Theranos CEO Says 'I Don't Know' 600+ Times in Deposition
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> 'They can try to convince me that you're wrong and in this case I do believe you’re wrong,'
Then he tricks his grandson into coming over to chat, and oh by the way there's two lawyers from the company sitting in the next room with NDA paperwork for you to sign.
Later, he manages to weasel out of ever saying "I was wrong".
> "Tyler’s handling of the troubling practices he identified at Theranos is an example. He did not shrink from what he saw as his responsibility to the truth and patient safety, even when he felt personally threatened and believed that I had placed allegiance to the company over allegiance to higher values and our family."
He didn't believe it, you jackass, he witnessed it. Your retroactive history lessons wherein you are actually the hero in all of this is astounding. I can only hope Tyler Shultz has learned to stay the hell away from his grandfather.
This is a good lesson for how big decisions in politics and business are made. Leaders are very prone to being conned by charismatic people and often don't check the facts.
That guy stuck to his guns and faced a hell of a toll for it. He had his life destroyed. He knew that was going to happen. He went ahead anyway.
Why? Because it was the right thing to do. Tyler saved countless lives, real actual people's lives; Elizabeth and Sunny's greed and hubris undoubtedly would have killed many people, no question.
Tyler Shultz is a hero.
Never let anyone tell you that you don't matter. Do the right thing.
Be like Tyler.
However, at the same time apparently Larry Ellison was advising her. During the early phase of Oracle's history one of their chief criticisms is over-promising on timelines to keep existing customers on their product so that they assumed something was going to ship in 90 days only to ship 1.5 years later.
However, Theranos took this to the edge and just flat out lied about products that they didn't have.
They were promising revolutionary breakthoughs not evolutionary.
Interesting, considering Steve Jobs acknowledged Ellison as his best friend after his return to Apple, at a time when Oracle was considered the 2nd largest software company in the world. It makes sense that she would turn to Ellison for advice all in the name of trying to be like her idol, Steve Jobs.
Holmes underestimated the amount of technical risk she needed to overcome to succeed in the marketplace, as did the Google founders when Larry Page initially came up with PageRank but had no clue just how long it would take to download the entire web to disk. But the Google guys unlike Holmes had a lot of help from their advisors combined with Stanford university resources, which allowed them to stay immune to investor pressure to show results for invested capital.
For a technology like finger-prick based tests to succeed, you’ll need to expend millions of USD in a university research lab before you begin to see promising results that are repeatable. Essentially, Theranos should have started out as a science project (like BackRub which birthed Google) and not as a startup. She picked the wrong vehicle for her mission.
Ellison on the other hand piggy-backed on a seminal 1970 paper by IBM researcher: E.F. Codd to launch Oracle [0]. In those days, hierarchical and network databases were the competing database paradigms. Codd’s paper introduced the relational model as the third competing paradigm which turned out to be vastly simpler than the other models. The simplicity afforded by RDBMSes unlocked a lot of value and ultimately created wealth for the database industry.
0: https://www.ibm.com/ibm/history/exhibits/builders/builders_c...
Investors: by the Walton family ($150 million), Rupert Murdoch ($121 million), Betsy DeVos ($100 million), the Cox family (of Cox Media Group) ($100 million), and Robert Kraft (of the New England Patriots).
You would figure there was no faking these people out. How do you dupe former Secretary of States and Generals whom are supposed to be some of the most stringent, dotting all the i's and crossing all the t's. It's just an amazing story of how personality can change everything and cause people to have massive blindspots.
Also if I recall, there was a lack of medical knowledge on the board as well which surely contributed to the failures in oversight.
> In the email, Balwani wrote in part: "...The reckless comment... based on absolute ignorance is so insulting to me that had any other person made these statements, we would have held them accountable in the strongest way. The only reason I have taken so much time away from work to address this personally is because you are Mr. Shultz’s grandson ... the only email on this topic I want to see from you going forward is an apology."
I hope to have my belief in karma bolstered by the results of the criminal charges against Balwani. So often I've found at some point down the line this kind of stuff catches up with people (if not criminally or financially, at least in happiness).
There was a great story in the book about how the engineers would mess with Balwani by repeating a random technical word that didn't make sense in context, to see if he would start parroting it in his conversations. Which of course he started doing, more than once. He was a fraud who knew nothing about technology but thought he could manage an advanced technology project (which is not too uncommon in silicon valley - but he did it to fraudulent levels and like a dictator).
