Walgreen Terminates Partnership with Theranos
wsj.com
wsj.com
This seems to be a common thread in the stories I've read about Theranos, an almost pathological inability to provide basic information upon request. I can only guess that Holmes' notion of open and transparent communication is defined very differently from what most people would consider it to mean.
A big warning sign to me is also the bizarre collection of company reviews on Glassdoor [1]. It's really fascinating to me that anybody would even consider turfing their own company's reviews with this kind of ham fisted, single voice corporate speak nonsense. I wonder who inside the company is responsible for writing all of these? Holmes herself? Regardless, it's a really fascinating look into how Holmes has prioritized things.
1 - https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h...
https://www.glassdoor.com/Reviews/Employee-Review-Theranos-R...
Advice to Management
You are doing a good job. Stay in better touch with the
employees. I think most people do feel appreciated but
there are also some that are disgruntled and unhappy for
other reasons. I see these people spreading negative energy.
You should seek them and try and fix the problem.
If well-known companies are doing that, it's not unlikely that some companies are directly instructing HR personnel to write favorable reviews.
Let me rephrase that last sentence: GlassDoor was brought up literally at every monthly update meeting.
But back on target, I'm torn: On the one hand I understand the need to actively recruit and attract talent to join your workforce and I definitely understand GlassDoor is something used by many people to benchmark their expectations on working environment, management and peers. I get that completely.
Where I break off though is when you have to ask your employees to write a review (even if you're adding the qualifier "Be honest, we wont penalize you") instead of creating an internal feedback environment that can go into recruitment, retention and employee/manager review platforms.
I would say there's already a power imbalance inherent to the workplace, especially if you're in one of those "at-will" states. So putting in front of your employees "Hey, can you go write a review of working here on this site?" understandably makes some people shift in their seats.
Unless you think people fear being ID'd... but that's a problem with the whole model.
Anyway, I'd imagine many glassdoor reviews were generated this way. If employers didn't ask, it would be mostly bad reviews from ex employees. Few others would bother.
1) It subtly anchors execs and HR to accept your perk as reasonable, especially because the people paying attention to Glassdoor are far removed from your manager and don't actually know if you have those perks or not. "Since our company already does it, it must be a good idea," thinks the exec.
2) Your coworkers see the reviews and assume the perks are true but unevenly distributed, thereby further ingraining the perks in the company zeitgeist.
3) If you are eventually found out, nobody will ask you to write reviews any more.
and 4) Candidates, including good candidates, will come to interviews and say things like "I've heard you have 20% time, that's a great idea, tell me more about it." This fans the flames in favor of your perks.
I used this technique as part of a wildly successful give-us-more-perks agitation campaign in my previous job.
Eh, that just means you can't take the reviews at face value. Ignore the obviously disgruntled employees, treat fluff reviews as a small yellow flag, and look for the real dirt not so much in the angry reviews but in the disappointed ones.
You look at the low ratings, and if they're coherent and make sense to you then take them seriously. If more then one make the same claims, then it's probably true.
> Everyday brings new challenges, and you are able to approach these challenges with autonomy and creativity.
gets Helpful (1) and
>"House of Cards comes crashing down"
...A front row seat and education how to adulterate documents and strategy!
gets Helpful (76)
Other one threatened to sue me because I had signed a non-disparagement agreement after a layoff.
[1] https://www.glassdoor.com/Reviews/Employee-Review-Theranos-R...
'Cons Not a con, more of a note -
It is a start up environment, which means that it is very fast and dynamic. It calls for a lot of hard work and creativity. Theranos is not for someone who is set in his or her ways, or for someone who is simply looking for a 9-5.'
If you take a job, find the experience to diametrically-opposed to how it was represented on GlassDoor and suspect your hirer of astro-turfing, a lawsuit with discovery would quickly uncover the action.
Seriously, what could possibly go wrong when companies can get sued over the inaccuracies of anonymous third-party review websites?
Reminder: you don't need to lose a lawsuit for one to be enormously costly.
This is tangental, but I also think that posting open job positions online when there isn't one should be considered fraud as well. Same with recruiters who do the bait and switch. People invest time from their lives into those, only to result as a record in a database somewhere when there was never any intention to hire.
Failures are as important as successes, and nothing to be ashamed about from the employee perspective, just the covering up by management that's the problem.
