
Under Fire, Theranos CEO Stifled Bad News - arcanus
http://www.wsj.com/amp/articles/under-fire-theranos-ceo-stifled-bad-news-1468195377
======
joelS
"She has also been talking with Jason Blum, ... about a potential documentary
that would chronicle her life and career"

This is her priority right now?? For a while it has been clear she is more
interested in self aggrandizement than ensuring her technology actually works.

~~~
w1ntermute
> Ms. Holmes maintains a heavy security detail. Men with earpieces escort her
> wherever she goes outside the Palo Alto headquarters. Their code name for
> her is “Eagle 1,” current and former employees say. Mr. Balwani, until he
> retired, was “Eagle 2,” they say.

You cannot make this shit up. How full of herself can she possibly get? The
Adam McKay movie is going to be particularly fantastic if there are more
examples like this.

~~~
brandon272
How common is security detail for CEOs of billion dollar corporations to begin
with? It seems to be fairly random.

Steve Jobs drove himself to work. According to Fortune, in 2013 HP spent $1700
on security for Meg Whitman and Amazon spent $1.6M on Jeff Bezos [1]. It's
really all over the map. And presumably the costs go up if the company is
exposed in scandal and investors are unhappy with the CEO or they begin to
receive threats.

[1] [http://fortune.com/2015/01/07/ceo-security-jeff-
bezos/](http://fortune.com/2015/01/07/ceo-security-jeff-bezos/)

~~~
sargun
Zuckerberg maintains a pretty heavy security detail. So does Sandberg from my
understanding.

~~~
personjerry
Source?

~~~
uptown
Pretty much any photo when Zuckerberg is out in public.

------
tuna-piano
This constant stream of Theranos might be viewed by some on the surface as
beating a dead horse... but every article is new news of their shenanigans.
And the most important bit - it seems like nothing has changed. It seems like
they are continuing on the same path, as it seems like Elizabeth Holmes is
completely out of touch with reality.

Obviously this saga has thus far been negative for many of those involved -
but I'm selfishly enjoying following the story. I'm curious to see how this
ends. Theranos has hired some very good attorneys and I assume Walgreens and
the consumer class actions will be interesting cases.

One question: If Theranos needs to protect itself from a criminal / civil SEC
investigation, do the Theranos executives get to use investor funds to defend
themselves? If so, who does that help?

~~~
GavinMcG
I would assume it can use investor funds. Presumably, if a defense is a
rational choice compared to a settlement, the use of investor funds helps
avoid the loss of even more investor funds.

~~~
tuna-piano
I'm referring to the open criminal investigations against Theranos:
[http://www.bloomberg.com/news/articles/2016-04-18/theranos-i...](http://www.bloomberg.com/news/articles/2016-04-18/theranos-
is-under-investigation-by-sec-u-s-attorney-s-office)

Is this investor money being used to defend against a suit about defrauding
investors?

~~~
otl1248
Companies frequently defend themselves against shareholder lawsuits, and
naturally that money would otherwise provide value for the shareholders. Also,
if the SEC fines them the (current) investors will basically be punished!

~~~
marcoperaza
Oh fascinating, I hadn't thought about this before. So if the plaintiffs win a
shareholder lawsuit, they're winning money at the expense of all of the other
shareholders? And what about a class-action by all of the shareholders (is
that even possible)? That'd just be the shareholders suing themselves? I guess
that'd just be a forced liquidation/dividend in effect, right?

------
joshdickson
My favorite anecdote from this excellent piece, where Ms. Holmes is supposed
to be presenting a slide deck of clinical results proving the effectiveness of
Theranos' technology to employees, is re: NASA.

> Ms. Holmes has told employees that she plans on rehearsing her AACC
> presentation with them several times before the conference. When asked by an
> employee if the June presentation was the first of these rehearsals, she
> said no.

> Since most of the data from the new studies wasn’t in yet, the preliminary
> slide deck she showed focused instead on a timeline of the company’s 13-year
> history, according to the attendee.

> As employees listened in silence, she showed slides about the several
> generations of blood-reading devices Theranos has developed and past
> partnerships it has had with pharmaceutical companies, the person said.

> One slide featured the NASA logo, which struck some employees as odd because
> no relationship they knew of had developed following a demonstration
> Theranos had made of its device to representatives of the National
> Aeronautics and Space Administration several years ago. A spokesman for NASA
> said he didn’t know what relationship, if any, the agency has with Theranos.

