The 30-year-old health sector billionaire
bbc.com
bbc.com
You have a brilliant founder who has a background in the tech (Chem Engineering) and the upbringing and connections to take research trips out to Singapore.
Second, you have the tech: microfluidic assays, and the idea of collecting them all in the same place.
Third, an existing industry that's been content to sit around and charge high prices due to low competition: LabCorp & company.
Finally, a generous funding environment.
Unfortunately, their secrecy is kind of a turn off. How can I know to trust their numbers?
To me it sounds like you'd love to have some sort of "political leanings filter" on people who do business. If their politics agrees with yours, great, if not, we need to make sure those people don't get into positions of power.
Hilariously I'm the exact opposite of what your false conclusion proclaims.
I'm neither liberal nor conservative - in fact I'm anti partisan - and I'm a laissez-faire Capitalist. I'd prefer the government be completely outlawed from creating economic regulations, and I believe in the separation of state and economy for the exact same reason state and church is separate: they infect each other. That instantly wipes out all lobbying for special treatment, special laws, and competition-by-government. The government returns to doing what it's only job should be: protection of individual rights.
The US is becoming a fascist oligarchy, dominated by a massive consolidation of select few winners that are then protected by the government from competition; this has occurred in nearly every segment of the economy.
The FDA rarely does anything that isn't shady. It is fully dominated by the mega-corps that can afford to buy political influence, from Pfizer to Merck to Gilead.
You only get stability with negative feedback. Capitalism is all about positive feedback, and leads inevitably to systems that conglomerate, stagnate, distort, and eventually either implode or blow up.
Where do you think the negative feedback to prevent that is supposed to come from?
And please don't say 'markets' because there is no evidence that I know of that markets have ever done any such thing, or even that a market economy is capable of it.
Edit: I assume we're all big fans of Henry Kissinger over here then? I fail to see what his interest in this could be outside of the potential eugenic applications.
I understand the arguments of the eugenicists - that there are excess mouths - that "most" people are "useless" - but I do not agree that depopulation is the solution - rather, sustainable growth or steady-state maintenance through education and decreased societal need for redundant offspring.
As the idea of just marching in and shooting people is abhorrent and would undoubtedly be undermined by ethical concerns, would the gentle profiling based on blood and genes of a population, and the "oh, sorry, you can't have that job/child" that this type of technology will bring about not be a "nice", subtle way of steering the population curve in a "desirable" direction?
Hence, I believe this is Kissinger's principal interest in this.
Edit: to be absolutely clear, I am NOT saying that there is some variety of conspiracy here. I am, however, saying that Kissinger understands what I understand - which is that any tool or technology will ultimately be used in ways which aren't immediately anticipated or obvious, and that the very availability of this variety of tech will almost certainly lead to profiling based on the contents of ones blood. If it can be done, if it can happen, it will be done, it will happen. It's just a question of when.
Serving on a board doesn't have to be a big job, especially if the company is interested in having you on the board to get access to your connections and influence.
He might also be getting eugenic jollies from it.
(To be clear, I think this is a more cynical story; buying influence is a lot more likely than an aging eugenicist having the awareness and position to get himself on board with a biotech company that might create vastly better predictive medicine.)
Just another one of the many poorly-thought-out policies he pursued during his presidency.
However, George Bush was one of the best presidents ever for Africa: http://news.bbc.co.uk/1/hi/world/africa/7831460.stm
Which is utterly misguided if the motivation behind the goal is to conserve energy and resources. The population growth rate of first world countries is lower, however we consume far more resources per child than third world countries do. Calling for those countries to make drastic changes without examining and curtailing our own overuse of resources is problematic and irresponsible. Al Bartlett[1] addresses this in his engaging lecture[2] on population and energy.
If the primary motivation is instead humanitarian, e.g. to raise the quality of life, then I am not knowledgeable enough to comment on it.
[1]http://en.wikipedia.org/wiki/Albert_Allen_Bartlett
[2]https://www.youtube.com/watch?v=DZCm2QQZVYk (The video's title is hyperbole and is not the title of the lecture, though the lesson is certainly important.)
The NHS is much better every 6 weeks I go in and get about 6 or so tests done plus my quarterly's god only knows what that would cost me in the USA
And some of them are just crazy nuts who actually prefer that companies soak the government (tax-payer) for every cent they can.
Ignore the comparisons with Steve Jobs and other crap and think about what her company is doing and what it means.
INVALID. You are not eligible for this product/job/life.
I will be interested to see how long it takes before a serious "the emperor has no clothes" article will come out in a mass media outlet, and someone who actually runs a lab or knows any of the rules of running labs is asked even one question. It is much less sexy of a story when told that way, so maybe never.
And I think people who work that much are more likely to make mistakes.