Anecdotally, I once worked for a company that did this same thing and the feeling in the company much more closely matched the longer-form negative reviews than did the astroturfed reviews...all of which were written by one H.R. exec shortly before they were let go from the company.
a) Poor planning on the part of management, resulting from not enough resources or hires
b) Poor market performance, leading to having to squeeze more out of the existing resources to get the results originally projected to the investors
Certainly there are people who like to work long hours and there are jobs that will give them all the work they can want, but those typically aren't the people complaining about it.
Hey - someone can do some NLP work to estimate number of authors, right?
Facepalm.
Walgreens had an official partnership, including an investment of $50m, into Theranos.
If there is actual consumer damage shown its Walgreens that's going to find themselves writing checks to tort classes and attorneys.
In the entire WSJ expose it sounded like Walgreens management was as snowed-over as the rest of us with regard to Theranos' "technology" but it's crazy that they didn't do more relatively simple due diligence given their exposure
[0] http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-...
Insurance!
I've seen a certain mentality in people, including managers in the more "boring" companies in our economy. Silicon Valey companies are glamorous. There's a certain star mentality about it. Silicon Valley is in the news, the founders are rock stars.
I think the management of "boring" companies is as star struck as the rest of us are. They shouldn't be- they run huge companies employing many people, doing complex things and making profits. In this case, the star power blinded them and they'll pay a large price.
Also, I'm British, and the Alliance Boots deal was big news.
Look at the turnover in the Fortune 500: http://www.wired.com/2012/06/fortune-500-turnover-and-its-me...
I speak from experience when I say that it is easy to be fooled into believing people when those people actually believe they are telling the truth.
Bottom line is this is all on Theranos, and not Walgreens.
The fact that Walgreens has no such person on their board is their failing, in my opinion.
But according to a very relevant ArsTechnica article[0], they thought to do due diligence, failed to do so, and then in a fit of unicorn mania did the deals anyway:
Theranos failed to hand over an Edison to researchers hired by Walgreens to kick the tires and ensure it worked correctly, despite initially agreeing to do so. The young company, initially valued at $9 billion, didn’t even allow Walgreens executives to enter its lab or walk around the company’s headquarters without a chaperone, the WSJ reports.
Theranos did provide an Edison prototype and sample testing kits to a Walgreens executive. But the machine only spit out test results such as “low” and “high” so that Walgreens couldn’t compare the results to standard blood testing equipment. Nevertheless, Walgreens moved forward with a deal, partly out of anxiety that Theranos might partner with a competitor.
[0]: http://arstechnica.com/science/2016/05/walgreens-failed-to-v...
This is why the current company system is a bad idea. It puts incompetent idiots in charge.
This is almost literally the definition of an epic failure. If you're running a health company and someone shows up on your doorstep with some unusual claims about their product, are you going to pay someone to do some independent checking, or are you just going to rely on social proof and the fact that the marketing person seems okay?
Making management decisions on the basis of status and social proof - and that includes the VC scene - is the opposite of collective intelligence.
EDIT: Looks like it's mentioned a few paragraphs into the article:
Walgreens leaders decided to end the partnership after regulators disclosed problems at Theranos in late January, but held off on finalizing the separation because the company feared Theranos might sue, said people familiar with the matter.
https://theranos.com/news/posts/statement-from-theranos-7
Quality and safety are our top priorities and we are
working closely with government officials to ensure that
we not only comply with all federal regulations but
exceed them. We are disappointed that Walgreens has
chosen to terminate our relationship and remain fully
committed to our mission to provide patients access to
affordable health information and look forward to
continuing to serve customers in Arizona and California
through our independent retail locations.The fact that a major chain was selling them also seemed to indicate to me that there was something real in Theranos. Probably a lot of people think the same way, and are disappointed.
To summarize regulatory action:
Theranos sent in a marketing application to FDA for one of the use of Edison with one test, FDA said OK, this looks good based on the data you sent us (FDA can only see what you send them). FDA then placed Theranos on an audit list (common practice for any new company), stopped by after a few months, and found out that Theranos' own internal procedures for making sure that the data they generate about their product's performance is honest were, shall we say, poor. They also found Theranos marketing other components that they had not sought clearance to market from FDA. So FDA issued a 483 (deficiency notice) and the fallout from that we have yet to see. (I personally think there will be another shoe to drop here.)
