
Problems Found at Theranos Lab - jhonovich
http://www.wsj.com/articles/problems-found-at-theranos-lab-1453684743
======
hkmurakami
Friend recently told me that when Theranos first hit the news as a darling
startup, his MIT Microfluidics PhD friends went to see what the novel science
was about. Naturally they read her paper and ... They couldn't find anything
new/special in the paper and were left scratching their heads.

Maybe VC stronger connections with scientists, not just technologies when
doing due diligence?

By the way this is a non sequitur but I find it poetically ironic that
Theranos HQ is located on Page Mill Road where WSJ's Silicon Valley branch
used to be located back in the day.

~~~
madaxe_again
I've been maintaining for a while that Theranos is a very cynical investment
vehicle, and has little to do with medicine. The backgrounds of those
connected, of her family, of the trajectory and direction of the company
(everything has been _very_ PR and financial press oriented) suggests that
their key mission is to grow the value of the company, rather than do anything
novel.

The sad thing is, this seems to be an increasingly common strategy in a
certain segment of the business world, and it brings value to nobody
ultimately - it just separates optimistic investors who just see a wunderkind
and incredible new technology from their money.

~~~
AndrewKemendo
_their key mission is to grow the value of the company, rather than do
anything novel_

I propose that this is the majority of startups and an even higher percentage
of companies generally.

I even wrote about that distinction last week
([https://medium.com/@andrewkemendo/startups-need-to-start-
val...](https://medium.com/@andrewkemendo/startups-need-to-start-valuing-
themselves-on-impact-not-valuation-8276690ae862#.icg4lm7iy)) and the response
was basically: The only way anything should be evaluated is based on return.

Very few of us actually give a shit about doing something novel.

~~~
cbsmith
> Very few of us actually give a shit about doing something novel.

Most novelty presents outside of business in general, including startups.
Startups generally are applying the novelty (that is no longer novel) that is
perceived as potentially valuable to see if it actually is.

Ideally, startups should be focused on doing something _well_, rather than
doing something _novel_. To the extent that novelty occurs, it should be a
side effect of that objective.

~~~
AndrewKemendo
I think the whole ethos behind a high-tech startup is that you do something
well by implementing a novel (in the sense of adoption rate) process or
technology.

There is certainly room for disagreement, but all of the "high tech startups"
that make up the startup zeitgeist, were exactly that.

~~~
cbsmith
> I think the whole ethos behind a high-tech startup is that you do something
> well by implementing a novel (in the sense of adoption rate) process or
> technology.

That might be the ethos, but it isn't the reality. Most startups aren't first
movers, and most of the ones who succeed aren't either.

Throwing in "in the sense of adoption rate" is kind of silly though, no? Every
mom & pop shop has its own unique process that hasn't been widely adopted.

I swear, those Zappos shoes are just like the ones you get on other web sites.

~~~
AndrewKemendo
_Most startups aren 't first movers_

I'm not talking about those, and it's not even necessary to be a first mover
so long as the startup is overhauling how things get done outside of the
current dominant market leader.

I'm talking about Microsoft, Uber, Amazon etc... the ones who have literally
changed the way people live.

Those are the ones that actually held up the ethos.

~~~
cbsmith
> I'm talking about Microsoft, Uber, Amazon etc... the ones who have literally
> changed the way people live.

...or they road a wave...

You didn't mention Walmart. ;-)

Uber has had a number of competitors, back in their day when they were
"changing the world", so did Microsoft & Amazon. Hell, Microsoft's operating
system ride started with an operating system they _bought_ from someone else.

If you grow at a crazy fast rate to become a household name, you inherently
are riding some kind of wave change. I don't think that was what the MIT
Microfluidics PhD friend was referring to as "novel". If you want to call that
"novel", then you are going to have a much harder time making the case that
Theranos isn't trying to be novel.

~~~
AndrewKemendo
_You didn 't mention Walmart. ;-)_

Well they are the ones being disrupted currently. They did it in the 80s and
90s to Sears and the rest.

 _you are going to have a much harder time making the case that Theranos isn
't trying to be novel._

I actually think Theranos is trying to be novel, my initial response was that
maximizing value isn't something new in the valley. I have no clue on whether
they are or not in reality, but they portray themselves as actually making new
technology - my guess is that they just can't do it and are trying to buy
time.

