The letter the Feds sent to Theranos [pdf]
cdn2.vox-cdn.com
cdn2.vox-cdn.com
The first two laws they are cited as having broken are about quality control standards. The next two laws they are cited as having broken are about qualifications that must be held by the laboratory director and technical supervisor. The last law they are cited as having broken is about qualifications that must be held by technicians. They have ten days to come into compliance, but in order to address these violations they will have to either hire new staff for key leadership and other positions, or pull their product from the market. They will do the latter.
This same company was previously forced to pull their "nanotainer" testing system from the market because when regulators sent them control samples, they fraudulently tested them on different equipment and with different procedures than they used with patient samples. I will be surprised if no criminal charges are brought against Theranos CEO Elizabeth Holmes.
The letter says that Theranos must provide "acceptable evidence of correction documenting that the immediate jeopardy has been removed". "Has been" is past tense, so Theranos really is required to fix the problems (at least the most serious ones) in ten days, not just plan to fix them.
What are some examples of COP violations leading to jail time?
Regulation - How the Agency turns its mandate, which is often broadly stated and sometimes nebulous, into concrete actions and policies. An example - I worked at the DOJ as an intern. There was a law passed to provide benefits to the families of public safety officers who died in the line of duty. What those benefits are? Who qualifies as a public safety officer? If a fire fighter gets in a car crash on his was home from a shift, does that qualify? The answers to these questions are determined by lawyers and experts in equal measure - the experts to determine what should be done to solve the problem, the lawyers to make sure the agency actually has the power to enact the policies the experts recommend. To put it in OOP terms, regulations are instances of law.
The stuff you mentioned - who is allowed to sign form 22a, minimum size of cleaning closets - is still law. The agencies also have the power to determine penalties for breaking regulations, not all of which involve going to jail. This power is again derived from what powers Congress assigns them when it writes the law.
There are providers who don't bill Medicare, don't undergo CMS surveys, and don't follow the COPs. You guys are going overboard in calling it "the law."
http://www.beckershospitalreview.com/quality/cms-fines-cleve...
Whether or not regulations are technically "laws" is beside the point, and arguing about it so much is pedantic. The feds show up with a gun and have full authority to fine you or even padlock your lab (which has happened plenty of times). Theranos is in plenty of legal (or regulatory, who cares) hot water right now, whatever you call it.
So, this is a pretty heated debate :)
As someone kinda correctly identified, here is what happens:
Agencies are either directed by congress to make certain regulations, or more broadly delegated rulemaking authority.
They exercise that rulemaking authority through an administrative rulemaking and publishing process that ends up with stuff in the CFR.
This part is simple. You can find a parallel table GPO/etc conveniently publishes, of which USC code gave rulemaking authority for which CFR parts here: https://www.gpo.gov/help/parallel_table.pdf
I honestly feel bad for the person who has to keep that up to date.
Now, the larger question that was asked - can you be sentenced to jail for violating a CFR. The answer is "yes". You will likely be charged with some USC violation, whose regulations/etc are interpreted through some CFR regulations.
a good example of a law that has criminal penalties and CFR regulations is HIPAA. See the aptly titled "who goes to jail" - http://www.ehcca.com/presentations/HIPAA3/malone_2.pdf
Notice the regulations are in the CFR, violations of them are explicitly punishable under USC (IE "knowingly and in violation of the regulation ...."). With criminal penalties.
Now, this is not the same as the related question of "can you be sentenced to jail by the FCC for violating the CFR. The answer to this is "well, maybe".
The courts these agencies set up, and their administrative law judges, tribunals, whatever, are generally known as article I courts.
The current state of the law on article I courts is kind of a mess. In general, they have some power, but if it involves deprivation of life liberty or property, it must at a minimum meet various requirements (including being reviewable by a standard article III court).
Honestly, this is a super-complex and super-esoteric topic to get into on hacker news.