Now, on the lab side, which is regulated by the Center for Medicare and Medicaid Systems, not FDA, the process is different. Basically CMS allows you to get a preliminary certificate after a cursory inspection and gives you 2 years within which to build a real testing process and get your shit together before they do the real audit. Theranos's Bay Area lab got the preliminary certificate and massively failed the real audit, and then massively failed to fix anything, which is what's landing Holmes in potentially very hot water (being banned from the diagnostic industry for two years in the US). The reason this is structured this way is that 1) to have enough data for a meaningful audit takes time and 2) the government expects anyone contracting with a brand new lab for the first two years to understand that it's a brand new lab and act accordingly (i.e. be skeptical, do your own audit, don't take NewCo's evidence at face value).
Most people in the industry understand this. Hell, most people at Walgreens understood this and were properly skeptical [1]. But the top execs at the time overrode the valid concerns of their QC people in order to chase the unicorn.
[1] http://www.wsj.com/articles/craving-growth-walgreens-dismiss...
Sad that it did not come true.
If the partnership is terminated, then Walgreens must know something is very off.
#1: Novartis: Economics, MBA
#2: Pfizer: BS chemical engineering, chartered accountancy
#3: Roche: economics, law
#4: Sanofi: MD
#5: Merck: veterinary medicine, PhD
I'm really curious what sort of path takes someone from training to be a vet to heading up a global pharmaceuticals company.
Lately there's been a trend towards thinking that management is somehow separate from doing things. It's a somewhat anglo-saxon thing, you'll find it less in the Germanic world.
It doesn't matter if their tech may one day only require a microlitre of blood to do a blood test. It doesn't work today. They were trading in the market as if it did. That can't be handwaved away. That fact isn't under dispute. That's according to several of Theranos's own current and former employees.
Extraordinary claims require extraordinary evidence. Scientists know this. The fact that Theranos's board lost all it's scientific leadership in July 2013 has been widely cited as a major contributing factor to this debacle. The judgement to not make those false claims is what running the company has to do with science.
Even if the product is great, the business model could suck and the company will fail.
2 - I worked at a medical startup in Palo Alto and I can attest that it is incredibly hard complying with all the FDA rules. Many are regulations that do little to protect consumers and exist from an outdated bureaucratic system. Others are lobbied into existence by big players like JNJ to protect themselves from startups like Theranos.
3 - Theranos was trying to do something that few people do - truly inovate in the medical world. As a country we have come to a point where little inovation is possilbe bc so many rules prevent the change necessary. We are not willing to accept any risk, and so we are stuck without progress.
4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things.
There are some things like medical information which should not be broken, and worst of all, lying about it.
But did Walgreens know this was Theranos' mentality? The investors, patients, the doctors using the unreliable test results?
If the Theranos stakeholders all hopped on to the "move fast and break things" train- I'd be all for it. Facebook had that as their well known public motto and people still invested and used the service. People don't want to break things when it comes to their health.
You just highlighted why I think "hustle" is a terrible word for the startup community to embrace. Google's dictionary (appears to be the Oxford dictionary) includes the definition "a fraud or swindle / to obtain illicitly or by forceful action". The Cambridge dictionary lists "A dishonest way of making money / to try to persuade someone, especially to buy something, often illegally".
By those definitions, there is no fine line - they're the same thing.
TL;DR people die when you move fast and break things in medicine, and your company gets sued for millions of dollars.
For much of the lifetime of the industry, NASA was the best there was. They embraced a "zero bug" mentality (http://www.jamesshore.com/Agile-Book/no_bugs.html). It resulted in very slow and costly development and we accepted that as the way things where, ie very expensive and little progress.
SpaceX came in with a move fast and break things mentality. They did not approach this in the way that had always been done (move slow and make no mistakes). They have greatly reduced cost and increased capability to a level that arguably would never have been reached by NASA, all without loss of life.
We don't need to test or develop medical in a haphazard way, but do have to accept that the way things work currently will not result many advancements (at least not rapid advancements). FDA regulations are fine until you realize that you have a currently incurable medial condition, and wonder if medical innovation was easier if you would have a cure.
Is the regulation to ease fear of a potential death/injury worth the many real deaths of people who we do not have treatments for?
They have greatly reduced cost and increased capability to a level that arguably would never have been reached by NASA, all without loss of life.