
A Marriage Gone Bad: Walgreens Struggles to Shake Off Theranos - dbcooper
http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-walgreens-is-struggling-to-shake-off-theranos.html?smid=tw-nytimes&smtyp=cur&_r=1
======
lingben
thoroughly disappointed in the Shriver interview, didn't ask any hard
questions, didn't redirect after her answers, didn't really seem like she was
at all fully informed about Theranos

now if John Carreyrou had been conducting the interview, that would be another
thing but I get the feeling that he would never be granted an interview simply
because he is much more qualified in terms of competency in Theranos and its
history and science relative to Shriver that they would see him as a threat

Shriver on the other hand probably came across as a 'safe' interview to the
company, which it was

real journalism is so hard to find these days, sigh

"Journalism is printing what someone else does not want printed: everything
else is public relations." George Orwell

~~~
bpchaps
Yep.

When the Chicago Tribune posted an article on how they started a lawsuit for
Rahm's email/text records, I almost immediately called them to tell them about
the lawsuit I'd filed for his phone records about a month prior after a year
long battle with FOIA/IL's Attorney General.

You'd think the person writing the article would have cared about the subject.
Nope. He was just doing his job. He forwarded me to the person who did the
research/foia. Left a voicemail, sent him emails.. nothin'. No response.

I then called the journalist from the reader who did the red light camera work
to see if they would be interested in it. The guy was completely turned off by
the fact that the answer to his, "What's making you do this?" was more or
less, "It's the principal of the entire matter." and ended the call about 20
seconds later. Bah humbug, I say.

~~~
awakeasleep
Hey man, it's life. At least 80% of people are going through the motions, and
that the default rate you should expect.

Thats not a humbug fact though, because finding someone who isn't going
through the motions can be explosively good. It's like, a gold mine digs up a
lot of dirt, but boy is it worth it when they hit a lode.

~~~
bpchaps
Nah, I totally get it. In a weird way, I'm glad there's been this much
resistance, considering I'm too stubborn to back away. Every time someone or
something pushes back, it's another thing that gives me a chance to say "This
is why shit sucks." with an opportunity at an attempt to address it.

The things I've seen and heard, the people I've met and the ungodly amount of
hand typed data I've had to go through... it's nuts out there and the rabbit
holes always go deep.

------
hunvreus
I can't help but notice that Ms Holmes is now wearing a hair loose and a
shirt. Having only ever seen her with hair tied and black turtle necks, I'm
wondering if this is an attempt at softening her image in the midst of a
deluge of bad publicity.

Not an ad hominem or personal attack, purely curiosity.

~~~
scottkduncan
I hope similar attention is paid to men's wardrobe choices next time a
corporate scandal article involving a male CEO is posted to HN.

~~~
pcrh
In most businesses if a man wears anything except a suit and tie it is a topic
of serious consideration, and possibly a firing offense.

The polo + khaki uniform of SV tech is an exception, but still pretty
constrained compared to the options that exist for women.

~~~
jonnathanson
_" In most businesses if a man wears anything except a suit and tie it is a
topic of serious consideration, and possibly a firing offense."_

I don't know if that's as true as it used to be. Business casual has pretty
much taken over most of corporate America by now. True, you might not be able
to roll into work at a non-tech Fortune 500 company wearing a hoodie and jeans
-- but you aren't expected to wear a suit, generally speaking, unless you're
in the C-suite or in a high-profile, externally facing role (investor
relations, BD/CD, etc.).

Suits are generally relegated to the professions these days: big law firms,
banks, and what have you. I'm sure there's the occasional company (F500 or
otherwise) that mandates suits for cultural or traditional reasons, but such a
company is likelier to be the exception than the rule in 2016.

~~~
cylinder
Big law is usually business casual unless you're in court or client facing.

------
stanfordkid
I've been calling this for ages since I saw Elizabeth Holmes speak at the
Entrepreneurial Thought Leaders seminar at Stanford 5 or 6 years ago. Huge
vision, entitled dismissal of incumbents, and a story that is just a little
bit too perfect. Following your dreams is cool, but only when they aren't
delusions.