So yeah, you should worry about the CFR, but you maybe shouldn't worry the FCC will throw you in jail. It'll be federal prosecutors instead :)
"Rustom Ali, Ph.D. appealed a January 13, 2005 decision by Administrative Law Judge (ALJ) Keith W. Sickendick. Sonali Diagnostic Laboratory, DAB CR1267 (ALJ Decision). The ALJ Decision upheld the actions by the Centers for Medicare & Medicaid Services (CMS) revoking the certificate issued to Dr. Ali's laboratory under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), and imposing a civil money penalty of $10,000 per day for the period August 4-6, 2001. The appealed actions were based on a review by the Arizona Department of Health (the State agency) finding deficiencies at Sonali Diagnostic Laboratory (Sonali) that posed immediate jeopardy to patient health and safety."
http://www.hhs.gov/dab/decisions/dab2008.htm
"Based on the foregoing discussion, we affirm and adopt the ALJ's Findings of Fact and Conclusions of Law and affirm the ALJ's decision to uphold CMS's revocation of Sonali's CLIA certificate and imposition a $30,000 CMP. By operation of 42 U.S.C.§ 263a(i)(3), Dr. Ali is subject to the two-year prohibition on owning or operating a CLIA-certified laboratory."
http://centerfordigitalhealthinnovation.org/
I'm a machine learning engineer working with UCSF cardiology. I certainly don't know all the answers, but I'm happy to try to answer questions or direct people to the right place.
Working in medicine is hard, working with biology is hard, not just because of regulatory hurdles, but because fundamentally the problems in those fields are much more commonly questions of basic science than engineering.
Good science leads to good companies, and if you can't do good science you're probably going to fail in this space. Good to see solid research institutions creating spaces to nurture good science at startups.
Haven't followed the story but that is stock snake oil marketing boilerplate. If they really were/are saying that, no surprise that they were shown to be frauds.
I don't much care if they want to hide some aspects of how their process works, but under no circumstances should anyone in this space operate without conclusively, publicly and openly proving that the technology works. The standard for that is scientific publication, and the ability of disinterested parties to test the equipment and verify it does what it claims to do.
Plenty of medical/biotech/diagnostics companies have cleared that bar while maintaining trade secrets. Theranos should be submitted to the same standards, and as far as I can tell, whenever they have been tested, they have failed.
Theranos to date has raised $88.4M. The Series C was raised in 2010 following a 4-year hiatus.
In the ten years since the founding of Theranos, they were unable to hire anyone who would help them figure all this shit out?
It seems insane to me that a well respected venture firm like DFJ, who invested in their Series A,B and C, would not have done their due diligence and understood where Theranos would become vulnerable. Everyone knew that government regulators would be involved since day one.
I am bullish on Elizabeth. She is obviously extremely intelligent and charismatic but I'm bearish on her investors. Step one of funding should have been building a blood test that actually works and step two is getting that $88M test approved.
Without knowing the whole story it's hard to form an opinion about the situation but I am super interested in the psychology of how all "this" happened.
Thoughts?
She's childhood best friends with Tim Draper's daughter.[0]
It really is that simple. If you saw a state construction contract going to a firm controlled by a friend of the Chinese Premiere's daughter you wouldn't be confused at all right? So why should anyone be confused now?
[0] http://www.mercurynews.com/michelle-quinn/ci_26147649/quinn-...
> Clinkle had a polished demo that came before things like Apple Pay, said one former employee, who declined to be named. But most importantly that person added, Duplan “was charismatic when he wanted to be” and could “raise money in absurd abundance.”
You really want to change the world? Forget being a programmer, learn to be be charismatic.
These founders are as privileged as Bill Gates but totally lacking his work ethic and sincere passion. They're pedigreed out the ass, so those involved (including themselves) think they're actually good. In fact they just seem like they should be.
So the VCs keep pumping more and more money into them, knowing that at least people won't blame them so much when they fail, given how elite the founders are. It's easier to keep funding them than to admit you were fooled. That's the mystery behind why they burn through such huge quantities of money.
I would say that Apple, Google, EBay, Uber, Android, and Twitter have, but Steve Wozniak, Larry Page, Pierre Omidyar, Garrett Camp, Andy Rubin, and Evan Williams are far from charismatic.
This is more an example of "You can fool some of the people all the time or all of the people some of the time, but you can't fool all the people all the time." Charisma can help fool a critical mass of people early on, but once you try to expand to a product all the people use all the time, you'll fall flat on your face. Build something useful and then you don't have to fool anyone.
