The Tale of Theranos and the Mysterious Fire Alarm
khn.org
khn.org
The only other stories I can think of are:
Eric Lakin (DeciBio Consulting), 10/2015: https://www.washingtonpost.com/news/wonk/wp/2015/10/27/what-...
Jean-Louis Gassee (former Apple exec), 10/2015: https://mondaynote.com/theranos-trouble-a-first-person-accou...
Melia Robinson (Business Insider), 10/2015: http://www.businessinsider.com/i-tried-theranos-2015-10
https://news.ycombinator.com/item?id=6349349
It doesn't feel that much more skeptical than typical HN threads about new companies. And skepticism/confusion was going to be more prevalent given how few HN users (relatively speaking) are in the health field.
Funny enough, if you scroll down far enough, you run into a comment that sounds like it came from a prophet. Or someone experienced in the field:
> The company is all hot air. They have a board full of retired military figure heads that have no experience in medical devices or retail services. Additionally, they do not have any products to show. Look at their patents. They are all very general and broad. There has been NO FDA CLEARANCE for anything they are doing, which raises legal questions. Speaking of legal, search for lawsuits they are involved in. Their core technology is not even theirs. They stole it from someone else.
That the board was heavy DC/military was well-known, or at least public. But I don't think it was well known that Theranos was heavily reliant on using other technology.
Sadly, that Theranos critique came from a one-use throwaway account. So likely an insider (or jealous competitor)?
Do you think Theranos just didn't realize anything was wrong because the board didn't tell them?
Its about teaching how to evaluate what your company needs and what your board can provide. It's about vision and evaluation rather than correctness.
The reason why is that the blood from a finger prick is a random mixture of veinous and arterial blood with a variable amount of cell debris and contamination from what is on the skin. Not even Kissinger (sorry I mean Lucifer) could give you an accurate diagnosis based on finger prick.
(I agree with your sentiment, just pointed out this to remind people that these prizes are not given by God)
Those are attitudes, and I think the matter is more epistemological - about what valid conclusions we can draw based on the known details.
For example, if we have incomplete information and we can't draw clear conclusions from it, rather than thinking of what sort of attitude we should take towards it (or optimistic vs cynical) -- what we think is likely the case -- our first step should be to admit the incomplete information and be agnostic about what's actually the truth of the matter.
If there are particular reasons for thinking one option (eg fraud) is likely then you can list first reasons and the facts that support them. Doing so doesn't and shouldn't have to involve an attitude like realism or cynicism.
I didn't really hear much about it until the WSJ blowup, but my perception was that Theranos wasn't in whatever scene that other startups are in when they get coverage from TechCrunch, etc. I know Tim Draper was an early VC backer (his daughter was childhood friends with Elizabeth Holmes), but did other Silicon VC know much about Theranos?
I know Theranos did end up getting TechCrunch-west-coast-style coverage (I mean, before WSJ blew it up). But I'm pretty sure that its very first press splashes were with the Wall Street Journal in Sept. 2013 [1] and then the New Yorker in Dec. 2014 [2].
The WSJ article was very interesting. Not just because it's ironic, given that a WSJ investigative reporter would be taking Theranos down. But because of the setup. It was weekend interview feature assigned to a Pulitzer Prize-winning editorial board member. And, unlike the New Yorker piece, was almost entirely a puff piece. Interestingly enough, though, the author describes the experience of having blood drawn via the fingerstick/nanotainer setup (i.e. the tech Theranos was aiming for).
Having your first public splash in the WSJ Weekend Magazine seems like a very East Coast thing. Amusingly, when Theranos was burning down, it was revealed that Rupert Murdoch had a $125 million stake in Theranos [3]. Which probably explains the WSJ puff piece, since Murdoch owns the WSJ.
This is all to say that Theranos's early years as a startup seems to have been much different culturally than the usual Bay Area startup. I wonder how Theranos would've fared or been different if it had operated like a highly-funded SV startup (Color, Clinkle, or any other high-funded startup that didn't die out) with the same hype and attention.
[0] https://twitter.com/BenedictEvans/status/972501945813381122
[2] https://www.newyorker.com/magazine/2014/12/15/blood-simpler
[3] https://www.bizjournals.com/sanjose/news/2017/03/24/rupert-m...
How many samples did they get before the lid got blew?
I think a few notable VCs actually spoke out critically of theranos, can't recall which, but it is saying something if a VC goes on record publicly criticizing a high profile starrtup
This scam was the reason for the board structure and the rather interesting way Theranos went about developing their “technology”.
They were stopped because DoD regulations state that medical products used by the military have to be cleared/approved by FDA (or in the process of a clinical trial). And Theranos was not on FDA’s “good” list at the time, having only sent one product through the clearance process out of the dozens they were selling.