My intuition points to Elizabeth starting the snowball in motion - once she over-promised, built a huge personal image, was in over her head - before it turned into an avalanche from the work of Balwani. The person who had a history of getting rich flipping useless companies with no value during the dot-com boom. I hope he gets punished as much or more than Elizabeth.
And if I had to choose I'd 100x rather have worked for Elizabeth than Balwani.
I'd love to see examples of this idea being promoted here.
I personally remember Theranos being attacked on HN first for being full of shit, well before it became popular in the press. Not to mention the ~2yrs where 'lean' stuff that was endless parroted here which is all about not faking it but actually talking to customers.
I also highly doubt any YC type company would fit that criteria either.
Maybe you see that stuff on Reddit but HN is full of some of the most skeptical and critical people when it comes to reviewing startups.
The problem is what to do when you personally don't know the viability of your own idea and have to take advice while not having access to the same knowledge. If you stripped off the specifics, in every other context, HNers would by-and-large repeat the tropes about "oh yeah, you feel like you don't know what you're doing, but so does everyone else! It doesn't matter!"
Obviously, you can come after the fact and say "See, now that the idea failed and I expressed skepticism before, I obviously don't mean the fake-it-till-you-make-it crap for that startup, just the good ones." That's not impressive.
What matters is whether you know whether self-confidence is justified being the person in that situation.
I think this subscribes to the more-frequent meme of assuming people apply their mindset on some types of tech business to all types of tech business.
For every Theranos where the phony is outed, there are hundreds of other companies where their “Balwani” is raking in millions in deferred comp and faking his way through to more and more power, seats on other companies’ boards and a lavish retirement. And nobody calls them out!
I've had more than one sadly.
Say what you want about Mark Zuckerberg but his idea of hiring engineers to fill every role, not just development but project/product management and other leading positions, is spot on.
> "I think it was about $20 million." Holmes recalled to the SEC in a never-before-aired deposition obtained by "Nightline."
> there was another detail revealed that Holmes had been less forthcoming about: She admitted that she and Balwani had been living together and had engaged in a romantic relationship. It was something she admitted under oath but had kept from investors.
If convicted, justice would be had but would it send a negative message to entrepreneurs?
If acquitted, might it reinforce the "break things and move fast even if it harms people mentality"?
I would consider a message that entrepreneurs are not above the law to be a positive message.
Additionally, someplace out there is somebody with an idea that could allow the single blood drop idea to actually work. That idea is going to get buried because after Theranos, nobody is going to want to risk getting involved with Theranos 2.0.
A conviction is the best possible thing for entrepreneurs who actually help society and is only a negative thing to entrepreneurs who want to get rich by stealing from others.
It might send a cautionary message, but cautionary messages aren't inherently negative.
edit: As someone coming into tech from physical science, I have never seen the Dunning-Krueger effect anywhere like I do in tech. It's mainly in the management, but folks do have a very serious problem accepting expertise from scientists or engineers outside of tech industry.
It seems that she is very, very wise ..
For example, if there's an email with Holmes talking about how she's about to lie by saying "I don't know" on the following issues that she totally knows about, then if that's discovered, she's going to get charged.
However, that probably doesn't exist, so it's unlikely to otherwise prove that she really does remember.
(Not a lawyer)
It is perjury, but often a particularly hard (though not impossible, as legal proof is not the same as logical proof) to prove form of it.
[1]: https://www.businessinsider.com/theranos-founder-elizabeth-h...
But they don't know who the email was sent to to implement the decision. Or they don't know the law firm depositing it. Or they only generally know the numbers involved, and have since destroyed the exact numbers (email and any paper copies). This is done explicitly so they can truthfully answer "I don't know" to nearly every question.
Given how governments are going after companies, and how politicized everything, including testimonies at the police, have become, I can't say I blame them. Even if an answer is true, and not criminal, but somehow controversial, it will end up in the media. I can't say I blame them. We need to get back to the situation that it just doesn't happen that any statement leaks from investigations, at the very least unless the person is found guilty, and even then, only if strictly relevant to the crime.
For example the many times ceo's have been called to "testify" on tax minimization strategies, knowing full well the IRS (controlled and of course authorized by the government) has come to an agreement about those taxes, and that agreement has passed through the hands of elected politicians. The only purpose is to demonize these people without admitting that the government created half the controversies.
What leads you to believe this? You mention a specific time period as if there is some event that caused it to be the case, but I'm not sure what that event would be, nor have I seen this in action in my career.