Holmes to remain at Theranos despite federal ban and gross negligence | Hacker News Reader

Holmes to remain at Theranos despite federal ban and gross negligence

arstechnica.com

40 pointsetendue32 comments

I am not surprised. Theranos exists as a cult of personality around Holmes and without her, it would be obvious that they provide no value over their larger, more efficient competitors.

I was not aware of the cult of personality aspect. Is she a remarkable leader? visionary?

A cult of personality doesn't require either[1] [1]https://en.wikipedia.org/wiki/Jonestown

Jim Jones was exceptionally charismatic.

The cult of personality was the only reason for Theranos existing. Holmes is a young, rich Stanford dropout who idolizes Steve Jobs down to the sweaters, lives like a monk while consuming elaborate vegan smoothies, and claimed to be upending generations of practice with the power of outside-the-box thinking. She raised money and endorsements by being Silicon Valley's wet dream, while the scientific establishment's concerns were ignored.

She was so good at thinking outside the box that she fell off it

Let's not ignore the elephant in the room. She was also held up as a successful female entrepreneur/leader. There was a lot of expectation for her to set an example and be a role model.

That... Did not work out very well. The woman behind Spanx would be a better role model for my daughter, methinks.

And that's considering that my daughter likes to look at blood under my microscope.

She wears the same thing everyday and dropped out of college,so, yes.

So, I guess the plan now must be to shut down all non-R&D parts of the company, and try to maintain/sell the R&D division and its IP. I can only imagine the level of due diligence any potential buyer will apply.

> Still, last week’s news raises the question of what will happen to the company’s other clinical laboratory in Scottsdale, Arizona, at which 90 percent of the company’s tests are processed. So far, that lab has passed regulatory muster, and the company said it will remain open for now.

I find it interesting that their Arizona lab passed...would this imply they do indeed have a legitimate product?

I read at numerous points that they were using the older machines they were supposed to be "disrupting" the industry away from to perform tests, perhaps the Arizona lab is where they have those kept?

Either that or the Arizona regulations are just a little looser.

> Either that or the Arizona regulations are just a little looser.

Arizona is still in the United States, so it has the same federal regulations ;-)

Who knows, though, maybe they were just busy with the smaller lab and haven't got to Arizona yet.

That's entirely possible. My instinct would be to say that California would have more strict regulation but we could also be dealing entirely in federal.

"We" are. FDA is the relevant regulatory body.

Your first thought was the correct one. This from last year:

Theranos halted the use of its finger-stick draws, collected in a small tube called a nanotainer, after the FDA declared the container was a medical device that should be regulated. That decision did not affect the company's Scottsdale lab, which exclusively uses FDA-approved blood analyzers and instruments made by companies such as Siemens and Olympus.

http://www.azcentral.com/story/money/business/consumers/2015...

No, it implies that Siemens sold them a legitimate product.

A pretty good example for why this founder as perment dictator corporate structure is really short sided. Nobody can fire Holmes since she controls the company herself.

Is Theranos cash flow positive? Or do they still rely on investments? Who would invest now.

If she owns* it, why shouldn't she able to stay? If she didn't control the company I would imagine any competent board would boot her, but she does, so she has the right to stay and bring the company down in flames if that's what she chooses to do.

* in the sense that she controls 50% + 1 of the votes

> in the sense that she controls 50% + 1 of the votes

Well there's the issue, a lot of these companies distort their ownership structures with multiple classes of shares in order to get around the usual 1 share, 1 vote scheme.

So does the moral principle of ownership resulting in control still apply when they may technically "own" very little?

She controls the company, but she doesn't own 50% of it. I think it's a stupid way of governing a corporation. You are asking for shit like this happen.

> she has the right to stay and bring the company down in flames if that's what she chooses to do

Not really. Even if she owns it she has a fiduciary responsibility to her other shareholders as an officer of the company.

Unfortunately it is quite possible that Holmes staying put IS in the best interest of all other shareholders given how little else Theranos seems to have going for it...

Silly commoners, laws are for poor people!

Amazing, simply amazing. She's led a company that has either committed such gross negligence as to not be trustworthy to operate a lemonade stand let alone a medical company OR been openly defrauding both consumers and the Government but remains near as makes no difference completely unaffected and will walk away not only a millionaire, but apparently still employed.

I hope one day I reach that magical level of employment where no matter how bad you fuck up, you still win.

Holmes is the product @ Theranos. It's evidently clear their blood testing machine doesn't actually work. If you look at the positive (old) media coverage of Theranos, the lion-share of it revolved around her dropping out of Stanford, female founder, and hell I for some reason know she played an instrument as a kid... The cult of personality was used to raise funds, not the Edison.

Well thank goodness we have a token female founder who dropped out of Stanford and is apparently not qualified to run a Taco Bell.

Am I the only one who thinks this is far more harmful to the cause of getting more women in tech/entrepreneurial roles than helpful? This whole thing is a bad joke.

What's harmful is looking at someone in this kind of position primarily as a woman.

Compare the treatment of Holmes to that of Parker Conrad, the ousted Zenefits CEO. Conrad is a white guy who went to prestigious New York schools and then Harvard.

Is anyone saying that Conrad doing a bad job as a founder CEO will be harmful to white Harvard graduates everywhere? Of course not. You only "reflect badly" on your peer group if it's a minority.

> Is anyone saying that Conrad doing a bad job as a founder CEO will be harmful to white Harvard graduates everywhere?

No, because people have plenty of competing examples of white male Harvard graduate CEOs of startups. So one outstanding failure (or unusual, for the category, success, for that matter) barely moves the needle on the expectations of the category.

> You only "reflect badly" on your peer group if it's a minority.

Well, yes, the smaller the group is in the targeted field, the more significant each example is in terms of the visible outcomes of that group in the field, and, also, the more a group is excluded from a field because of a bias that the group is not suited for the field, the more a failure from the group reinforces that bias.

(I'm not saying that its not wrong, or that its not often the result of people failing to look beyond the superficial to understand the individual factors, because all that's true.)

When there isn't much data, you shouldn't be segmenting your population. Instead it is common in data analysis to collapse variables to have meaningful observations. Why would that be any different here?

Holmes has been sold to us as a woman. On the other hand, there is no need to sell a Harvard degree to anyone, everyone knows that there are benefits in being a Harvard Man.

> She's led a company that has either committed such gross negligence as to not be trustworthy to operate a lemonade stand let alone a medical company OR been openly defrauding both consumers and the Government but remains near as makes no difference completely unaffected and will walk away not only a millionaire, but apparently still employed.

There's a lot more investigations still going on where she might face personal consequences (including criminal ones), and she's still employed because she is both the employee and the employer (being the majority shareholder of the firm by which she is employed), so to be fired, she'd have to fire herself.

Of course, she's only employed as long as Theranos can stay in business, and its hard to see how they do that going forward.

I'm still waiting for the criminal charges.

"And the company also faces criminal probes from the Department of Justice and the Securities and Exchange Commission over whether it misled investors and regulators [..]"

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