~~~
rasz_pl
They did a presentation = there probably was letter of intend = cooperation,
boom logo lands on the website. This is standard trick of scams promising
product real soon

------
a_small_island
>"In addition to making frequent media and conference appearances, she hired
Academy Award-winning director Errol Morris to film videos of herself and
others for Theranos’s website."

I had to look this up:

[https://www.theranos.com/news/videos](https://www.theranos.com/news/videos)

[https://www.youtube.com/watch?v=k2ZlOSdKjqY](https://www.youtube.com/watch?v=k2ZlOSdKjqY)

~~~
cpeterso
Looks like Morris used his "Secret Weapon for Unsettling Interviews: _The
Interrotron_ ":

[http://www.fastcodesign.com/1663105/errol-morriss-secret-
wea...](http://www.fastcodesign.com/1663105/errol-morriss-secret-weapon-for-
unsettling-interviews-the-interrotron)

~~~
trgn
the Fog of War was great. What struck me the most was that the interviewer
seemed to be shouting across the room. McNamara didn't seem all that bothered
either. Also, none of those sycophantic reaction shots of the interviewer
benignly nodding, or incredulously furrowing their brow. I wish more
journalists would use this system (I didn't know it had a name, thanks for the
link).

------
blakeross
My semi-annual plug for the parody television show I wrote about Theranos last
year:

[http://www.pricks.com](http://www.pricks.com)

~~~
neotek
I really would give anything to see this show become a reality. You're a
fantastic writer, your stuff on Medium is superb. If there was a way to invest
in a pilot I would hand over as much as I could.

------
marcoperaza
I'd like to thank the Wall Street Journal for this saga that has filled my
heart with ever-lasting schadenfreude. And it keeps getting better!

> _Ms. Holmes maintains a heavy security detail. Men with earpieces escort her
> wherever she goes outside the Palo Alto headquarters. Their code name for
> her is “Eagle 1,” current and former employees say._

I'd also like to point out that the WSJ is being quite honorable here in going
after Theranos so hard. A ton of the board members are from the Hoover
Institution, which has close ties with the Journal. They're making a lot of
their own people look bad. And it honestly is pitiful that they sat on this
board of a company that they clearly knew absolutely nothing about, beyond Ms.
Holme's deceptive pitches.

------
yitchelle
Serious question - with so much bad press about the way their company is doing
things (mostly unethical), why haven't their work force collapsed? I would
imagine most of their engineers, scientist etc would be leaving the company
every day.

~~~
dragonwriter
Because workers have bills to pay?

~~~
taternuts
Sure, but the real talent at the company surely wouldn't have much trouble
finding work somewhere else, especially given the amount of stories out there
saying that they've been kept in the dark the whole time. The question is why
would these people stay on this sinking ship

~~~
gedrap
It's hard to say without at least having knowledge of the industry as it's
naive to expect that it's the same job market as with the programmers.

While it all looks ridiculous from the outside (and media makes it easy to see
Theranos as a bunch of idiots), maybe some smart people inside think that they
still can pull it off? That maybe the odds of success are large enough, even
still low in absolute terms, to take the risk to hit the jackpot?

Or maybe simply it's not that easy to find a new job in such a niche area.

------
55555
> On July 1, Democratic members of the House Energy and Commerce Committee
> called on Theranos to explain how its “policies permitted systematic
> violations of federal law” and how it is “working with regulators to address
> these failures.”

How come when I systematically violate federal law regulators seem less
willing to work with me to address these failures? Companies are not that big
and mystifying. They are just made up of people and should be held
accountable. Elizabeth committed felonies and some people almost certainly
died as a result.

~~~
trhway
>Companies are not that big and mystifying. They are just made up of people
and should be held accountable. Elizabeth committed felonies and some people
almost certainly died as a result.

Sending people to prison for crimes they commit while being executives -
imagine prison overcrowding if US do the same as Iceland - the country of 300K
sent 29 bankers to prison as result of 2008 crisis. US is 1000 times bigger.

~~~
braythwayt
Prisons are a for-profit industry, and filling prisons with people gets votes.
There is absolutely no way that the DOJ is thinking, “I’d like to send these
people to jail, but alas, there are aren’t enough jail cells.”

