
Theranos, Facing Criticism, Says It Has Changed Board Structure - uptown
http://www.nytimes.com/2015/10/29/business/theranos-facing-criticism-says-it-has-changed-board-structure.html
======
suprgeek
Classic misdirection move. The fundamental issue with this Sham company is
that people claim their Testing Methodology gives inaccurate results - How do
we fix that?

By changing the irrelevant board to a sightly smaller size.

I think this kind of move strongly indicates that they are in very big
trouble. Walgreens should shut down their existing Theranos branded centers or
risk getting sued...

An incorrect number on a blood test could be a potentially life altering event
for some one - NOT something you want a fraudulent "unicorn" to be putzing
with.

~~~
bsbechtel
>>An incorrect number on a blood test could be a potentially life altering
event for some one - NOT something you want a fraudulent "unicorn" to be
putzing with.

My immediate reaction to this statement was what if bad behaving private VC-
funded companies cause regulators to come down hard on the entire VC/startup
ecosystem, and potentially cause serious collateral damage to the entire
ecosystem? I don't know if this is something to be legitimately concerned
about or not, but it just popped into my head as a systemic risk all VC backed
companies face because of bad behavior from a few.

~~~
bwilliams18
I don't think the things they are doing wrong is inherently tied to being a
startup or being VC funded, at least from a regulatory point a view. They
appear to be skirting existing FDA regulations, and that is the area that
regulators will focus on and clamp down in.

~~~
bsbechtel
I think you're right. I just hope it stays that way.

------
xacaxulu
A lot of outlets are using the word 'fraud' when discussing Holmes and
Theranos. It's starting to look more likely.
[http://nymag.com/daily/intelligencer/2015/10/beloved-tech-
co...](http://nymag.com/daily/intelligencer/2015/10/beloved-tech-company-
comes-under-fire.html)

------
OopsCriticality
Anyone have any insight into how they were able to operate for so long without
a formal medical advisory board? In my own experience, that was something that
potential VCs wanted, either in place or in place shortly after financing
happened.

Also interesting that the new governing board has (as far as I can see) zero
medical expertise. The medical advisory board is still odd given Theranos'
technology: Simons makes sense with a background in hematology, but Helfet
doesn't make a lot of sense as an orthopedic trauma surgeon, nor does Frist (a
carry-over from the old board) as a cardiothoracic surgeon, nor does Foege
(another carry-over) as an epidemiologist. Personally, I'd expect to see
perhaps a mix of hematologists and pathologists and endocrinologists, as well
as some chemical and biomedical engineers and statisticians on a scientific
advisory board.

I'm left scratching my head trying to figure out what sort of due diligence
was performed. (edit: the tale of _The Emperor 's New Clothes_ does come to
mind however)

~~~
sjg007
You'd expect a chief pathologist or someone from that field. But if they are
licensed medical doctors that is good. Usually there is also a Chief Medical
Officer.

~~~
OopsCriticality
Licensed and _practicing_ : you definitely need someone that's kept up with
their CME. Does Theranos have a CMO or CSO? I don't see one listed on their
website... Not having one would be yet another oddity.

------
sriram_sun
Sometime last year I had moved to the Bay Area from Denver and was looking for
jobs. After hearing a lot of buzz about Theranos and seeing a recruiter post
here (on HN: Who's Hiring) I sent my resume over. Was rejected right off the
bat for not having a degree from a top tier school. This after ignoring the
fact that I have almost 20 years of experience and have worked on some world
class Medical Devices deployed over 150 countries. Granted, I could be a
complete idiot, but refusing to look at anything past my degree obtained 2
decades back was a little jarring.

In any case, I do think they are pursuing a worthy goal and we should not lose
sight of that fact. Kudos to Holmes for trying. As in any entrepreneur's case
there might be a lot of optimism bordering on delusion. If they fail, is it
because the problem was too hard to begin with or mismanagement? That is
something I'm curious to know.

~~~
thecage411
They told you they rejected you because you don't have a degree from a top
tier school?

~~~
sriram_sun
Yup that is correct.

------
jliptzin
I don't know much about Theranos but after visiting their website (at least on
my iPhone) it appears to be a great platform for Elizabeth Holmes' self-
aggrandizement. The first half of the front page talks about how she's
"empowering women globally to break down barriers in business," then a quote
from her about a glass ceiling and some more fluff about her encouraging
female entrepreneurship. And out of the 5 slides on the first page, 3 are
about her personally, including the first one. If I'm a patient interesting in
learning more about the quality of their lab tests, this would not be a great
first impression for me. It's just bizarre.

~~~
Atropos
>> It's just bizarre.

