Theranos closes last blood-testing lab after reportedly failing an inspection
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It seems like there's a pattern of high profile failures of highly funded science-based startups.
From the outside the science seems faulty from the start, the management team seems to have no strong scientific background.
Do investors really fund purely based on their force of personality? Personal connections? Do they see a big market and then ignore the scientific DD?
I'd love to understand this better.
In the case of Theranos I believe it was this. Elizabeth Holmes seemed to have an "in" with a lot of Washington D.C. influencers and I'm pretty sure her pitch was based on using those connections to score lucrative DoD contracts.
her father has that "in". USAID is sometimes a cover for CIA, and the "network effect" here has been extremely high.
If you needed to find government patrons willing to invest in a corrupt organization and engender goodwill at the same time, USAID is not a bad choice.
To the specific scenario, when N is small all kinds of idiosyncratic bad decision making can happen.
I'd love some examples of good plays in this area (that is, those that resulted not just in acquisition but viable products). This area being life science tools/diagnostics.
From the companies I've been it seems to be biased toward crazy plays that had a stack of money thrown at them. Honestly would like to hear about others, know where to read about others.
At Aperio I was on the team that designed a digital pathology instrument. At the time this was pretty new tech. We were purchased by Leica a little more than four years ago.
After that I went to epic sciences. We will be releasing our first LDT this year in a partnership with Genomic Health. It's a blood based prostate cancer test with demonstrated clinical utility, the first of its kind in the CTC space as far as I'm aware.
The need for venture financing arises when you're anywhere below 100% reliability, and are temporarily in this "fake it 'til you make it" category where the company has to rely on regular doses of cash infusions without much to show for (potentially) years. The problem with that approach is that for some the "make it" never quite materializes.
When your CEO founded a company after only a semester of a Chemical Engineering program, there should be red flags everywhere.
There's the one story that you can read in articles like this, which will provide details of the rise and fall:
http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther...
But, there's another side: it happened because you weren't allowed to question Elizabeth Holmes. The beauty of the Internet is its natural history keeping. If you want more insight into how this sort of thing happens, look no further than early discussions about Theranos on these very boards. It was difficult to be critical, and supporters implied that the naysayers were merely "sexist". Of course, this was happening when tech industry sexism was peaking in the news cycle, and I belive that quieted some criticism.
Where?
Story from two years ago, before it blew up: https://news.ycombinator.com/item?id=9440595 - Lots of criticism, some even calling it a scam, yet no mention of sexism nor heavy downvotes.
The original submission: https://news.ycombinator.com/item?id=6349349 - Some criticism, not downvoted nor called sexism.
Tell me, where are all those comments warning us about the impending doom at Theranos and getting silenced by supporters calling them sexist?
There have been nearly 500 Theranos articles posted here over the years. You conclude it didn't happen after looking at two?
As someone who participated in the conversation, I know it happened. I'm not overly concerned with combing through the articles to convince you. The OP asked "how this happens"; if you don't think "girl power" at a time when sexism in tech was all over the place was one of the factors that led to an unqualified 20-something overseeing a potential giant fraud, I'm not sure what to tell you.
I looked at the two I could find with comments from before the whole thing blew up. The vast majority of posts about Theranos are post-blowout, from the past year and half, not those early discussions you were referring to.
> if you don't think "girl power" at a time when sexism in tech was all over the place was one of the factors that led to an unqualified 20-something overseeing a potential giant fraud, I'm not sure what to tell you.
I find your restatement of the previous claims inaccurate. You said "It was difficult to be critical, and supporters implied that the naysayers were merely "sexist"", which is much more specific that her gender having been a factor in story. Yes, it might have. Not in the way you portrayed it, though, in my opinion, at least not in HN.
While I don't like to see people lose their jobs or companies close up, I feel like the company looks at safety as a roadblock to them being called geniuses and making money rather than part of their processes. Usually problems like this stem from senior management and is likely to not change unless someone else takes over entirely.
http://www.wsj.com/articles/theranos-whistleblower-shook-the...
The incoming administration doesn't even need to push through radical new laws/regulation. All it needs to do is to choose not to enforce them, or delay it indefinitely (well at least until the end of their term).
The main criticism from outsiders all along has been that blood drawn from a pin-prick just has too much variability for reliable blood testing. Which in turn means that Theranos’ approach to blood testing was never going to work for anything quantitative - it might be OK for 'is this chemical present or not' but not for anything else.
They spent a long time using traditional blood tests alongside their pin-prick versions (this is the service they were selling to Walgreens(?) - presumably they used their investor cash to subsidise the service & undercut their more traditional competitors) whilst trying to get the pin-prick to work but they couldn’t even manage to do those correctly.
How they managed to get this far is a question of hubris and investor gullibility. There’s also the possibility of outright fraud, but we don’t know if that was the case at this point.
Case in point. Major companies like roche and abaxis have had point-of-care medical devices that perform blood testing for various parameters that use a drop of blood.
Theranos's problem was that they said they could do pretty much every parameter under the sun, and they used an FDA loophole to operate their lab. It was later discovered that 90% of the tests were not being processed with their supposed technology.
If this is the case, why the hell are we using it for blood sugar level testing in diabetic patients?
Sugar is present in sufficient quantities that the variation you get from one pinprick to another isn't going to be a big deal.
Many other things will be present in small enough concentrations that even if it is present in your blood you might not have sufficient quantities for it to be detectable in blood from a single pin-prick.
Because it obviously works for sugar level testing, but not for the kind of tests Theranos claimed to do?