The sad answer is simply that prisons are a kind of security theatre. For that
theatre to work, you have to appear to be imprisoning people that voters
emotionally identify as threats,

Locking up street criminals, people of colour, and so forth fits in a world
where the media and ruling politicians demonize them at every turn.

Locking up business executives doesn’t.

~~~
gmarx
Yes, security theater...except coincidentally as we in the US massively ramped
up our rate of imprisonment. our crime rate went drastically down. For those
who don't remember the 70s and 80s it is understandable to wonder why so many
people are in jail when there is so little crime. Oddly, removing criminals
from society lowers crime in society

~~~
braythwayt
I do remember the 70s and 80s, and I also bothered to take enough of an
interest in criminal justice to know that crime subsequently decreased in both
the US and in Canada, without the rampant increase in incarceration in Canada,
or anywhere else.

Oddly, repeating the sound-bites issued by "law and order" politicians does
not magically persuade those of us who live outside of the conservative talk
radio bubble.

~~~
gmarx
See, I was going to respond to your good point in a thoughtful manner, except
you had to follow up with a personal attack. This is why people with different
political views can't have reasoned discussion.

~~~
sitkack
You will never be as funny as Groucho.

------
return0
OK, i get that the CEO was an inexperienced kid (at best), or a deluded
megalomaniac-egomaniac person who couldn't even finish college , yet thought
that by following the 10000 hour rule and wearing turtlenecks will turn her to
the next Napoleon bonaparte (at worst).

What about the other employees/investors/board members? Are they hiding, or
prefer to kill the sacrificial lamb instead?

~~~
SilasX
Yeah, I wonder _where_ someone would ever get the idea...

\- that an entire industry has been doing it wrong

\- that it can be fixed by a low-bureaucracy, Angel-funded startup

\- that once you have enough success you can just rewrite the laws that were
slowing you down

\- that no one knows what they're doing anyway, major projects are 100%
guesswork, and you should just "fake it till you make it"

\- that any skill is just a matter of 10,000 hours of practice

\- that you can outsmart an industry before even passing or placing out of
sophomore level classes

\- that any self-doubt must be Impostor Syndrome, and so it's not worth your
time to even check if that doubt has a factual basis

Well, I mean, of course, _besides_ the HN comment section.

------
yeukhon
To escape paywall:

1\. Google the title

2\. Select the result directly from Google News

3\. Right click on the article link, copies the link, put it in the browser.
In the end, the link looks like this:

[http://news.google.be/news/url?sr=1&sa=t&ct2=us%2F0_0_s_0_0_...](http://news.google.be/news/url?sr=1&sa=t&ct2=us%2F0_0_s_0_0_i&usg=AFQjCNHik6tBeK0BnRXDTECzudeIKqVtBg&did=c6601fd2233d4a6e&cid=52779154246740&ei=ThCDV6CQBceM3QH4s4_oAQ&rt=STORY&vm=STANDARD&url=http%3A%2F%2Fwww.wsj.com%2Farticles%2Funder-
fire-theranos-ceo-stifled-bad-news-1468195377)

and if you really can't see it:

[https://bpaste.net/raw/0865ee15318e](https://bpaste.net/raw/0865ee15318e)

~~~
niccaluim
The "web" link does (1) for you.

~~~
yeukhon
It didn't show up (no cache, no web link for me)

------
AndrewKemendo
So I'm curious. Should the people who took CS183C (Blitzscaling with Reid
Hoffman) discount the entire Holmes lecture?

[1]
[https://www.youtube.com/watch?v=juhATwufdbc](https://www.youtube.com/watch?v=juhATwufdbc)

~~~
jacquesm
Only if your tech doesn't work.

------
danpalmer
Every article about Theranos seems to end in criticism of Holmes, but if the
apparent situation is true – that the technology just doesn't really work – it
seems her actions are pretty much to be expected. Most of what she has done
would be to buy more time to try and figure out the technology (which makes
sense), and to try to save some face, which is understandable.

~~~
chmaynard
Theranos needs to show the scientific community that blood oozing from an open
wound (a finger prick), contaminated by tissues and surface bacteria, is
clinically comparable to blood extracted directly from a vein. They also need
to prove that analyzing a diluted, contaminated blood sample with the Siemens
instrument produces an accurate result.

Perhaps Theranos hasn't published any research on the scientific foundations
of their technology because they have nothing of value to show us.

------
mmmBacon
> _We accept full responsibility for the issues at our laboratory in Newark,
> California, and have already worked to undertake comprehensive remedial
> actions,” including, it added, shutting down that lab, adding new medical
> experts and lab staff_

I wonder what kind of medical expert would risk their reputation to go work
for Theranos at this point? From where I sit there's no amount they could pay
me that would be worth risking my professional reputation.