~~~
bane
The first time I saw her interviewed, 2-3 years ago, I knew it also. The
incredibly unclear, defensive and meandering answers to incredibly simple
questions, the strange confrontational body posture, the paper-thin hints at
more business partnerships and customers than they could actually talk
about...once I started learning about the makeup of the board and some bio
friends of mine explained the non-homogeneous chemistry of blood, I confirmed
it in my mind.

I still don't know of a convincing explanation for all of it, but it reminds
me of some first and second-hand experiences I've heard about other, much
smaller startups, in deep deep states of denial while the company is literally
falling down around the CEOs head.

~~~
csours
The reality distortion field is not always a good place to be.

------
doctorcroc
Unfortunate that Theranos didn't live up to expectations. Bill Gurley writes
that the expose on Theranos may have been the seminal moment causing reality
to kick in for this tech cycle: [http://abovethecrowd.com/2016/04/21/on-the-
road-to-recap/](http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/)

So in a way, it can be seen as a good and necessary thing that expectations
are brought back to match reality.

------
mc32
One would think Walgreens would have done some due diligence when partnering
with anyone. Wouldn't they put someone providing healthcare diagnostics
services through rigorous testing to see if they could deliver on promises?
I'm hoping they don't take providers' word when they partner with providers.

Or is Walgreens just trying to get from under the weight of theranos's bad
publicity at this point?

~~~
bedhead
Their CFO at the time has since gotten fired for among other things, getting
Walgreens into this without doing a lick of due diligence. Evidently he
bungled a number of other things, hence getting fired. That kind of laziness
strangely exists even at large, deep-pocketed organizations where time and
resources certainly aren't standing in the way of doing old fashioned work and
analysis.

~~~
jerryhuang100
it's incredible that Walgreen, a public co., not doing DD for a non-proven,
non-peer-reviewed medical diagnostic co, with a possibility of very bad PR. i
would guess (simply speculation) there are some external factors, made
Walgreen to skip that. that's probably the whole point for the politicians on
Theranos' board, along with the DC connections (& Enron?) from EH's dad. and
these 'external factors' also played same tricks for the other PE funding
rounds. so here we go a criminal investigation is under going.

~~~
Alex3917
It's not like they do due diligence on any of the medication, supplements, or
medical devices they sell, so why would you expect it for medical tests?

~~~
mc32
This device made some pretty extraordinary claims no one else was making. That
alone should require some inquiries. It's as if Intel would tell Dell or
Amazon or Google, hey, we've got s new processor using our secret new core and
next gen x2 photolithography that we can deliver twice the flops at half the
power of our current processors. Book your orders now minimum Oder is one
million units. And Amazon Google and Dell pass on any testing. But instead of
it being Intel it was some new outfit.

------
Aelinsaar
I keep waiting for Theranos to loudly and messily implode, in a shower of
subpoenas and people fleeing the country.

------
pcurve
Test accuracy aside, isn't finger prick blood draw painful? I've had blood
drawn both ways, and finger prick is very unpleasant. I'll pick arm blood draw
any day.

~~~
LanceH
Time, skill required and volume are all in favor of the finger prick method.
And some people absolutely freak out about needles but would be ok with a
finger prick.

~~~
chimeracoder
> Time, skill required and volume are all in favor of the finger prick method.
> And some people absolutely freak out about needles but would be ok with a
> finger prick.

Except the pain factor. Finger pricks are actually more painful, particularly
when you have to draw more than a single drop of blood. Your fingers have more
nerve endings than your upper arm. Also, you tend to use your fingers more
than you apply pressure to your upper arm (e.g., typing, using your phone,
playing the guitar - all of those require applying pressure to your
fingertips, which will hurt).

Even diabetics oftentimes prefer to use the arm pricks, and they need to draw
a lot less blood than more elaborate tests need. (Not all diabetics, but
enough that there are literally blood glucose monitors that advertise this as
a specific feature).

