DFJ's Draper: There's Nothing Wrong with Theranos [video]
bloomberg.com
bloomberg.com
http://www.wsj.com/article_email/theranos-voids-two-years-of...
It's even more ridiculous to call her one of the greatest female entrepreneurs!
I had a lot of respect for Draper but this is so disappointing. Just to make sure their investment does not hit a big ZERO value, they seem to be siding with an entrepreneur who has wronged everyone! What a shame!
That said, it makes me wonder how it is possible for someone to live so far outside a reasonable view of the world. We should critically examine the press, but these days conspiracy theories are running rampant and we can't seem to agree on a common set of facts to examine anymore.
The facts here are clear, Theranos has sold a product that doesn't work irresponsibly, and done so without proper science.
After Theranos admitted fault, he retracted those comments.
Didn't you ever read Founders at Work and what DFJ did to the Hotmail guys?
0: http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrenc...
> “They basically tell the story of how Elizabeth Holmes created these fraudulent blood-testing machines, raised $9 billion through venture capitalists in Silicon Valley, and refuses to admit they don’t work even when it is obvious the testing is inaccurate,” says a studio source familiar with how the project was pitched.
This old hat: they were valued at $9 billion by VCs while raising $400 million in 2014.
http://www.sfchronicle.com/business/article/Theranos-spokesw...
Seems like a Google - Hilary thing :)
The interesting thing here is that we can't just say that's not true.
I am not making a larger point about solipsism or our inability to know reality. I mean the much narrower point of not being able to tell -- from the press -- whether a company actually has a technology that works.
Think about the implications that has for investing in public stocks.
Let's ignore the cases of fraud like Enron etc., and focus on an ordinary company that honestly reports what it is doing.
EDIT: I have followed the Theranos story, so I know about the legal actions etc.
What I can't tell is if there is poor science at the heart of it, or it is a case of poor scaling and application of good science.
If it did work, it would be straightforward for them to demonstrate that it did.
I can't tell if it never worked, or if something prevented it from scaling.
http://www.wsj.com/article_email/theranos-voids-two-years-of... ??
There have been empirical actions which resulted based on Theranos's errors, including FDA/SEC investigations and Walgreens revoking their partnership. Those aren't media spins.
There is a difference between the tech that doesn't work and tech that cannot work.
The former will work eventually, but the latter can never work.
Can you tell which it is?
Famously Walgreen's didn't do due diligence.
> There is a difference between the tech that doesn't work and tech that cannot work.
It was already pretty well known that blood concentrations vary enough in the body that you need large samples to get reproducible results. Life science VCs all passed on this deal. The fundamental science was not there.
Note: I have worked in pharma and designed successful clinical trials.
In other words:
1. Is it fraud and poor science? 2. Is it good science but still immature?
That is the key distinction.
There has always been a simple solution to this: it is the company's own job to clearly demonstrate that it has a working technology.
If you view it that way, then the press's inability to prove it one way or the other doesn't matter because the responsibility lies with the company. In fact, Theranos was quite unusual among lab companies from the beginning in that it didn't follow the path other companies followed in showing they had a working technology. Anything less than a clear proof by the company, and the subsequent confusion is the company's own fault.
Healthcare is one area where many people (particularly Americans) have the absurd idea that everything has to work perfectly.
Think of the level of indignation people feel when a surgeon who spent 15 years beyond college doing advanced training (for little pay) makes a small mistake that costs someone's life. Or an OB misjudges something and ends up in a major lawsuit.
But for other jobs, mistakes are a part of life. In software we are proud to decrease our bugs through testing and improved techniques and processes, but nobody expects perfection. Even mass market products like TurboTax ship with tons of bugs. Lawyers routinely let innocent people wind up in jail out of pure incompetence.
We need to get over it. Theranos is doing something very smart and while it needs some additional refinement, it is pretty clear that doing large scale blood testing/monitoring is the future of diagnostic medicine.
The irrationality we have about healthcare being perfect is a) false (mistakes get swept under the rug all the time) and b) counterproductive because it gives us a sense of mastery over our destiny that we simply do not (yet) have.
Let's also not forget that medicine is plagued by a very irrational risk aversion, which is why many useful treatments are available around the world but not in the US.
There's a line between not working perfectly and not working at all.
http://www.wsj.com/article_email/theranos-voids-two-years-of...
There is a reason Healthcare is regulated and required multiple degrees of testing before it can be released to the general public -- imagine every new "health startup" pushing new drugs and then saying they'll "fix a bug" when a couple of folks die. The comparison is immature.
Quite the opposite. Health regulations suffer from a number of perverse incentives that economists have studied extensively:
Drugs are needlessly delayed in getting to market. Doctors and patients are perfectly capable of assessing the risk/reward of an unproven treatment by looking at scientific studies. The FDA adds a layer of false-security... in spite of its sluggish process, the FDA is often quite wrong and drugs that were approved get taken off the market. For other drugs, they are delayed for several years and much harm is caused. Economists have studied this and found that regulators cause much needless suffering and death by being excessively risk-averse.
Consider too illegal drugs. Our regulators criminalize many substances, resulting in black market behavior and significant crime and other negative effects. Here too, backward regulations cause much unnecessary suffering, death (and crime too).
For people who do not understand healthcare, the world appears quite black and white. In reality no treatment works all of the time, and no test is without its share of inaccurate results. Doctors are equipped with enough Bayesian reasoning ability to use the available information wisely.
Also, a physician should not base any decisions on a single blood test result. That is not the proper way to use such tests. If it were, doctors and medical training would not be necessary. Most tests have a significant probability of false positive and false negative results, so docs are trained to consider the results only in the context of other diagnostic clues.
Yes, healthcare tech should at work at near perfect. There is an enormous difference between getting poor search results or not seeing photos of your drunk friend from the weekend and determining if you have a life-threatening illness. Healthcare is not an area where you want to be "bug testing" and the outcome can be life or death.
I agree that the tech should be explored and probably could be refined over time, but healthcare is an industry where you can't "fake it till you make it."
When you start to slide wildly of those bounds? That's when you get shut down. Where was Theranos?
See the problem?
Compare that to Theranos, where non-clinicians were deceiving customers with a tech that could not work in order to make money.
That kind of behaviour is rightly criticised.
Indeed it is. I think there is a big difference between a promising company whose technology has a few bugs and whose salespeople are overzealous and unethical, and a company that is an outright fraud.