
Theranos: Blitzscaling, Blitzfailing, or Blitzfrauding? - kaboro
https://www.linkedin.com/pulse/theranos-blitzscaling-blitzfailing-blitzfrauding-reid-hoffman
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HarryHirsch
_Theranos took mortal risks at a massive scale by giving hundreds of thousands
of patients inaccurate blood test results that might lead to improper care_

That doesn't even begin to describe the extent of malfeasance. John Carreyrou
specifically mentions one patient who based on Theranos testing ordered
thousands of dollars worth of further medical tests. Their prothrombin time
was completely worthless, and people had their anticoagulants adjusted on
random numbers. People might have died because of that.

~~~
redisman
This is our modern day Enron (except with people potentially dying).

~~~
Reedx
Kinda, but I think it's small potatoes compared to the scale of Enron and the
amount of damage they did.

In any case, would _love_ to see the folks who made the Enron documentary
("smartest guys in the room") make one about Theranos.

~~~
redisman
I recommend Smartest Guys in the Room to anyone who mentions documentaries in
my presence! One of my all time favorites too.

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evrydayhustling
The core idea in this essay is that Theranos' decision to take big risks in
order to scale disproportionately compared to product readiness can decoupled
from their decision to trick others into sharing those risks. I'm left
unconvinced.

For example, Reid suggests Theranos could have have started by offering
traditional blood drawing services transparently, instead of taking the pin
pricks. Why would CVS have permitted access to their stores for such an
incremental test? Would investors have financed such a mundane trial?

Theranos' access to patients and capital seems to have depended explicitly on
falsifying how close they were to a breakthrough. That's not a hustle that
happens to be dishonest, it's a business model that can't progress without
dishonesty.

Strip away the potential for dishonesty, and "blitzscaling" is just "grow as
fast as you can by honestly engaging your market"... Duh?

~~~
rezistik
Honestly, is empowering patients to have control over their testing really a
mundane trial or incremental test? The magic I saw in Theranos was in their
ability to move the power closer to the consumer. If they had pursued that in
place of their fraudulent tests that could have been huge.

~~~
stevehawk
I honestly fear the day consumers can fully do that. I already have to listen
to a bunch of night time calls from patients to my wife where they are
obviously spending the day, post clinic visit for testing or diagnosis or post
surgery, using google to either question her diagnosis /treatment or reinforce
their own hypochondriac behavior.

I realize there are reasons for some people to question medical decisions,
like if your family was victim to something like the Tuskegee Syphilis
trialing, but people need to know their thirty minutes of online browsing
doesn't replace a decade of medical education.

(note I'm not saying we shouldn't be able to do some of our own testing like
blood sugar level, cholesterol, some others, but more like things where just
because you had an elevated level of X doesn't mean you have Y and you should
self treat immediately. And in probably jaded on this because she deals with a
lot of people that think either vitamin C or the power of prayer will cure
them or that she's lying about cancer because a chiropractor's thermagram
doesn't show it)

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gnicholas
> _Holmes told the gathered employees that she was building a religion. If
> there were any among them who didn’t believe, they should leave.”_

My wife teaches a class at Stanford called "The Religion of Stanford and
Silicon Valley". It has been interesting to see how the course has morphed
over the last few years, with Theranos, Juicero, Hampton Creek, and other
notable failures (both financial and moral). The above quote from Elizabeth
Holmes definitely made it into a Powerpoint slide.

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rossdavidh
He touches on, but doesn't quite make explicit, the central point that the
business techniques that are appropriate for one industry aren't always
appropriate for another. Much of Theranos' alleged sins would be wrong in any
industry, but it's hard to avoid the conclusion that Silicon Valley methods
are not appropriate in health care. Even 23andMe, a vastly more responsible
company than Theranos, got into a bit of trouble for dispensing health advice
without FDA approval. I am thinking that we will see a few high-profile
mismatches of industry culture in the fintech space sometime in the next few
years. If you were a software startup in, say, civil engineering or
architecture, you would similarly not be able to use people like Larry Ellison
for your role models, because buildings falling down is fundamentally
different than a search engine, social media, or e-commerce site crashing
under high volume. I think the real lesson for VC's is that when the industry
involved is an established, conservative one, that doesn't just mean it's
"ripe for disruption"; sometimes there are good reasons that risk is viewed
differently in that industry.

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sorokod
_The fact that autonomous vehicles sometimes crash doesn 't mean we should
simply ban them. But you should be explicit about how you're mitigating risk,
and how your product or service improves overall outcomes_

How would such "explicit risk mitigation" look like? Passing legislation that
indemnifies the manufacturers?

~~~
maxxxxx
I can imagine it being similar to medical stuff. You have to demonstrate that
you have considered risks and took reasonable steps to avoid them. But you
don't have to be perfect. Things can still happen.

~~~
sorokod
Is this how it works with medicines? When you say that things can still
happen, you mean that people will die - right?

~~~
maxxxxx
I am talking about medical devices but I assume it's the same everywhere. You
demonstrate that you have done everything possible to analyze the risks and
taken appropriate steps. But there is always something risk left that can't be
foreseen.

It's like building an airplane. If you follow all best practices the plane
will be pretty safe but from time to time some still will crash. There is
almost no way around that.

~~~
sorokod
Not familiar with airplane building, if you take away the human factor as is
the case with self driving car, what risks would would be considered
acceptable?

~~~
ksdale
It seems to me like as soon as you can demonstrate that the cars are safer
than the average driver, they should be okayed for road use. An absolutely
staggering number of people die in car crashes. People will of course die in
and around autonomous vehicles as well, but the key metric is whether
autonomous vehicles cause fewer deaths than the average driver.

Similarly, you could have a late stage cancer drug that kills half the people
who take it and saves the other half and it provides a massive benefit if 100%
if all those people were going to die otherwise. The fact that a lot of people
die is not the only factor to be considered. What matters is how the ultimate
outcomes are changed. It would be quite irresponsible to say that the cancer
drug shouldn't be allowed solely because it kills half the people who take it.

~~~
sorokod
This still leaves the question of liability. In the case of cancer treatment I
assume that patients are required to sign some sort of waver. Don't see how
this can work in the self driving car case as some of the victims may not have
signed such a waver.

This leaves some sort of bulk protection for manufacturers ?

~~~
ksdale
I don't know what will actually happen but I'm partial to strict liability for
manufacturers. If the cars actually cause fewer accidents than regular cars,
then even if manufacturers are liable for every accident, the total cost would
be less than what people currently spend on car insurance. The cost would be
initially paid by manufacturers and I'm assuming passed on to drivers through
the purchase price, resulting in basically the system we have now, without the
drivers of driverless cars having to carry their own insurance... Sounds good
in theory, anyway

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WalterSear
All of the above, along with Blitzfarthuffing.

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claydavisss
so "Blitzscaling" is basically working people to death?

~~~
jvagner
Blitzscaling blitzscaling blitz blitz blitzscaling blitz blitz blitzscaling
blitz blitz.

And blitz.

~~~
crooked-v
Sounds like it's time for the next development paradigm, blitzing. It's like
agile, except instead of standup there's spinup, where everyone has to pedal
as fast as they can on a stationary bike while giving a status update.

~~~
claydavisss
And the slowest rider at the end of the spinup is ground into food for the
CEO's annoying dog everyone has to pretend they love