That's what I thought about the New Yorker article about Theranos/Holmes
([http://www.newyorker.com/magazine/2014/12/15/blood-
simpler](http://www.newyorker.com/magazine/2014/12/15/blood-simpler)) a while
back, where it was said about her: "Her home is a two-bedroom condo in Palo
Alto, and she lives an austere life. Although she can quote Jane Austen by
heart, she no longer devotes time to novels or friends, doesn’t date, doesn’t
own a television, and hasn’t taken a vacation in ten years. Her refrigerator
is all but empty, as she eats most of her meals at the office. She is a vegan,
and several times a day she drinks a pulverized concoction of cucumber,
parsley, kale, spinach, romaine lettuce, and celery."

~~~
jazzyk
Yeah, all the pictures of her in various affected poses, always in black
turtleneck...She must have been on more magazine covers than most politicians
or celebrities.

Such pretentiousness and in-your-face personality cult (of a freshman-year
college drop-out, no less)? Perhaps to cover up lack of substance?

------
AndrewKemendo
I think the more important story here is that Walgreens has halted their
partnership with Theranos.

[http://www.wsj.com/articles/walgreens-scrutinizes-
theranos-t...](http://www.wsj.com/articles/walgreens-scrutinizes-theranos-
testing-1445644015)

------
ansible
That they started out with such a board of directors in the first place tells
me they were more about image than technology.

Nothing less than a full reconstitution of the board plus top management, as
well as a thorough third-party review of their tech would convince me they're
legit moving forward.

------
Mz
Does anyone know of any good articles on the actual tech she is supposedly
developing?

Like some other folks here, I am kind of weirded out by this company that
seems to be worth so much, yet seems to have, so far, done so very little. I
wonder if "brilliant young woman" does, in fact, equal "cult of personality."
I am a woman. I have a tendency to attract a lot of attention, but usually for
the wrong reasons. I have had a very hard time translating that into work that
is worth something to other people and that puts money in my pocket. Some of
the things I have experienced makes me inclined to fear that _pretty young
woman, charming all kinds of brilliant men,_ is all this boils down to. I fear
it is, in fact, vaporware.

I am reminded of the vintage wine scam that occurred a few years ago (which I
just posted two links to).

Edit: The wine scam links I posted, for future reference:

[https://news.ycombinator.com/item?id=10474174](https://news.ycombinator.com/item?id=10474174)

[https://news.ycombinator.com/item?id=10474167](https://news.ycombinator.com/item?id=10474167)

~~~
OopsCriticality
As far as I know, there isn't any concrete public info on their technology
platform. Supposedly it is on the way to address the recent problems.

One of the few peer-reviewed articles (with Holmes as a co-author) that uses
Theranos technology I see indexed on PubMed is ref. [0]. The results aren't
mind blowing, and I have issues with their statistics methodology. This
article doesn't really go into the technology, and as a reviewer, I would have
given them hell for not even including a cursory description.

There is also a recent commentary in _Clinical Chemistry and Laboratory
Medicine_ that could be of interest, at ref. [1].

[0]
[http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4091290/](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC4091290/)

[1]
[http://www.degruyter.com/view/j/cclm.2015.53.issue-7/cclm-20...](http://www.degruyter.com/view/j/cclm.2015.53.issue-7/cclm-2015-0356/cclm-2015-0356.xml)

~~~
Mz
Thank you very much.

Excerpt from [1]:

 _Are all these accolades enough to guarantee that the company will deliver
the promised goods in healthcare? The answer is no. History teaches us that
there are numerous examples of seemingly disruptive technologies in healthcare
(and especially in diagnostics), developed by high-profile scientists,
including Nobel Laureates, which later collapsed, due to their inability to
deliver the promised goods._

I feel like my sanity is partially restored, and I haven't even finished the
first article.

~~~
OopsCriticality
If I may, I'd like to also direct attention to the last paragraph in the
"Costs" section. Certainly this perspective is under active debate, but even
if Theranos is able to deliver on their promises (and they could), their
fundamental hypothesis may be flawed.

~~~
Mz
Thank you. Very good call. Not at all what I expected it to be, based on the
context when you were pointing it out. Very pertinent information and fits
with a lot of things I understand to be true.

------
caseyf7
Rearranging the deck chairs of the Titanic. How long can they last with their
cash burn (have you seen the new office?) and the loss of Walgreens. The last
valuation may have been $9 Billion, but they are not that well capitalized.

------
littletimmy
I doubt Theranos voluntarily changed the board structure. It is more likely
that board members left after the expose.

------
srunni
The board may not have any real voting power, "thanks to a supervoting share
structure that gives insiders 100 votes per share." Holmes unilaterally
decides who's on the board.

[https://www.theinformation.com/inside-private-tech-voting-
st...](https://www.theinformation.com/inside-private-tech-voting-structures)

~~~
mcnamaratw
Ordinarily at least, the board is the board. Shareholders can vote them out,
though.

------
JonnieCache
Remember when we were speculating that theranos and its wacky cast of
characters heralded the zombie apocalypse?