Meanwhile, if I suspect that, for example, that my BMI veers into the obesity range when my TSH is high, it should be perfectly fine for me to try and get a $50 test to examine if there's a correlation. Better than spending that on a DVD of Keeping Up With the Kardashians, don't you think? Might even increase awareness about general health in the US.
LabCorp made (income) $600 million last year. Quest made $1.5 billion.
They can afford teams of very capable developers. They can have the best software, the best presentation, slick mobile apps, speedy information systems.
They don't not because they can't afford it, but because they don't want to afford it. As is the case with many of these companies that get disrupted by tech startups, they see it as a cost center and minimize it.
Software rules the world. Any business that doesn't adapt to this will see strange little upstarts steal all of their thunder.
Regarding your point on Bayes Theorem, that's valid in some ways and invalid in some ways. Suppose someone gets a vitamin D test back at 8 ng/mL. There's not really a chance of a false positive. He's deficient and needs supplementation. Making the test cheaper, faster, and more accessible can really only improve the health of the population. It will likely also drive down the cost of healthcare overall, because vitamin D deficiency has all sorts of unpleasant effects.
Furthermore, the literature suggests that the vast majority of doctors do not understand Bayes Theorem. Source: http://yudkowsky.net/rational/bayes
There is maybe some marginal streamlining or process improvement possible, but you can already get blood drawn and a little while later have the results accessible on a mobile device. Sure, maybe the blood can be processed faster and those results should be available sooner and available to outside parties so you can use various apps and services; but that a policy and political problem, not really a technology challenge.
This company is just another one of those paper tiger companies... or maybe paper unicorn is a better metaphor ... who make something that is wholly unnecessary and the only thing they are good at is manufacturing buzz. Their technology solution seems to be an unnecessarily complex solution to a simple problem. We don't need to "know what your body is doing so you can live a healthier life", we just need to eat better and exercise far more. It's that focus on symptoms rather than causes that annoys the heck out of me. But I guess they have learned from the perpetual dependency model. You don't get to be a paper billionaire by telling people to stop being unhealthy, you become a paper billionaire by selling unnecessary stuff.
The FDA question is still really vital, of course.
The only thing interesting here is the amount of founding she has however the comparison with other start-ups and Steve Jobs is a very obvious marketing plot.
Holmes is really smart for connecting with the right people early. Every account I've read of the woman is that she is incredibly smart and a relentlessly hard worker. Chances are she was able to impress a number of powerful people who backed her early, and she has been able to build a functional company (no small feat in itself) that is attempting to disrupt the medical testing industry.
A large part of successful disruption in heavily regulated industries is building a popular brand. Uber and Square are perfect examples of this: regulatory agencies are willing to bend over backwards to accommodate them in ways that they have never done. A large part of this is their popularity. I'm guessing that's why we're hearing so much about Theranos -- this is an industry that's largely hidden from the public eye, and she feels the best chance to disrupt the industry is if it's brought into the spotlight with Theranos at the forefront.
It could all be marketing fluff, but it's likely to be effective.
Theranos' technology is likely not going to blow my mind but I have to give them a lot of credit for incredible PR and (depending on how good the product actually ends up being) execution.
This is a very good point. My guess would be that we're seeing -- in this article, and in the Fortune profile linked on HN a few months ago -- the results of an incredibly well orchestrated and tightly controlled PR strategy. Say what you will about Elizabeth Holmes, but she is no dummy. She knows exactly what she is doing. The comparisons to Steve Jobs that seem to pop up in all of these articles are no accident. They feel intentionally cultivated, and perhaps to some degree, they're warranted. [1] Jobs also had a knack for image-making, be it in the tight control he exercised over the flow of information inside and outside his company, and in the image he ensured that the media portray.
Does the emperor wear no clothes here? I have no idea. I know next to nothing about the inner workings of the company, or about the medtech world (though I do find it fascinating). I do know that marketing matters a great deal, and traditional biotech and medtech companies don't seem to care too much about consumer image. They rely on time-tested sales channels and retail strategies. Theranos is different in the respect that it's running an Apple-esque marketing and PR playbook in an industry that traditionally does not.
"what these people are doing for lab testing, in terms of technology, sounds totally revolutionary IF YOU DON'T KNOW ANYTHING ABOUT CLINICAL LABS."
Yes, and I think Theranos/Holmes are well aware of that fact. If anything, they see it as an opportunity to seize a beachhead in consumer consciousness. The thinking process seems to be: most consumers know virtually nothing about how this all works, ergo, we can appear as gods before them. That is a speculative and perhaps cynical read, but at the same time, I admire their savvy. I admire it a great deal.