~~~
jsprogrammer
If you could go in and discredit various methods, it seems like you would
garner a higher reputation?

~~~
chris11
I'm sure their employees have signed NDAs.

------
meowface
Is there any chance Theranos could possibly recover from all this? I'm kind of
surprised they're still even operating.

Maybe replace the CEO or something. The core idea of the technology still
seems like a good one. It just needs rigorous testing and consent.

~~~
dragonwriter
> Maybe replace the CEO or something.

Holmes is, as I understand, not only CEO but also the majority shareholder
_and_ holds a class of stock with disproportional voting rights on top of
that; so, but for a few layers of legal fiction, Theranos _is_ Holmes.

~~~
hellomoto998
That is awesome.

------
exit
so, people still willingly work at this company, still show up for this show
40 hours a week?

can we stop and ask what the hell does that tell us about the nature of
employment?

[https://www.youtube.com/watch?v=nOanjl2g_14](https://www.youtube.com/watch?v=nOanjl2g_14)

"i was astonished by what they did there"

~~~
forgottenpass
_can we stop and ask what the hell does that tell us about the nature of
employment?_

The labor force does not consist of perfectly-informed or perfectly-rational
actors. The system is incentivized to keep it that way, and to make us think
this isn't already an open-secret.

We already know about the nature of employment. The interesting question are:
what should change? And which mechanisms that should be used to facilitate
that change?

------
rdlecler1
The bigger question is how much runway do they have left? It is going to be
hard to go back to the market to raise another round.

------
zerooneinfinity
Can't read due to paywall. Just curious, do people actually subscribe to WSJ
or other paywall sites?

~~~
tuna-piano
It's interesting, I assume many on here could afford to pay for WSJ, but
don't, because the WSJ makes up only a small percentage of the content they
want to read.

The answer seems obvious - the industry needs an unlimited Spotify model that
has the vast majority of content providers, and then pays out to the content
providers by total minutes read. Why this hasn't happened yet is very
interesting to me.

The existing model for journalism seems to be similiar to if there was a
Spotify type service for each record label - and you had to subscribe to 10
labels to listen to the music you wanted to listen to. This model made sense
when there was a marginal cost (printing and delivering) - but that cost is
basically gone for online readers.

I love good journalism from the WSJ, NYTimes, WashPost, and many others. But
no way am I going to subscribe to all of them - even though I want all of the
content. Micropayments seem like way too much friction, and a decision (is
this article worth it?) that is such a pain for consumers. Why can't they
switch to the Spotify model?

~~~
tomdale
I use [https://blendle.com](https://blendle.com), which is similar to what you
describe. It really has diversified the number of sources I read.

~~~
tuna-piano
Is that a micropayment model though? I can't imagine wanting to be bothered by
paying for everything I read. For some reason, paying for stuff, even if only
25c, makes me think "Is it worth it?", and I hate that feeling.

------
joshmn
Over/under on bail of $1MM? Any takers?

~~~
tardo99
I've been calling for a perp walk for about 2 years now....

------
aurizon
Holmsey, learn this, it will come in handy -

Do you want fries with that?

~~~
hellomoto998
This is rude.

~~~
aurizon
Rude, but accurate, she made errors of ignorance and omission, if not
deliberation and they have come home to roost...

------
passivepinetree
Can someone provide a link to a non-paywalled version of the article? Or
better yet, suggest a way so myself and others can find non-paywalled versions
in the future on our own?

~~~
downandout
Hit the "web" link above, which will bring up search results, and click over
from Google. They can't pull the paywall nonsense when you click from Google,
or they'll be delisted for cloaking.

I specifically avoided using a WSJ link on a story that made it to the front
page last week because of the paywall, and it was changed to the WSJ link by
HN admins because of the "original source" policy. I wasn't particularly
thrilled with this because I don't want to encourage paywalls, but apparently
they are going to be a part of HN for the foreseeable future. So get familiar
with the "web" link - you'll be using it a lot.