Stepped on by the quite charismatic Steve Jobs
> Evan Williams
Stepped on by the quite charismatic Jack Dorsey
in case anyone is interested in doing just that, http://www.amazon.com/The-Charisma-Myth-Personal-Magnetism/d...
http://ecorner.stanford.edu/videos/3005/Build-Your-Personal-...
http://fortune.com/2015/10/28/theranos-is-seeking-to-raise-2...
IIRC, the $88.4M figure comes from their publicly disclosed funding as at end 2010.
This isn't the same thing at all.
Also, How do you know they work? They got slapped for giving people risks of disease using genetic data over the internet -- a method which was not peer-reviewed or shown to be accurate and precise. That is not bullshit - that is effective regulation.
The saddest thing is - even if you are right, all the FDA asked 23&Me to do was file a premarketing authorization -- something that many tiny companies do all the time to buy time to generate solid evidence.
I can't say Theranos's comments about the matter even begin to assuage the concerns this brings. Trying to pass off the immediate jeopardy fault in hematology (i.e. blood testing) as "not apply[ing] to the whole lab" is absurd. It's like a restaurant saying that the board of health complaint that shut them down focused too much on the rat feces in the kitchen, and not enough on the well watered house plants in the dining room. It's so tone deaf.
To be fair, that has been Theranos' response to ALL criticism for the past 7 months. "Everyone is begging us for our secret recipes, but that is company secrets/proprietary science!"
For the record, I'm pretty sure Theranos is up to something very shady. Spend a couple hours watching just interviews with Holmes and reading the glassdoor reviews by current and former employees and you'll quickly start to piece together some pretty sketchy stuff.
Their glassdoor profile is full of some of the most obviously fake reviews I've ever seen, I wouldn't at all be surprised if about half of them were written by Holmes herself instead of running the company.
https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h...
Here's what I wrote on this about a month ago. https://news.ycombinator.com/item?id=10765996
I've since spent some time looking into the company and asking some people I know in the industry about the company and the opinion seems to run from "scam" to "gross ineptitude".
Holmes' answers to simple questions are about as mealy mouthed as I've ever heard outside of Congress. e.g. https://www.youtube.com/watch?v=MBs-oj7U-bo
Something smells really bad about Theranos and it's probably going to ruin a lot of people's careers while a select few are going to walk away with a nice percentage of the VC money in the end. The story on this will probably get caught up in post-Theranos litigation for many many years and I'll probably be retired long before the whole story is known.
The real problem is trying to ascertain motive. Money seems too easy for Holmes to have been working at it for so long. But it could be that simple.
And after a decade in stealth mode, why did she make things public in 2013, before the technology was working? If she's as much of an attention-seeker as some say, how did she survive for the first decade without anyone caring?
In my more charitable moments thinking about what they're up to the best I can come up with is "AirBnB/Uber". Just ignore the law and hope it goes away long enough to make money.
But both of those companies actually offer a working and viable service/product while Theranos doesn't seem to be even at that MVP point yet so that doesn't really even make sense either. At this point they're just taking VC money and lighting it on fire.
But slaps forehead the Mandarin is for the money.... Duh
Deleted comment
Here is an example of the regs that they are violating. It's things like lack of lab personnel certification. https://www.gpo.gov/fdsys/pkg/CFR-2011-title42-vol5/pdf/CFR-...
This is definitely not a good thing for Theranos, but it isn't them being called out for bogus biotech. (Not that that would surprise me immensely if it happened.)
https://www.gpo.gov/fdsys/pkg/CFR-2011-title42-vol5/pdf/CFR-...
These are horribly oppressive, bureaucratic, unnecessary requirements like "maintain basic scientific controls":
https://www.law.cornell.edu/cfr/text/42/493.1256
This also is a section, it's worth nothing, that consists mainly of references to lots of other, more specific, requirements. There's really no way of knowing what the violations are, other than to take the letter at its word that the violations are serious.
This isn't taxi medallions -- mess this basic stuff up, and you're putting people's lives directly at risk.
A company like Theranos selling blood tests without properly certified staff is the equivalent of Genentech or Pfizer marketing and selling snake oil disguised as cancer medication. It's the equivalent of selling something without having ever tested it to begin with.
This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company. Ramen-profitable is good in the short term, but time becomes increasingly valuable as a company grows.
Uh, no. It's so that the founders won't sell the company at a mere 4-5x rather than then 20-100x that the VC's want.