[1] Preemptive note: I am saying "to some" degree here. :) I'm not saying she is Steve Jobs, or that the comparison need extend any further, to any other dimensions, than in the specific area I'm talking about in this case. But I think you can make the case that someone who always appears in black turtlenecks, and has a way of invoking the name "Steve Jobs" in almost every major article about her, is intentionally aiming for the comparison. Which is exactly what Steve Jobs himself would have done, in a manner of speaking. (Cf., his intentional evocations of Edison, Ford, Picasso, etc.)
She's literally dressing like him for her self-promotional photos, in a way that was specifically mocked in HBO's "Silicon Valley" series recently.
I'd say it matters a great deal. Theranos has assembled a board with very strong ties to the government and, presumably, with an eye toward overcoming -- prophylactically or reactively -- any regulatory challenges that may arise. So, with the regulatory "defensive line" in place, so to speak, Theranos is free to focus on image, consumer marketing, and a steadily growing media blitz.
I would presume that its strategies right now include business development and channel alliances. As such, growing its mindshare and establishing itself as a breakthrough company -- and courting emotional comparisons to Apple -- will help with those goals. They will help by establishing awareness among partners, and indirectly, they'll help by fueling consumer demand. That's a time-tested channel marketing strategy. Companies as diverse as Apple, Nike, and Procter & Gamble are very good at running that playbook. Theranos is in a very differently industry, with a very different rulebook, and very different competitors. And it remains to be seen to what degree these efforts will matter. But they're not wasted efforts.
One thing that is good here is pricing transparency and legislation is moving now in states requiring that lab results have to be delivered from the lab directly to the patient if the patient requests it (New York recently did this). BUT that does not mean you can draw your own blood. You still need to have your blood drawn in the traditional way and sent out to a reference lab. So while direct to patient testing will certainly pan out, I do not see how this hot start up has any advantage over the many very large reference labs out there. With competition over HMO contracts for testing so fierce, testing margins have gone down a lot.
Currently Quest Diagnostics has a market cap of 8.4 billion, and is the largest reference lab in the USA. Valuation of 9.5 billion for a company with no specifics, no actual product and huge risks is absolutely ridiculous.
If on the other hand her technology is radically cheaper than the hospitals own lab then it would rapidly achieve huge market share and help cut healthcare costs. Just yesterday I had 2 sets of coags on the same patient sent back necessitating retaking (not an easy job on an elderly severely demented woman), one because it had clotted (apparently) and another because there was not enough blood. Smaller volumes required would be great for a whole bunch of situations.
People want to take their health into their own hands and not have to have every test blessed by a $150 doctor visit plus a separate lab visit.
Conditions to test for:
Hemachromatosis Many other genetic conditions Vitamin deficiencies (D, B, potassium) Blood sugar for people prone to diabetes Lyme disease (test after every tick bite after waiting the required time period)
And that's just off the top of my head.
Many of those are tests I'd like to a few times a year, but don't want to schedule a doctor appointment, take off work, make a copay, schedule a lab test, take more time off, another copay, etc.
Similar kinds of information about day-to-day blood chemistry might be available through retail-available blood testing. This is QS all over again, but with a significantly more powerful bite—blood chemistry is a quantitatively powerful look into your body's current state. It's a human debugger.
If ExpectedValue[Unnecessary Test] < Cost of doctor prescribing tests, this is a win.
As it is, for my predictable appointments this is exactly what I do.
It's extremely rare for such a young founder to still be in control of the company, and to own 50% after more than a decade. That's not only a huge accomplishment, it's a testament to the strength of Holmes' conviction in the company's mission.
Getting rich all comes down to ownership—every single percentage point counts.
She could have cashed out a long time ago and been very rich. The reason her ownership is important isn't the substantially inflated valuation and digits on her net-worth, it's the control it enables to steer such a young company long-term.
Getting rich doesn't come down to counting every single percentage, it comes down to creating a lot of value. If you do that, whether you own 14% or 40%, you're going to be rich.
Comparing the valuation of a growing startup with a stagnant incumbent is always going to look strange if you only consider a snapshot of financial numbers.
I think Theranos is overvalued by a factor of ten fold.
The market eventually forces a sane valuation on companies based on revenue and earnings. It's extraordinarily unlikely a company charging vastly less for its products will produce a dramatically greater economic outcome than Labcorp which dominates the industry (Labcorp has the best of both worlds, high prices, and high market share, the only thing they could improve is volume).
Theranos investors have had all their future returns pulled forward. Even in a wildly successful outcome, Theranos is unlikely to be worth much more than 2x what they already are, 20 years from now. That assumes they can one day grow to have ten billion in sales and a billion in profit, based on much lower prices and higher volume. That day is so far off, there's zero chance of Theranos sustaining their crazy valuation between here and there as capital markets turn negative after this hyper bull market run.
http://www.washingtonpost.com/news/to-your-health/wp/2014/08...