Brushing this off as "East Coast" lets us avoid examining our complicity. And our vulnerability. We could look at uBeam, for example, which is backed by a number of West Coast luminaries, including Evans's own A16Z. An engineer has an extensive set of posts on how dubious it is: https://liesandstartuppr.blogspot.com/
Theranos is different in terms of scale and visibility, for sure. And I do agree that they found a richer class of sucker elsewhere. But I don't think they're culturally any different than a bunch of other overfunded, never-could-have-worked, charismatic-founder failures around here.
In some ways, the "let a thousand flowers bloom" effect that the Internet has on journalism has made this worse. The more options a PR person has for getting stories out, the less power any individual reporter has.
If she had written about her experience she would have had a very important story and could have saved investors hundreds of millions of dollars.
(Unless there were small time investors wrapped up in bigger funds who also should've done more research.)
She went in for a light piece humanizing a new technology. Do you really expect her to shift gears into a massive fraud, with nothing more than weird PR pressure and a fire alarm?
or... maybe she writes this story. says something to the effect of, "Hmm a bit WEIRD? What's Theranos hiding?" and then all the VCs and tech people start accusing her of having an agenda against Theranos.
without any hindsight, what is the story?
https://www.linkedin.com/search/results/people/?facetCurrent...
are all of these people going to be fired in the coming months or do investors think this is still a good idea but Holmes isnt going to be apart of it ?
No clue why employees are sticking around, maybe they’re currently looking for another job and it’s a slow drop to zero.
https://github.com/nemild/hacking-engineers
I added this example to it since it's a particularly good example of how marketing/PR uses threats of access and cherry picked demo sessions to get their favored view out.
(Contributions welcome)
I approached my project with the hope of creating antibodies that makes those techniques less valuable. Or at minimal, help a few people better understand the incentives/techniques behind what they're seeing.
EDIT: Just remembered the movie Wag the Dog the Wikipedia article calls the black hat PR people portrayed therein “spin doctors”. But that seems more like just PR to me, not setting off fire alarms to scare away reporters (though the spin doctors in the movie construct a fake war).
https://www.vox.com/policy-and-politics/2018/3/21/17141428/c...
Before the downfall, the website claimed that hundreds of tests could be performed with a single drop of blood. But, is that hundreds of tests on one single drop at once? Or is it one test per drop? Squeezing dozens of blood drops out of multiple pricks would not be easy or painless.
Nowhere on the website, or in any press releases, or in any interviews that I could find, did Theranos clarify this. If they could do 100+ tests on a single drop of whole blood it would be a revolution, and there would be no reason to hide it. But, if it was one 4-hour test per drop, that's actually worse than current state of the art, and they would have every reason to hide it.
This is one of the things that would have been clear if journalists had spent more time talking to lab experts, rather than Theranos' PR and laypeople in their offices.
A "fingerprick" was always going to be ferociously unstable.
It could have had value if taken repeatedly. I would be far more inclined to monitor myself if I had to only give a drop every 3-4 days. That way you could spot trends.
However, that was never going to produce a unicorn.
Putting aside the technology for a moment (it could be considered difficult to evaluate for most investors), due diligence failed on multiple counts. For example, Holmes told potential investors they had over $100 million in revenue when, in reality, they had close to $100,000 in revenue. That's a bit like trying to tell someone a SMB SaaS business with ~100 customers has the same traction as, say, Algolia. Hard to understand how this passed through the filters.
The reason I stopped myself is that I thought about all the journalists like this lady who played the same game with Theranos and continue to play similar games with all of the rotten corporate and government entities in the county. Then I started getting genuinely pissed off!
What. the. f*ck did I just read?
She openly admits to the following:
1. She came to the story with a predetermined framing of the story.
2. She allowed herself to be bribed with the “treat” of talking to Elizabeth Holmes and then backed off under threat and misdirection while pretending to be immune to such behavior.
3. She sat on the story because she couldn’t spin it the way she had intended in advance and allowed herself to be threatened.
I am not exaggerating, she literally writes “I lost the story so I moved on...”
Lost the story directly translates to: “I knew what I wanted to report and what would get clicks, I didn’t get that so I gave up.”
4. She proudly presents this article years after the fact pretending to retroactively have known something was wrong...and to have maintained her journalistic ethics while openly admitting to dropping the story once it didn’t fit the framing she hoped to apply to it.
5. She waited until well after the tide of public opinion had turned against Theranos to capitalize on the work of others who actually did the hard journalism to get clicks.