~~~
LanceH
Not disagreeing with you, just saying the finger prick has a lot going for it.
In particular the lower skill barrier to do it may make it cheaper or more
convenient.

It certainly opens the possibility of self administration up a lot more than a
needle.

Bit of a moot point until it comes along, though.

~~~
zadig
The problem with self-administration though is misinterpretation. Not to
mention that the logic of cheapness/convenience -> more data -> better health
doesn't always hold. The more features you screen for the higher the chance of
false positives, and most people don't know how to put correct readings into
medical context.

------
mcnamaratw
So the not-too-subtle suggestion in the article is that maybe Walgreens might
not be struggling too hard to shake off Theranos, because W owns a piece of
the unicorn. Which isn't worth much if it ends up in the meat freezer.

(I have no idea whether that suggestion is accurate.)

------
a3n
I have to wonder why the board of directors didn't, you know, direct. In an
ideal world this would damage their reputation as directors with future
companies. But not today.

~~~
bronson
Have you seen who's on their board?
[https://en.wikipedia.org/wiki/Theranos#Governance](https://en.wikipedia.org/wiki/Theranos#Governance)

It's almost as if they intentionally stacked it with senators, govenrnment,
and military guys. This is not a typical board, especially for a medical
company.

~~~
fapjacks
I read an incredibly thoughtful and insightful comment the other day arguing
persuasively that the whole enterprise of Theranos was created with the
singular mission of glomming onto government for fat contracts, and that's why
the board looks the way it does. That they were riding the illusion of a
working product hoping to become entrenched.

------
blizkreeg
How has she escaped being fired yet?

~~~
jeswin
Probably because that would accomplish nothing. From the initial refusal to
publish details for review, and then the repeated delays, I'm guessing the
"Edison Machine" is just snake oil.

Theranos probably has no product.

------
seesomesense
Walgreen has significant equity in Theranos and is reluctant to force it into
crash and burn mode.

------
zwieback
I wonder, is this good or bad for other startups in the diagnostics space?

~~~
tclmeelmo
I would predict that it depends on where the money is coming from.

For VC firms that are experienced in the biomedical space, Theranos changes
nothing because they were already suspicious of Theranos.

For firms that are inexperienced in the biomedical space, they have hopefully
learned that growth cannot compensate for flaws in science or technology. If
they continue to invest in biomedical, they will be much more careful in their
DD; or perhaps they lose their appetite for biomedical and leave entirely.

I don't think things have changed for biomedical startups that are based on
good science and technology and have an experienced team.

What would be wonderful is if the media learned a lesson from this mess. As I
see it, they were a passenger in the Theranos hype machine.

~~~
jonnathanson
_" For firms that are inexperienced in the biomedical space, they have
hopefully learned that growth cannot compensate for flaws in science or
technology. If they continue to invest in biomedical, they will be much more
careful in their DD; or perhaps they lose their appetite for biomedical and
leave entirely."_

Exactly, which will result in essentially a return to the status quo. The
investors who understand the complexities and models of the various biomedical
industries will continue to invest as they always have. The carpetbaggers will
fold up their tents and move on. The result is less likely to be systemic
taint or damage to biotech startups as a whole -- though this may happen in
the short term -- and more likely to be a reduction in fly-by-night or sketchy
biotech startups for lack of funding.

 _" I don't think things have changed for biomedical startups that are based
on good science and technology and have an experienced team."_

Yes. To paraphrase Buffett, the tide will go out, and we'll see who's been
swimming naked -- but the people who've been wearing swimsuits will be just
fine.

 _" What would be wonderful is if the media learned a lesson from this mess.
As I see it, they were a passenger in the Theranos hype machine."_

The media hype surrounding Theranos was truly spectacular to behold. One day,
nobody's ever heard of this company that's been stealthily chugging along for
nearly a decade and raising heroic amounts of capital. The next day, Holmes is
on the cover of every business magazine, in full Steve Jobs attire and
disposition. (I'm pretty sure one or two breathless headlines actually called
her "The next Steve Jobs.") Soon she's headlining the lecture circuit and
racking up more puff pieces and cover stories.