------
jhonovich
"UCSF charges Theranos more than $300 for a comprehensive metabolic panel,
said a person familiar with the matter. Theranos’s website shows that patients
who get the same test at one of the company’s blood-draw sites pay just $7.19.
A comparison of all the tests done by UCSF for Theranos shows that the company
appears to be incurring losses on many of those tests."

If correct, anyone have a legitimate rationale for Theranos doing this?

~~~
melling
According to Wikipedia the comprehensive metabolic panel is a series of 14
tests:

[https://en.m.wikipedia.org/wiki/Comprehensive_metabolic_pane...](https://en.m.wikipedia.org/wiki/Comprehensive_metabolic_panel)

"The tests are performed on machines based on the AutoAnalyzer invented in
1957."

Is there some reason that this should cost $300 58 years later? No Moore's Law
in medicine?

~~~
CamperBob2
_" The tests are performed on machines based on the AutoAnalyzer invented in
1957."_

That's like saying that modern PCs are based on the IBM 360 architecture from
1964. To the extent it's true, it's true in a way that makes sense only to a
tech-illiterate journalist.

~~~
danso
That quote comes from the Wikipedia article, not the WSJ.

~~~
CamperBob2
That doesn't make it any more meaningful. It's a ridiculous thing to say in
any context.

~~~
danso
No argument there...just wanted to point out that the author of the submitted
article didn't make such a claim, as that _would_ cast some doubt about the
assertions of the reporting.

~~~
CamperBob2
True, for some reason I read his post as both linking to Wikipedia and quoting
from the original article; my bad.

------
rdlecler1
Theranos operates under the explicit assumption blood Is homogeneous for a
large number of markers and that any two nanotainer sized samples will be
identical. If they are not, then in principle nanotainers can not work because
the sample size is too small.

~~~
drcode
> If they are not, then in principle nanotainers can not work because the
> sample size is too small.

I am the last person who wants to defend Theranos, but theoretically if there
are only a finite number of ways for tissue contaminants to enter a sample,
these contaminants could be corrected for with statistical methods and
accurate results could still be possible.

~~~
mbreese
You can't correct for inadequate sample sizes with statistics and still expect
a clinically relevant result (the confidence interval would be too large). The
issue isn't contamination in small samples, it's that the biomarkers they need
to measure may not be accurately measurable at such small volumes - in
particular with the value ranges required for the test.

It may just be that their "nanotainer" tests may only be viable for boolean
tests like their herpes test (herpes DNA present - yes / no).

------
randycupertino
I am just so amazed Theranos was able to raise so much $$ on basically a wink
and a smile without and due diligence by the investors. Everyone was
distracted by the blonde blue eyed Stanford dropout in the Steve Jobs outfit!
And now Theranos is blowing through investors $$ outsourcing their tests to
UCSF because their tech has failed. Hope WSJ keeps kicking the tires on this.

~~~
joezydeco
Let's also not underestimate the insanely powerful board of directors that was
assembled.

You have a handful of US Senators, a couple of CEOs from megacompanies like
Bechtel and Wells-Fargo, the ex-director of the CDC, and two ex-Secretaries of
State including _Henry Kissinger_.

How many other 19 year-old college dropouts can put that board together?

~~~
JoeAltmaier
Amazing. But I also have to wonder: _why_ put that board of directors
together? It smacks of gee-whiz marketing from the beginning.

~~~
joezydeco
Launching a new medical device is hard. You have multiple walls to scale
including the FDA, the insurance companies, Medicare, and the providers
themselves (hospitals, doctors, labs, storefronts, etc).

Having this group in place seemed to send the message of "don't worry, we'll
just tunnel through those hurdles" when it came to all the red tape.

------
discardorama
It looks like the WSJ has it in for Theranos. Is there some backstory behind
it? Did Elizabeth do something to Murdock?

~~~
freyr
It's shaping up to be the biggest, juiciest business story of the past year or
so, bordering on scandal. It looks like the WSJ is doing its job.

------
erikpukinskis
I can't help but shake the feeling some of the bad vibes in this thread, and
at Theranos in general, are people excited about seeing a woman CEO fail
publicly because it protects the narrative that women are getting undeserved
special privileges in today's society. I feel like similar stories of "fake it
til you make it" are often valorized here.

Of course I have no reason for believing that. Hopefully I'm wrong. But my
spidey sense is tingling. Am I miscalibrated?

~~~
lawnchair_larry
Yes. What you're seeing is how our community deals with charlatans. It has
absolutely nothing to do with the CEO being a woman.

