The only surprising thing about this news is that its only 41%, i figured it would be closer to 100%
I can only imagine being one of the researchers or engineers there really believing you would be able to change the world and getting crushing news like this. It would really suck.
Hardware is hard. Let's go shopping. :)
However, that doesn't have to be the end.
You can narrow the usage to something like "Use for routine visits to collect data quickly but not for diagnostic reasons". Being able to do a very fast test without drawing much blood for every time you visit the doctor would be useful information over time. There's also a "Hey, that number is a bit high. Let's pull a real amount of blood and see what's going on." I suspect that if you correlate the information over multiple tests it gets much more accurate very quickly.
In addition, I suspect that the engineers would have eventually worked out how to correlate things correctly and figured out how much blood was required for what level of certainty.
Finally, most people in the biotech sector understand that it's a "pump and dump" scam. You invest, wait for the company to get some good news, and sell to the next layer. Biotech often takes long timescales and different investors toss money in at different points.
However, what doomed the company was Elizabeth Holmes lying. I could make other comments, but, really, Theranos would still be fine if she had told the truth. People know that biotech always runs into problems. Always.
Your CEO is one of the people who must not lie (your CFO is the other). Your sales people can lie. Your marketing people can lie. Oddly, even your CTO can get away with some things, but normally the CTO is a shining beacon of truth compared to most people in a company. If your CEO always tells the truth, the CEO can say: "We've hit some snags, but the engineers think they can work around them" and people will believe because they want to believe.
But once your CEO is known as a liar, you are doomed.
However, I expect that Elizabeth Holmes will be back far too soon and will wreak havoc on an even larger scale. She is just Carly Fiorina writ 35 years later. She will fail upward because she is a not-unattractive blonde female with lots of rich family connections.
A larger scale than raising $10b for vaporware? No way. She's the biggest business fraud story of the decade, and in the top 5 for the 21st century thus far. I can't imagine she'll ever raise another penny of VC, for Theranos or anything else. Nor will she have a future in politics - Fiorina may have been controversial and destroyed jobs but she did so in a way that conservatives could frame as being a "pro-business" success. Even if most politicians are fraudsters of one kind or another (and ironically Holmes's skill at fraud, deception, secrecy and doublespeak might predict her being a skilled politician), there's no path to politics for someone whose life story is already so publicly toxic.
I used to think this and then look who we elected. In reality, you just have to keep making up lies on top of lies and somehow things seem to work out for you. Just never admit fault and reflect all your bad qualities on your critics and there is a good chance that at least you will muddle the waters.
If I had to pivot a miniature lab that fails because of small sample size; I'd think of just making it invivo.