If it was genuinely about the company, they'd let all the initial people take some stock off the table. Instead they only allow the people who could sell the company to take stock off the table.
Big difference.
[1] which I'm not accusing Holmes of, but it's not out of the question, either.
Of course, yes, there could also be all sorts of crazy sketchy voodoo. Ya never know.
http://arstechnica.com/science/2015/11/new-study-spills-doub...
https://twitter.com/joshelman/status/655033793414238208
https://twitter.com/williamalden/status/658705178523258880
http://techcrunch.com/2015/11/21/in-defense-of-theranos/ (Thanks to Analemma_ above for reminding me of this)
The Theranos saga is incidentally one of the reasons I wrote the "You Can't Criticize Startups" rant on Monday. (to be fair, ignoring federal regulations is a different scope than mere criticism.)
Biotech investment is based on trust that the scientists are telling the truth. A bad actor in this area can really poison the environment for all other biotech startups - if you can’t trust the scientists then you have nothing.
Or maybe a good VC firm that also has some huge hits would just explain that they're just swinging for the fences, so sometimes they'll have a spectacular miss or two.
Honestly, I can't wait for a few unicorns to fizzle. But only because maybe then the whole "unicorn" meme will finally fade away.
The chinese milk crisis is an extreme example of what could be done. The executives were executed or imprisoned, which again could be extreme, but I doubt anyone in china would ever try it again. http://news.bbc.co.uk/2/hi/asia-pacific/8375638.stm
Correcting the problem tends to be easy, but measuring and reporting back your progress creates administrative expense. An example is paying for someone to train your employees on something related to the deficiency and then doing a random audit of their records at regular intervals for a few months afterwards.
Technically you can get shut down, but it isn't common.
Does anyone know what they are being ask to fix?
What is interesting to me is that this is CMS, not the FDA. CMS runs Medicare and Medicaid and is basically saying that if they don't improve their compliance, CMS will stop paying for their lab tests.
See here for a clear breakdown of responsibility among government agencies: http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidanc...
The Laboratory Director and Technical Consultant citations are standard when you have an Immediate Hazard citation. But they also reveal how poorly organized this lab is and how whomever is responsible for the laboratory leadership at a directorship level knows NOTHING about CMS laboratory regulations, or tried to pull a fast one on CMS/CLIA by hiring a patently unqualified Dermatologist to be a part-time director of a CLIA high-complexity lab. This is a MASSIVE glaring error in leadership and quality assurance at the very highest level. The executive leadership of this company appears to know nothing about the business they seek to upend. I am sure the Cleveland Clinic is wondering WTH they got themselves involved with. Also very telling that Holmes was at Cleveland Clinic the day after this letter was released.
They are clearly operating as a bog-standard lab doing conventional testing to be able to report patient results and be a traditional CLIA-certified lab (except may be one test they have - the HSV) This significant fact seems to have escaped everyone. They can't report any tests performed by their top-secret technology because it ain't FDA approved.
For a conventional refererence lab like Quest or Labcore, their inspection faults would be embarrasing but fixable. For Theranos, it's likely fixable but the PR fiasco may be ultimately fatal.
Someone shoukd really have studied the industry they seek to upturn and worked with real professionals rather than pusing global dominance and glossy PR. The cart is miles ahead of the horse at Theranos
edit: I should clarify, I mean general regulatory issues, I'm not commenting on the specifics, but every company faces audits and inspections.
Real science is too messy to be able to compete with a press release from a sufficiently motivated huckster -- and investors love a huckster in lab coat.
Don't worry. Theranos failed even some of the simplest tests so how is that going to raise the bar at all? Work safety should not be a casual business gesture. It is as if you expect you raise money and you don't provide some insurance for your startup hires. No way. Anyone doing laboratory work should be careful with regulations. Wearing goggles and no smoking in the lab should be really basic. I don't expect anyone following the whole manual, but common sense yes. Simple tests, yes. Standard procedures should still be practiced.
https://twitter.com/williamalden/status/658705178523258880
Plenty of investors were straight up reaching for the conspiracy theory handbook. They did outright accuse the media of a smear campaign and suggested it was some greater corrupt conspiracy.
