at the fancy building on Sand Hill near Stanford but really the bulk of the employees are relegated to annexed buildings far away in EPA or in Mountain View, yet they don't tell them this until their start date - during all their onsite interviews up through the offer letter it seems like they'd be working at the HQ on Sand Hill.
He added: “This is product development, this is how startups are built.” The reply ended with an edict that the “only email on this topic I want to see from you going forward is an apology that I’ll pass on to other people.”
- complaints about poor pay, minimal benefits, no options, no 401(k) matching, no wellness benefits, no gym
- not allowed to post Theranos on your linkedin profile...that's crazy goobers
- lots of acknowledgement by reviewers that many of the reviews of Theranos are fake, including a couple that say there's regular pressure to post fake positive reviews on the site. Reading the positive reviews that sound like press releases, I can believe Holmes probably wrote them herself.
- long work hours, minimal work from home, regular weekend work
- incredibly high turn-over rate (no surprise)
- complaints about lack of domain knowledge up through the management chain, from product development to medicine
- very heavy involvement by the COO in everyday employee's work, complaints about the COO's temper and lack of domain knowledge (he, Ramesh "Sunny" Balwani appears to be Stanford CS dropout who went on to get an undergrad and MBA elsewhere)
- descriptions of the assay preparation not being particularly unique...which feeds my previous notion that they're main innovation is subsidizing blood tests with VC money to drive the price down
- employees with experience in the regulatory environment are ignored
- no protocol "if you stick yourself with a needle" (written by a current Phlebotomist)
Also, can this be our last Theranos thread before the company officially implodes? I get no small amount of freude out of this schade, but it's becoming the new bitcoin in terms of endlessly rehashed HN topics.
(I'm sharing this here because the Hacker News community seemed to enjoy my Season 3 premiere of Silicon Valley [https://news.ycombinator.com/item?id=10179894], but apologies if others feel it detracts from the discussion.)
I can imagine an entire episode dedicated to trying to get Pricks onto Product Hunt. The double entendre's and puns write themselves.
Seasons 1-3, which aired during the Bush era, showed the lives of incompetent and corrupt property developers + military contractors.
Now the main running gag is a BS non-existent app.
I'm thinking JLaw for Holmes. Like a Joy that doesn't suck and ends on a different note.
> Blake "Blade" Ross has been working in tech since he began programming for Netscape at 14. When he was 17, he left Netscape to start the Firefox web browser with some colleagues. After Firefox, Blake attended Stanford for a year and then went on leave to build a new company. In 2007, Facebook purchased that company as its first ever acquisition. Blake spent 6 years as a Director of Product at Facebook. He has been featured a number of times for his work in tech, including on the cover of Wired and Spectrum magazines, and in the 2013 Forbes 30 under 30 list.
Like Holmes, Ross also ditched Stanford after a year to start a company :)
Science speaks for itself and does not care how much you raised at what valuation. It requires a rigorous approach to testings and facts and data or it will be merciless if you aren't living up to your own claims.
So hopefully next time someone has a great disruptive idea in healthcare, they will spend a little more time getting the science and tech right before they start worrying about becoming a unicorn.
Will we be saying the same things about Palantir? Maybe, maybe not. There's not that much difference between Palantir and Theranos. What has Palantir got that others don't? Answer: The ability to raise money at incredible valuations. Both are living off a mythologized ("PayPal has great fraud detection" and "you don't need an incompetent phlebotomist poking holes in your arm") advantage. We'll see if they can turn all that money into a real advantage.
But you can't count on science to spank these people.
EDIT: to clarify, I'm not the source of downvotes. Before the recent media explosion I believed exactly as you did.
To ignore this is hubris.
Fake it 'till you make it is often an important part of success.
The science of Dan Shchetman, J. Robin Warren, Barbara McClintock and many others spoke for itself, and for a long time "science" essentially didn't listen. I put "science" in quotes because "science" doesn't speak or listen - scientists do - and the scientists shunned those luminaries (eventually to recognize them with one of the highest honours - the Nobel Prize).
Warren had to use himself as a test subject for others to notice. Shechtman was a cast out for years (and then it turned out that he wasn't the first to notice 5-fold symmetry - he was just the only one for a long time to insist it's real; the other "scientists" who noticed it cared too much about their status, rather than the science). McClintock was shunned by her peers and essentially lost her job -- though evidence for how badly she was treated by "science" for her radical ideas (now mainstream and assumed true) is being whitewashed.