This lady should be fired, she is not a journalist. Why should we give her a pass when hundreds of other fake journalists did exactly the same with Theranos? When do we all say: “Enough is enough?”
This is everything wrong with American media in one article, the attempts to feign journalistic ethics after the fact while generating more clicks is sickening. People died from Theranos!
It doesn't seem like your link jibes with your dismissive comment, not in spirit, nor in a strict technical sense.
Does that make it right? No. But consider the journalists incentives. Also consider what happens if said journalist gets a reputation for publishing negative articles.
It's the same reason you hardly ever see articles bashing popular stocks or investments even though they are outright scams or wildly inflated (eg: bitcoin).
People say they want hard hitting tough news, but I actually think the reality shows this isn't the case.
Wat?
I agree with point 5 and 4, it's a bit of a bandwagon.
However the article doesn't contain the quote you mentioned in point 3. Also, the only reported death due to Theranos that I can find is the sad death of the Chief Science Officer who killed himself.
I disagree with the premise that she should be fired. Reporters pitch stories all the time with specific premises... I'm trying to imagine taking what she wrote and putting into any kind of coherent narrative. It's not the kind of thing that would have made an impact, I don't think.
She came to the story with an expectation of the story she was going to write - a consumer-focused story about the finger prick stuff. You say "predetermined framing", as if she's covering a political issue and is biased, but what you're actually talking about is just the normal process of "reporter comes up with an idea for a story, and goes out to see if they can get it done". This is no more problematic than, say, a reporter going to the zoo with the "predetermined framing" of writing a story on a Panda bear.
She wasn't 'bribed'. I don't see any supporting evidence for that whatsoever. Theranos PR tried to get her to back off by threatening to pull the interview with Holmes, but the reporter didn't agree to that, so it didn't happen.
She sat on the story not because she "couldn't spin it the way she had intended" but because the story she set out to write simply wasn't there. She couldn't write a consumer-focused story about "less is more" without finding patients actually getting the finger prick, and she couldn't find any patients getting the finger prick. What she did find was a bunch of suspicious behavior, but the suspicious behavior alone wasn't a story.
Yes, she could have decided to spend a while digging in the hopes of uncovering a different story altogether about Theranos. But I can't really fault her for not doing that. Maybe (without knowing anything about the journalist) that kind of investigative reporting isn't what she does? Maybe she knew that kind of story would take a ton of work, if it even went anywhere, and she didn't have the time to do it? Maybe she knew her editor wouldn't approve that kind of story? Or something else entirely. Most likely, she just had some suspicious stuff, but didn't have enough to sustain the belief that Theranos was actually engaged in widespread fraud, and so decided that it wasn't worth spending a bunch of time tracking down the likely-innocuous explanation, especially since a Theranos lawyer promised her that more than 50% of test were done with a finger prick.
In this case, management had wanted the Holmes interview. The journalist couldn't deliver that, but came back with the seed for a different story: is Theranos actually doing finger-prick tests? We don't know who decided not to pursue that story, but it seems reasonable to assume it wasn't the journalist.
Now you want the employee fired for that decision. It's totally unfair. If you want journalists to be free from employment constraints, you should be donating to individual freelancers so they'd have financial freedom.
100% agree. What she should have done was not cancel the feature, but write what actually happened--right after it happened, not now, when Theranos has already been outed as a fraud and she's just another one jumping on the bandwagon.
It all fits together quite nicely in hindsight when stuffed with a bunch of vague accusations and synthesis about motives, but I would have agreed with any editor axing the story at the time.
For the record, I assume her suspicions about people getting cagey, and maybe even the fire alarm, are quite right. But once again, hindsight.
"The actual services Theranos appears to be providing to patients does not match the services Theranos claims to provide in its PR statements." That seems like (a) useful information to other potential Theranos patients, and (b) exactly the sort of information that "investigative journalism" is supposed to be providing to the public.
The fact that the journalist didn't see any may well be cause to go back and try to find evidence, but a lack of evidence isn't a story in itself.
I'd point out, too, that if the journalist believed at the time that it was an outright lie, I seriously doubt that she would have dropped it - it's too big a story. More likely she had some misgivings which have been amplified in the wake of the recent news.
Yes--much, much less often than their PR led people to expect. Also, they were actually getting much less information from a single finger prick than their PR was claiming. That's why they were having to do full venipuncture blood draws for tests that their PR led many people to believe would only require a finger prick.
> The fact that the journalist didn't see any may well be cause to go back and try to find evidence
Which she didn't.
> if the journalist believed at the time that it was an outright lie, I seriously doubt that she would have dropped it - it's too big a story. More likely she had some misgivings
Which she should have followed up at the time, if she were really an investigative journalist.