Silicon Valley has a very hard time accepting the possibility (nay, certainty) that there are some bad actors in our midst (even well-meaning bad actors). A very large portion of the scene seem to respond to accusation of malfeasance with hostility.
A certain amount of skepticism against claims of malfeasance, sure, but in Theranos' case there were a lot of comments not unlike Dave Morin's.
Theranos is done, for all intents and purposes: no proven new technology and nothing interesting at all on the business execution side. Just pure founder ambition and aggressive PR/marketing. Not enough to string things along too much.
You're aware that you're accusing the editors and reporters at the WSJ with a massive violation of professional ethics right? Is that your intent?
Therano's problems neither indicate a "startup bubble" exists nor would it pop it if there was a bubble. The bay area economy is larger than the economies many countries and one company that doesn't yet have significant revenues doesn't have make much of an impact. Theranos isn't the Bear Sterns of San Francisco. The problem many troubled unicorns face is that they guaranteed results to get high valuations in their late stage investor financing. Their problems are exactly that, just their problems.
I think most people had already concluded that the company, if not outright fraudulent, was being very careful to hide a number of negative facts about their product's deficiencies. At this point nearly every scientist I know thinks their tech doesn't really work as well as they claimed, so it seems unlikely the company should have the valuation it does.
I see the part below that makes it sound like just a plan has to be filed, but I interpreted the text above as meaning they needed to comply within 10 days to even file the form. My interpretation may be wrong.
The remaining sections cited are requirements on the staff operating the lab. The letter infers that the staff do not conform to regulatory requirements. Again, this is not surprising given that the function of the enterprise is to remove humans from the process.
I find the outrage a bit outrageous.
I will note that I placed a caveat that I didn't know the magnitude of the violations, but be aware, this is an extremely serious problem for Theranos, they have no excuses, they would have known what to do ahead of time, and they certainly wouldn't use the reasoning that their lab is partially automated so they don't need to comply with manual procedure requirements.
1) There are a lot of bad labs out there like Theranos, and Theranos' story is thus only unique because of how pumped up it got. Clinical labs are "old economy" businesses, and the idea that someone could sprinkle "new economy" fairy dust and turn it into an Uber or Netflix success story is more about the echo chamber that is Silicon Valley, the general lack of scientific interest or rigor in clinical diagnostics in the tech industry, a somewhat Aspergey yet charismatic CEO, black turtlenecks, and friendship with important ex-government officials and VC folks than anything special about what was going on in their laboratory. Plenty of labs have been caught and shut down for what Theranos has done, and while I didn't think that it was actually occurring there, I am not terribly surprised.
2) The magic of their Edison box, even if it had turned out to work, was not nearly as impressive if you know anything about how clinical labs operate today. The claims that they have made (can do tests on MICROLITERS and have imprecision LESS THAN 5-10%!) are actually standard these days for many assays. As a lab director, I was always disturbed by the lay press puff pieces that said things about Theranos that were totally uninteresting and unimpressive to anyone knowledgeable...what clearly happened was that no one at Forbes, etc.. actually asked anyone who works in a clinical lab to comment. The commentary always focused more on the phenomenon of Theranos, rather than the substance...probably because the substance was super boring.
3) What has consistently been missed, and is still missed today, is that even if Theranos' technology worked and their labs weren't being run with a criminal disregard for standard laboratory practice, is that Theranos' business objectives would STILL be a horrible idea. Their push to democratize health information, to do more testing early to prevent disease rather than detect late, to test for lots of things in healthy people to increase "wellness", etc... is all total bullshit. With few exceptions, lab tests are for sick people, and testing healthy people with lots of tests simply consumes money and generates false positive results that are expensive to work up. Also, there are NO TESTS for all of the conditions (cancers, etc...) that they claim to be helping you detect early. Getting your sodium and potassium levels weekly won't help you avoid kidney disease, cancer, or diabetes, but it will make your pocketbook shrink and it will give you some falsely abnormal values 1 in 20 times you do it. This has been the true play of Theranos, which is to do a massive amount of testing on well people, marketed directly to healthly people without the advice of doctors, with the intent of arming a bunch of worried well people with an avalanche of insignificant noisy information to present to their physicians. This helps no one other than Theranos.