[https://news.ycombinator.com/item?id=7951019](https://news.ycombinator.com/item?id=7951019)

I guess we can breathe easy now.

------
gmarx
The most shocking implication of this article is that Sam Nunn and Bill Frist
are not aging.

Seriously though, how does moving several people from the board of directors
to board of counselors help?

~~~
thrownaway2424
"Video Doctor Bill Frist", I can't help but read it that way. Look it up if
y'all are too young to remember.

The fact that anyone would associate with Bill Frist in any way has always let
me to skepticism about Theranos.

~~~
zurichisstained
You're referring to this? Definitely a bit of an eyebrow-raising moment.

[http://www.washingtonpost.com/wp-
dyn/articles/A48119-2005Mar...](http://www.washingtonpost.com/wp-
dyn/articles/A48119-2005Mar18.html)

~~~
x0x0
It's worth nothing that, despite all the noise from religious idiots and those
pandering to them, autopsy results were conclusive.

    
    
       Terri Schiavo suffered severe, irreversible brain damage that left that 
       organ discolored and scarred, shriveled to half its normal size, and damaged 
       in nearly all its regions, including the one responsible for vision, 
       according to an autopsy report released yesterday.
       
       Although the meticulous postmortem examination could not determine the 
       mental state of the Florida woman, who died March 31 after a judicial and 
       legislative battle over her "right to die," it did establish the permanence 
       of her physical condition.
    

[http://www.washingtonpost.com/wp-
dyn/content/article/2005/06...](http://www.washingtonpost.com/wp-
dyn/content/article/2005/06/15/AR2005061500512.html)

it's also worth reading this to get a sense of the full circus created by the
would-be theocrats and how dangerous they are to decent humans [2,3]

[2] [http://www.esquire.com/news-
politics/politics/a31593/charlie...](http://www.esquire.com/news-
politics/politics/a31593/charlie-pierce-terri-schiavo-jeb-bush-idiot-america-
excerpt/)

[3]
[https://en.wikipedia.org/wiki/Terri_Schiavo_case](https://en.wikipedia.org/wiki/Terri_Schiavo_case)

------
kzhahou
The new board is:

20% military - James Mattis, retired USMC general

20% legal - David Boies, lawyer extraordinaire

20% construction/civil engineering - Riley Bechtel

~~~
plonh
Military = "government contracting connections"

Legal Boies = "government regulatory connections"

Engineering = passing the Bechtel test. [That one is a bad joke, sorry]

------
italophil
I wonder if this was a move by the company, or the departing board members.
Perhaps they don't want to have their names associated with the current
situation.

------
pbreit
Seems like the right direction but I'm not sure why it had to come in response
to media reports.

At this point, the company simply needs to hunker down and try to make its
technology work. Demonstrating that it works will be comparatively trivial.
Building a business if it works, relatively easy as well.

~~~
7Figures2Commas
> Seems like the right direction...

Huh? How in the world does Theranos shuffling its board(s) and issuing a
statement supporting its "remarkable" founder represent anything meaningful?

> At this point, the company simply needs to hunker down and try to make its
> technology work. Demonstrating that it works will be comparatively trivial.
> Building a business if it works, relatively easy as well.

What in the world has Theranos been doing the past 12 years?

~~~
pbreit
What's done is done. Sunk cost, if you will. All that matters is going
forward. The board would have been smaller and included subject matter
experts.

------
falsestprophet
A lot of people here and in the media seem very troubled by Theranos and say
it is a sham or a fraud. But a fraud upon whom?

Theranos is a private company with a small number of sophisticated
institutional investors: ATA Ventures, Continential Ventures, Draper Fisher
Jurvetson, Tako Ventures, and Larry Ellison (founder of Oracle) [1].

These sophisticated investors presumably performed due diligence before
parting with $400 million.

But then again, maybe journalists and internet commenters know more about this
company than Draper Fisher Jurvetson and should all set off on lucrative
careers as biotech venture capitalists.

[1]
[https://www.crunchbase.com/organization/theranos/investors](https://www.crunchbase.com/organization/theranos/investors)

~~~
mik3y

        But a fraud upon whom?
    

Perhaps customers who have, er, paid to send Theranos their _blood_?

~~~
falsestprophet
There is no evidence that the tests Theranos offered are inaccurate. The
company has voluntarily discontinued them to allow the FDA to review them [1].

The controversy is principally about Theranos claims about technology it has
yet to deploy and the company's high valuation [2].

[1]
[http://www.azcentral.com/story/news/arizona/investigations/2...](http://www.azcentral.com/story/news/arizona/investigations/2015/10/25/theranos-
suspends-micro-blood-tests-allow-fda-review/74355082/)

[2] [http://www.wsj.com/articles/theranos-has-struggled-with-
bloo...](http://www.wsj.com/articles/theranos-has-struggled-with-blood-
tests-1444881901)