I keep wondering how much progress we have lost because "scientists" (unlike "science") does care how much you've raised, how much you've published, and who your friends are.
> anyone wanting to actually change the world in healthcare ... Science speaks for itself
The belief that modern healthcare is nothing but the application of science is also romantic and misguided. In the US, healthcare is a business and not even a free-market one. It is informed by science, most definitely. But e.g. no doctor will recommend the single most effective treatment for type 2 diabetes early in the disease[0] (calorie restriction whether directly, by direct fasting or intermittent fasting). In fact, it turns out that the American Diabetic Association recommendations are the everything but science, and possibly the worst you could do.
[0] - http://www.theguardian.com/lifeandstyle/2013/may/12/type-2-d..., see http://www.ncl.ac.uk/magres/research/diabetes/reversal.htm for references
However, the issue with Theranos is the opposite: it is getting recognized, even though we don't know whether it's good science or not, because there isn't any visibility into what they do and how they do it. The scientists you mention all published their work for the world to see; they didn't hide behind "trade secrets".
> The belief that modern healthcare is nothing but the application of science is also romantic and misguided.
I agree with this too; but again I don't see how it applies to Theranos, because they are explicitly claming that what they are doing is science. So they should be judged by scientific standards, even if the rest of the health care industry can't live up to those standards.
Rigorous science is not sufficient (e.g. the Shechtmans/Warrens that we don't know about -- it is pure hubris to believe that all those were eventually vindicated), nor is it required (e.g. Vioxx, Thalidomide, ADA recommendations, baby peanut allergy recommendation, dietary cholesterol recommendation, dietary sodium recommendation).
If Theranos is a lesson to entrepreneurial scientists it is probably: "Don't waste your time failing quietly and cheaply, when you can fail extravagantly and retire rich"
Their product is scientific. It's not just a health app or some nutriment recommendation which can be claimed successful without any scientific claims to back it.
Theranos has a very a scientific product with a binary output and so it's claims will stand up to that (i.e. being approved by passing a number of tests)
My lesson was for those who wanted to change the world via healthcare, not those who wanted to get rich.
So was VioXX[0]. Read the Withdrawal section, especially the last paragraph. As someone who was following the case closely while it was happening, I can tell you that everyone involved looked guilty as hell, even though the court found only the marketing people "overzealous".
You see, "science" doesn't lie. But scientists do. Some liars are better than others, though.
Also, the standard US medical advice about things like nuts that might cause allergy are "delay introduction as much as possible" (e.g., do not introduce peanuts before age 3 or so, for fear of allergic reaction). You will hear this from doctors and find this in official manuals, although there is no science to support this (never was), and in fact, there's data indicating that early exposure to nuts reduces allergy.
> Theranos has a very a scientific product with a binary output and so it's claims will stand up to that (i.e. being approved by passing a number of tests)
Output is not binary. Most (often all) data used to evaluate medical products is provided exclusively by manufacturer, who is able to massage data to yield specific desired results, see e.g. VioXX.
> My lesson was for those who wanted to change the world via healthcare, not those who wanted to get rich.
Well then, they shouldn't look to Theranos - those guys obviously care more about getting rich than about changing the world (well, changing the world for the global good, anyway).
> no doctor will recommend the single most effective treatment for type 2 diabetes early in the disease
How do you know this is true? Dietary counselling is recommended as part of the treatment of newly-diagnosed T2DM, per UpToDate[1], a reference for this kind of thing.
> American Diabetic Association recommendations are the everything but science, and possibly the worst you could do.
I'm not sure what you mean here. What are the guidelines and how are they deleterious?
1. http://www.uptodate.com/contents/nutritional-considerations-...
I might have been misunderstood. I am not defending Theranos or claiming they deserve any accolade or even sympathy. I am just pointing out that the romantic view that "science triumphs" is not, historically, supported by evidence on time scales shorter than a few decades. As most people's careers -- scientists included -- are on that time scale, it is a bad idea to assume that "science triumph" for any specific person or company.
> How do you know this is true?
I've been following these issues for a while. To borrow Gary Taub's analogy - the guides ("eat this much or that much, mostly carbs, low fat, moderate protein") are similar to an advice about how to make a nightclub popular: "get more people in". Yes, if you manage to do that consistently and with sustainable effort, then everything will be fine - yet the compliance rates are ridiculously low (as your link points out). But now we have the people, rather than doctors, to blame for non-compliant behavior, so the ADA and medical institution is not to blame.