It's as if _nobody_ took a critical eye to any of this hype, other than the
WSJ. No doubt a confluence of factors was at play here: A desire to fill the
"Great Tech Visionary" vibe left vacant by Steve Jobs's death. A desire to
find the next great female role model. A desire to cover "hard tech," and not
just the Nth food-delivery app of the week. And then there's just good old-
fashioned me-tooism, which routinely plagues the business press: "Everyone
else is covering this, so it must be a Thing, and now that it's a Thing, we
have to cover it!"

~~~
tclmeelmo
An interesting question for me is, what will be the effect on wellness
startups doing things like Fitbit or Soylent? I have no idea.

------
smaili
tldr:

 _Walgreens appears to have taken a cautious approach toward terminating the
relationship, perhaps preferring to wait until federal regulators impose
penalties or the criminal investigation yields formal charges, either of which
would strengthen Walgreens’s hand._

Essentially, Walgreens is playing the wait-and-see game before making their
decision.

------
raverbashing
I believe all prick exams need some level of squeezing ( did one a couple of
weeks ago, giving a couple of samples from the same prick) it didn't hurt too
much though

~~~
softawre
[offtopic] - And this is why I love HN. Maturity. Imagine this thread on
reddit.

~~~
oldmanjay
this story just isn't very interesting for the meme-and-reference-humor-loving
HN crowd. I assure you, they are around, working hard to destroy what
relevance we strive to maintain.

~~~
semi-extrinsic
I believe GP was rather pointing out the large and (dare I say) untapped
potential for double entendres in the posts above.

~~~
nickpsecurity
Exactly. I do memes, cultural references, academic references, and everything
else here to liven up dry discussions. Yet, I had no intention of twisting
those specific lines into something else because the thread would just get
retarded. Like it does elsewhere.

We're here and reading but just like HN quality level to stay where it is. :)

------
1024core
A part of me feels sad for Theranos. I wanted them and Elizabeth to succeed;
more the latter, actually. If she had succeeded (I still hold out hope), she
would have been a terrific role model for young women everywhere.

~~~
JamilD
A role model for young women with parents coming from old money, with both
Beltway and VC connections?

It'll be great to have another role model in tech for young women, but
incidents like this do more harm than good…

~~~
ryandrake
This is a good point. Today's current tech role models, both male and female,
are sending the unfortunate message: "Be born rich, have daddy pay for you to
go to Stanford or Harvard, party a lot and make friends with rich future
investors there, and you too can become a successful tech founder!"

~~~
JamilD
And don't forget to drop out after a year of college! You've made all the
connections, so what else is there to learn?

There are some exceptions to this pattern though, like Jan Koum and Andy
Grove. We desperately need more of them in today's tech environment.

~~~
ryandrake
Maybe it's just me seeing the past through rose-colored glasses, but it seems
that the "Work hard and know technology" founders were more common in the 70s,
80s, and 90s, in contrast to today's "Party hard and know rich people"
founders.

~~~
ethbro
I think the "work hard and know technology founders" have always been around.
But honestly, isn't this somewhat of a self-selection bias and something that
remarks on the monotony of modern university?

If you're a highly driven and entrepreneurial individual, are you going to
stick around for 4+ years of enforced pace higher education?

~~~
sethhochberg
You might be more inclined to stick around and finish if you didn't have
familial support to fall back on if your entrepreneurial plans failed and you
didn't have the credentials to secure traditional employment. Dropping out
lets you get started on entrepreneurial plans sooner, but could leave you in a
risky spot later if they aren't a success.

------
wehadfun
Why so much negative press about a diagnostic company? Most people would
struggle to name 1 of these save for having to get a drug test or something.
It just seems odd. Like some sort of vendeta to crush this company.

~~~
danso
How many diagnostic companies have tried to make the same claims as Theranos
without having a profitable business? Theranos punched far above its weight
when it came to fundraising and garnering media hype. The downside of such an
approach is that if you goof up, you are that much of a spectacle. Or to
paraphrase Jesus, those to whom much is given, much is expected.