I have often seen a lot of objections to (3) from people on HN, especially tech-sorts who think that they are better able to handle data than the average person. However, this is fundamentally flawed. For those who are interested in Bayesian analyses, consider the utility of any test when the pre-test probability is low - the answer is that positive results are almost always false positives, or at least difficult to interpret. The answer is not getting more tests, even if it's cheap. Lab tests these days ARE cheap...it's the clinical followup that is expensive.
I will be very interested to see how this all plays out now. The big players, Labcorp and Quest, have both tried the direct-to-consumer/in-drugstore model for testing, and amusingly actually shut their offerings down years ago because of lack of interest. The truth of the matter is that making health information more available to people sounds great, but really, the only people who end up collecting that information are affluent, worried-well people who should be discouraged from testing in the first place. The people who need more routine testing are poor, socially-underserved and neglected people with chronic illnesses, but I do not think that Theranos is planning on opening test facilities in Flint, Michigan to give Hemoglobin A1c monitoring tests for free to the elderly impoverished people there. To the contrary, they've tried to open in areas where they can get customers who they can trap into believing that they need lab tests like they need step counts from a fitbit. Hopefully, this bump in the road will caution others trying to do the same thing, but I really doubt it.
http://www.zerohedge.com/news/2016-01-27/beating-dead-unicor...
All kidding aside, wasn't there some other controversy or someone revealed something about Theranos not too long ago? I guess I was right https://news.ycombinator.com/item?id=10984035
It was all very beautiful to observe. ;)
The USA is the only country in the world with the word America in the name. Part of the world does consider North and South America to be one continent, but most of the English speaking world does not. Therefore in English there is no ambiguity when referring to someone as an American.
You'll also note that no one has any issue with Australians calling themselves Australian, despite the fact that Australia is not the only country on the Australian continent.
Seems like an easier approach than inventing breakthroughs in microfluidics.
imo if Theranos had stayed out of microfluidics and stuck with fundamentals of testing but done it well- regular draws but used the best trained phlebotomists who can find the vein on the first stick, do a painless draw and really improved their model of "easy access" walk in Walgreens testing, immediate/fast under 24 hour results, pay up front and low cost, they could have overtaken Quest and Labcorp just by exploiting inefficiencies in that market. Instead they got too sidetracked focusing on razzle dazzle nanotainer microfluidic science that doesn't even work.
"...regular draws but used the best trained phlebotomists who can find the vein on the first stick..."
That's the advantage of a finger prick. You don't need to be a trained phlebotomist to do it. The microfluidics drove the idea that you only needed "a few drops" to perform the tests (since drawing 100mL out of a finger would take forever). Put those two together and you had the concept of a test that any semi-skilled person could perform in a drugstore. That was the hook Theranos was banking on.
Yes, but Theranos still had phlebotomists doing their finger pricks. Also, phlebotomists aren't that expensive. Even in the Bay Area I think they only make around $18 an hour. Cheaper than a nurse, for sure.
The remainder were run through traditional ELISA and clin-chem machinery from other companies.
2. What others who know more have stated is that for many tests, there's a fundamental difference between venous blood (taken from a high-volume vessel) and capillary blood taken from a tiny blood vessel in an extremity. It seems that it's not all about volume.
"New Harvard study reveals Institutional Corruption of Pharmaceuticals and how FDA cannot be trusted with public safety"
I'd imagine this negative media attention is stressful for them - like it is for any startup. Should minimally wait for something substantial to see if there was any actual wrongdoing - there's not much here so far.
Not sure why you're being deliberately obtuse about what Theranos' failings are. Their alleged disruptive technology has never been shown to work. Their lab where they use other companies' technologies is in such a state of disarray that Medicare has publicly stated that they may be endangering patients' lives (i.e., through cross-contamination of samples, inaccurate labeling, etc.).
Multiple former employees have talked about Theranos' failings, and multiple government agencies have audited/inspected Theranos and found it severely deficient.
I'd imagine this negative media attention is stressful for them - like it is for any startup.
Good. They should be stressed out. They've taken almost $90 million dollars and all they've accomplished is putting people's lives at risk so they can play startup.
Should minimally wait for something substantial to see if there was any actual wrongdoing - there's not much here so far.
There isn't just actual wrongdoing--some of the allegations rise to the level of criminal wrongdoing. Felonies, not misdemeanors. It's very possible that the founder ends up in jail when all of this is done.