However, there are studies (no time to look for refs right now, sorry), showing that people on low-carb, high-fat, medium protein (i.e. "keto" style) have a much, much higher compliance rate, and much better outcomes (in term of controlling blood sugar and reversing type 2) -- yet the recommended ADA (IIRC, can't find it right now) is 60% carb, 30% protein, 10% fat. That's high fat, mind you - not high protein.
I'm really curious what the rationale for this board composition is. [Edit: I'm curious if this is connected to Holmes' father's experience in the foreign policy establishment]
> Holmes served in the U.S. Army, Second Lieutenant, Civil Affairs, receiving the U.S. Army Soldier’s Medal for Heroism.
Want to guess who he really works for?
Physicians groups, insurance companies and biomedical ethics groups aren't really hip to this idea because patient self-testing bloodwork may open pandoras box to a lot of unnecessary expenses, especially if the patient is trying to bill this through their insurance. False positives can and do happen, and they lead to unwarranted appointments, specialist visits, exploratory surgeries, etc. Other reasons physician groups are opposed to it is because they view it as profiting off people who are hypochondriacs, and a huge amount of the customers would probably be drug abusers and steroid users. Most likely, people who would go and do their own blood work are the system's "super ultilizers" and they are the ones who are already costing the insurance companies and the states $3-4 million per patient per year in healthcare expenses. It's not uncommon to have a fibro/rheumatoid arthritis/hypochondriac patient who bills $10 million per year. If these people go to the ER and cost 3k per visit every time they can't fall asleep and have anxiety (~12x per month), imagine how often they might want to go and run their own bloodwork.
Not being able to order our own labs as patients is the reason there are moral objections to for-profit hospitals selling "full body scans" and dermatologists doing unwarranted full body mole checks. Generally the proper guidelines is to only administer testing when you suspect that something is wrong.
Yes, and this concern is justified. If I have to pay for your lab tests, I'm not going to let you just decide to run whatever tests you want. That would be foolish.
The solution to this is to allow people to order their own tests if they pay for them themselves. A company like Theranos could then profit by making tests cheap enough for ordinary people to afford them, which would bring much-needed competition to the health care testing industry. But first they need to be able to show everyone, by ironclad evidence, that their tests are reliable.
I'm working with a guy right now who has a blood clotting disease and his meds alone are $800k yr before all the inpatient stays and procedures.
Generally once the patient starts spending and hits certain level of cost they get assigned a case manager through their insurance to 1. see if they're getting proper treatment 2. try to streamline them to the correct care first (rule out needless and repeat visits) 3. make sure all procedures and drugs are medically necessary. The people that go beyond these case managers sometimes go to a different organization for medical management.
Some states are getting even more strict, in Alaska right now if you have Medicaid and go to the doctor too much for what they view as needless visits you actually get cut off from ALL providers and then can only see certain approved providers for certain approved types of visits, can only get prescribed specific drugs and you have to "graduate" from that program after a year in order to get out of it by keeping ER visits to less than 1 every 6 months. I'll try and find you a link with more info about that program but they're trying to keep it on the dl because obviously all the patients who get put on that program are pretty outraged & they don't want the bad press about it, the perception of denying care etc.
Also everyone in the AK medicaid who is on opiates has to abide by a "pain contract" including random drug testing and med count checks and if they screw up too many times they will get banned from certain doctors/facilities, put on a stricter program (like the above) and can get kicked off Medicaid. Unfortunately this just leads to more homeless heroin addicts, so I can't really say that program has been a success.
Edit: link http://www.adn.com/article/20140703/state-aims-curb-overuse-...
- make bold claims
- avoid going into details ("trade secrets", sheesh)
- make investors believe in your "vision"
- give talks about successful entrepreneurship to polish one's image
And still nothing reliably demonstrated.
What amazes me the most is how clueless investors are. If they don't care about Science, what do they care about when it comes to providing new Healthcare solutions? What's next, a new take on homeopathy ?
Not too far off, actually:
http://blogs.sciencemag.org/pipeline/archives/2015/12/04/and...
> A few billion years of blind evolutionary tinkering gives you a mass of insane, irrational, tangled interwoven systems with no documentation in sight. Crazy new things keep getting uncovered all the time (siRNA! Who knew!), and the number and scope of the crucial things we have no clue about is just another one of the things that we have no clue about. If your worldview has been formed by using human tools to make human-designed applications for humans, you are in for quite a shock.