I've read a couple of articles just today that don't seem to check out in some minor way. I can think of one widely-reported story off the top of my head that appears to be grossly misrepresentative of fact if not false. An investigative journalist probably has dozens. Choices need to be made.
The fact that this wasn't pursued for months strongly suggests that none of this evidence was nearly as compelling as it's now being painted.
I'm not sure I understand. "Choices need to be made" about what? About which grossly misrepresentative stories to actually publish? Or about which ones to check out first, as opposed to just publishing?
In short, what you're describing just looks like more symptoms of the same underlying disease.
Why do you imagine this is her choice? If you want to write a new feature to add voice control to an app, and your boss says no, we don't want that, do you go ahead and do it??
Quite likely it wasn't. But that just means there are two things wrong with journalism, not one. Not only does this journalist not show any sign of recognizing that the information she is providing now should have been provided much earlier, but, if your suspicion is correct, even if she had recognized it, her boss would have overruled her.
You essentially can't publish it if it a. Falls too far outside what the public will readily believe and b. Is not adequately backed up with verifiable hard facts.
Speculation that they intentionally pulled the fire alarm would have been considered mudslinging and yellow journalism at the time the research was done. It's print-worthy now because we now know that Theranos did so much dishonest crap that pulling the fire alarm is not unbelievable and is such small potatoes in the grand scheme of things that it isn't even mudslinging. It's a nit.
As you say, at that point, it would have just been mudslinging with no factual basis. In retrospect, an editor should possibly have put the resources into an investigative story--but who knows if the fact would actually have come out much earlier than they actually did. And there are lots of potential stories about things that smell wrong, some of which amount to something significant and many that don't--or at least stay under every radar.
Yes.
Sure, you're just describing another symptom of the same disease.
I mean, what was she supposed to have written. Obviously you want her to have written about Theranos being a fraud, but she didn't have that story. All she had was a fire alarm and an inability to find anyone getting finger prick tests.
She couldn't prove fraud. She just had a hunch that things were wrong. She had no leads on a fraud story, and she had to get articles out that her employer could actually publish.
You're asking too much here.
No, I want people who call themselves investigative journalists to actually investigate. That means following things up instead of dropping them just because they don't think (or their editor doesn't think) it will lead to a headline that's click-baity enough.
> She just had a hunch that things were wrong.
Which she did nothing at all to follow up. But that's exactly the sort of thing investigative journalists are supposed to follow up. That's their job.
Now I agree this story would have been great to come out earlier, but that isn't her decision.
You seriously have a childlike understanding of how journalism works.
How do you think developers work, they just write whatever they want to write, and someone will merge that code into a product?
In that it was a simple report on the patient experience, rather than being a deep investigative piece? That doesn't seem egregious or necessarily biased in a particular direction (it could either be a positive or negative experience), and there is some push back against Theranos guiding the piece ("wouldn’t I just rather get a finger prick myself and report on the experience, as so many other journalists had agreed to do? [/] I said no.")
> She allowed herself to be bribed with the “treat” of talking to Elizabeth Holmes
How? She rejects the initial condition that Theranos try to impose (not talking to other sources), and the condition in the threat was something the journalist had already indicated was necessary (talking to an actual patient getting the finger prick) nor did she change course at that point in order to secure the interview with Holmes.
> She sat on the story
What story? "I tried to do an interview but there was a fire alarm" -- that's basically all there is without significantly more digging, which she may not have the time/resources/connections/organisational support to undertake. Even if you publish the angle that not many people seemed to be getting the finger prick test, Theranos will just rebut it with the "significantly more than 50 percent of the tests are done with a finger prick" line and that the journalist did not see a representative sample.
> She waited until well after the tide of public opinion had turned against Theranos to capitalize on the work of others who actually did the hard journalism to get clicks.
I agree that it seems to be something of a bandwagon, and almost to get some credit after the fact, and that framing it as "I always knew something was wrong" paints the decisions made at the time in a poor light. However, given what was known at the time, I don't think any outrageous decisions were made, particularly as this was written with the benefit of hindsight so not as many red flags may have been raised at the time. I don't think it's reasonable to expect that journalists do a deep dive on every company they cover, especially when writing a relatively simple piece. Would there have been merit in publishing the piece? Certainly, especially given what we now know, but I can also see how you would conclude there is nothing important/interesting you can conclusively say based on those events.
However, she most certainly is deserving of jail time; may Shkreli's precedent of $~19 million fraud and 7 years pave the way for Holmes. All ratios equal, the sentence should be ~270 years, naturally.
Unfortunately, because she is well connected to the VC folks, the $750 million and Ian Gibbons life will all go without retribution.