Asset bubbles can be like wars, they can waste the promise of an entire generation, never to be recovered. Nobody wants to see a collapse for collapse's sake, but there is quite a bit of social good in avoiding or deflating an asset bubble, be it in residential mortgages, late stage technology companies, or a 20 year old college student who was allowed to lose tens of millions of dollars of people's pension money just because she happened to be born in the right neighborhood.
The blame should go to those who breached that duty. It seems that at minimum they engaged in misleading statements about the degree of progress they had made with their technology. That's certainly unethical and possibly fraudulent.
Maybe they are being unethical or it will turn out they don't actually have a real product, but it seems kind of early to lay on the kind of hostility people have been. A small part of me wonders if it's because there's a female founder.
2) Neither of those companies had anything even a little bit close to a ten year run and a $9bn valuation. It's one maybe two entire orders of magnitude bigger as a flame out.
Pretty sure that's exactly what this is.
It's not just a paperwork issue.
This is that "unknown" thing
https://en.wikipedia.org/wiki/Clinical_Laboratory_Improvemen...
> Clinical Laboratory Improvement Amendments (CLIA) of 1988 are United States federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States
She's working her ass off to build a company with a mission far more important than email marketing or advertising or Candy Crush or blockchains.
Were they overly optimistic in their projections? Probably, but try starting a company and not being optimistic. You'll never get off the ground.
Did they not take reasonable precautions in an industry (biotech/healthcare) with serious repercussions? Absolutely. There are very real questions about her empathy and ethics.
That said, let's stop getting giddy every time Theranos (or some other startup) shows weakness. As founders — those "playing startup" excluded — it is incredibly hard. Let's have some empathy ourselves for those who have (likely) fucked up.
And from all accounts, she's too busy playing PR games, as opposed to treating this like a mission far more important than email marketing.
Theranos is in the business of medical testing. This is not an industry where you can half-ass your way through certification... Or where scrutiny like "Does the product you've been selling even work?" is misplaced.
Theranos could dismiss this entire charade, if they could only provide evidence that what they claim to have built actually works.
I do, however, question what the after-the-fact self-righteousness does for anyone.
Should no one be working on this problem? How do we invest in potentially innovative ideas in more complex fields before they have proven it out?
You have to understand that's a ludicrous fallacy of the excluded middle argument you're making.
There is a long way between wanting nobody to work on this problem, and thinking it's a good idea to give tens of millions of dollars to a bright but utterly inexperienced college student to work on this problem because she happened to be school friends with some VC's daughters.
[0] https://www.brainpickings.org/2014/01/03/baloney-detection-k...
It's very difficult to take them seriously as a diagnostics company.
No.
> How do we invest in potentially innovative ideas in more complex fields before they have proven it out?
Honestly, you invest in carefully proving out those potentially innovative ideas before you release them. That way you have good data convince people who claim your ideas don't work.
When people deal with live samples more ethic and certifications than for IT scaming techs is expected by the stake holders .
And the cohorts of bad news on theranos, the misdoings and also the handling of PR with spin doctors does not inspire "an ethical empathy" with theranos.
VC funded startups really don't seem to be able to have any ethic. They look like psychopaths right now that use their so called hard work as an excuse for their lack in the fundamental of trustable business and respect of consumers.
Vae Victis.
Theranos may pay for a little more than their own share of wrongdoings. They may pay a tad for a broader distrust of so called "new tech" scams also known as unicorns.
The bigger you try to manipulate opinions, the more the opinion may resent you.
For now I have a solid hammer against them, I am waiting for sharp factual nails to seal their coffin.
Why hurry? It is clear they cheated the wrong people (investors) and investors are gonna provide us the nails. Polished, sharp, hurtful provided by audits and leaks.
Let's get some popcorn and tomatoes and watch the world of some selfish aristocrats burn.
I'm working on a hematological microfluidic diagnostic device in a loosely related space (which actually works), and if my team had her funding we would be flying right now. Too bad we aren't attractive women with inspiring stories so we have to settle for grant funding.
well, cabin fever until the 3rd season of "SV" is out. In the meantime have to survive on daily ration of reality show like "guess whose horn is just a plastic cone", with today episode featuring Theranos.