Traditionally the level of fundamental research and development displayed by Theranos - in areas of health or national defence - are done for years behind closed doors and then slowly rolled out to the public to mitigate any questioning of the underlying tech since the standards are understandably higher (i.e - it has to work from the start). This stands in contrast to the "move fast, break things" attitude pervasive in start-up culture.
I don't think there's anything necessarily fraudulent about Theranos, from what I've read, which seems to be the not-so-subtle undercurrent in much of the commentary. Rather they flipped the model startups should use in health, which is establish a business model that works and then work on preparatory tech in the background until it's ready to be rolled out. This seems to be largely what Theranos has done, but not what it's purposely chosen to articulate to the public and investors as it surely would have garnered less attention/funding. At this point Theranos seems to be playing the waiting game; waiting for their technology to reach a point where they can make a more transparent case for their business model and change the narrative once they've reached a point that's more aligned with the aspirations that have been articulated by Holmes for the past decade.
Once again, Peter Thiel's approach with Palantir looks to be extremely well executed and one that perhaps Theranos should have emulated.
What I said they should have done is described to their investors the business model that would act as a stop gap measure (gain market share and revenues by using existing technology) while allowing them to develop their proprietary technology to a point where it can get regulatory approval and can replace the already existing tech they're currently using.
> Leading investors to believe that you have technology that will be ready in 2011 when in reality you expect it to be ready in 2016 is not flipping a start up business model... It's just lying to get investor money
I've not seen any indication that rounds were predicated on certain delivery dates of the tech (what tech? what is the "success" percent? can the tech be augmented with more traditional tools?). If terms did get that specific, then there would be grounds for potential fraud.
Certainly you can argue more broadly that Theranos statements to the public over the past decade go beyond being disingenuous about their implementation of difficult technology and enter into fraudulent territory.
Theranos exists in a regulated industry where at a minimum as a lab developed test you have to abide by CLIA regulations. In addition you have to have validation, verification, design history and a whole bunch of documentation to prove that what you developed does what it should do and actually works.
The thing about Theranos is that the rules are well established.. You just have to follow them. If you don't know the rules you have to be a quick study or you have to hire experienced folks who know the rules and how to guide you through the process.
Honest question, can you claim to be a Computer Scientist if you drop out from a computer Science program ? To me it sounds like calling yourself a Doctor after dropping out following the first year of Medicine Studies.
Needless to say, this smells of arrogance more than anything else.
Yes, absolutely. Plenty of luminaries in computer science don't have actual CS degrees.
> Quality-control failures were due to the “newness of some of our processes, which we are improving every day,” Mr. Balwani wrote.
> He added: “This is product development, this is how startups are built.” The reply ended with an edict that the “only email on this topic I want to see from you going forward is an apology that I’ll pass on to other people.”
I would rather question Balwani's understanding of Lab Science and Statistics as someone who has never had a remote experience of lab science in the first place. And about his understanding of Statistics, I have no idea where he thinks he has any authority either. MBAs are not particularly known to be very good at grasping probabilities.
Example from the video, paraphrased:
Mod: "What prick tests are you able to do, using no commercially available lab equipment?"
Holmes: "[lots of waffling] We're currently only doing the Herpes test. [proceeds to not answer the question]"
Mod: [accepts the non-answer and moves on]
This kind of reporting is entirely useless, unless it's some kind of attempt to subtly out Theranos for being dishonest.
The interview is still effective in that hard-headed people watching the interview who need concrete answers and actual information will still draw their own (likely negative) conclusions.
I'm sure the major newspapers are all preparing full investigative pieces, but those take time. In the meantime we'll get articles full of circumstantial evidence and insinuations.
Investors can you please get better at realizing that sometimes experience and know-how can help?
I can certainly say I don't like what they're doing, but I'm not sure I can say that they won't make money on this.
> Bond and Richards-Kortum found that averaging the results of the droplet tests could produce results that were on par with venous blood tests, but tests on six to nine drops blood were needed to achieve consistent results.
This was always the main criticism of Theranos. Finger-stick blood tests have never been considered reliable for clinical diagnostic tests because you don't get enough blood and the blood you do get can be contaminated.
I suppose if the author didn't talk about Holmes' history, though, they wouldn't have half the damn article. Certainly nothing interesting to talk about with that company by itself, were it not for the headline grabbing founder.
That said if I read about how this "inspiring" person dropped out of Stanford when she were only 19 one more time I might lose my mind.
The big sin that you mustn't commit, and that many do anyway, is to trust a private company's data where a potential conflict of interest like this exists. Run your own trials.
They probably always were, just now I am noticing.