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Walgreen Terminates Partnership with Theranos (wsj.com)
310 points by dhawalhs on June 13, 2016 | hide | past | web | favorite | 143 comments

Walgreens managers also grew increasingly frustrated in recent weeks with Theranos as they sought information about the extent of test reports it had corrected or voided.

This seems to be a common thread in the stories I've read about Theranos, an almost pathological inability to provide basic information upon request. I can only guess that Holmes' notion of open and transparent communication is defined very differently from what most people would consider it to mean.

A big warning sign to me is also the bizarre collection of company reviews on Glassdoor [1]. It's really fascinating to me that anybody would even consider turfing their own company's reviews with this kind of ham fisted, single voice corporate speak nonsense. I wonder who inside the company is responsible for writing all of these? Holmes herself? Regardless, it's a really fascinating look into how Holmes has prioritized things.

1 - https://www.glassdoor.com/Reviews/Theranos-Reviews-E248889.h...

This is hilarious


  Advice to Management
 You are doing a good job. Stay in better touch with the 
 employees. I think most people do feel appreciated but 
 there are also some that are disgruntled and unhappy for
 other reasons. I see these people spreading negative energy.
 You should seek them and try and fix the problem.
Is it common practice among upstart companies to pad their reviews on glassdoor. I've been using those as references for my job search, I know better now.

My old job made us write positive reviews on company time. Basically anywhere that says, "keep doing what you are doing" as the advice to management and/or the reviews are ALL either 1 star or 5 star reviews, you know they are fake.

When they make you write reviews, the trick is to write a very glowing one, including several perks that you wish you had but don't. e.g. "Great company, love the 20% own-projects time and work-from-home Fridays." This has all kinds of good effects:

1) It subtly anchors execs and HR to accept your perk as reasonable, especially because the people paying attention to Glassdoor are far removed from your manager and don't actually know if you have those perks or not. "Since our company already does it, it must be a good idea," thinks the exec.

2) Your coworkers see the reviews and assume the perks are true but unevenly distributed, thereby further ingraining the perks in the company zeitgeist.

3) If you are eventually found out, nobody will ask you to write reviews any more.

and 4) Candidates, including good candidates, will come to interviews and say things like "I've heard you have 20% time, that's a great idea, tell me more about it." This fans the flames in favor of your perks.

I used this technique as part of a wildly successful give-us-more-perks agitation campaign in my previous job.

You sir or madam are and evil genius! My hat off to you!

I note on the reviews the "Helpful" click count gives some indication as to how relevant they are. I see

> Everyday brings new challenges, and you are able to approach these challenges with autonomy and creativity.

gets Helpful (1) and

>"House of Cards comes crashing down"

...A front row seat and education how to adulterate documents and strategy!

gets Helpful (76)

> I've been using those as references for my job search, I know better now.

Eh, that just means you can't take the reviews at face value. Ignore the obviously disgruntled employees, treat fluff reviews as a small yellow flag, and look for the real dirt not so much in the angry reviews but in the disappointed ones.

It's like dealing with Amazon reviews, which are also gamed.

You look at the low ratings, and if they're coherent and make sense to you then take them seriously. If more then one make the same claims, then it's probably true.

Well that plus I've had two separate situations where I left a negative review and was threatened until I took it down. Not sure you're going to see many unbiased views there...

How were you threatened?

One threatened to tell my current boss that I had been a bad, disruptive employee, even though he admitted that he knew that this was untrue. So he basically threatened to try and get me fired from my job because I reviewed my experience working at his company.

Other one threatened to sue me because I had signed a non-disparagement agreement after a layoff.

Wow, that is incredible shittyness.

They were able to identify you?

Yep. Small team one time and a coworker of mine who knew I wrote it told the company on the other one.

What do you mean by pad the reviews? Coerce employees into giving mostly favorable ones?

I won't name names, but one thing I've personally seen is HR initiatives encouraging employees to write reviews, not necessarily coercively.

If well-known companies are doing that, it's not unlikely that some companies are directly instructing HR personnel to write favorable reviews.

What's wrong with encouraging employees to post reviews? When you sign up as an employer, glasdoor gives you a sample email to send that asks for honest reviews.

Because it creates an implicit expectation that your review should be positive.

Yeah, I'm kind of torn on this. I was asked at a previous company to write a review on GlassDoor (I never did).

Let me rephrase that last sentence: GlassDoor was brought up literally at every monthly update meeting.

But back on target, I'm torn: On the one hand I understand the need to actively recruit and attract talent to join your workforce and I definitely understand GlassDoor is something used by many people to benchmark their expectations on working environment, management and peers. I get that completely.

Where I break off though is when you have to ask your employees to write a review (even if you're adding the qualifier "Be honest, we wont penalize you") instead of creating an internal feedback environment that can go into recruitment, retention and employee/manager review platforms.

I would say there's already a power imbalance inherent to the workplace, especially if you're in one of those "at-will" states. So putting in front of your employees "Hey, can you go write a review of working here on this site?" understandably makes some people shift in their seats.

Go with your gut on this one. Obviously being part of a tribe means trying to attract the best talent to ensure it's success, but it sounds like you don't necessarily want to join a tribe that's "encouraging" signals to a market when there wouldn't normally be any.

I don't really see how. If I'm unhappy, I'm not going to lie just because I want to anonymously live up to an unspoken expectation.

Unless you think people fear being ID'd... but that's a problem with the whole model.

Anyway, I'd imagine many glassdoor reviews were generated this way. If employers didn't ask, it would be mostly bad reviews from ex employees. Few others would bother.

The same would apply to App Store reviews also then. Essentially the review system is broken.

They wil sometimes remove reviews that are too negative. They removed mine of my previous employer.

Post fake reviews.

They are absolutely padded and padding is even encouraged at some places. Even companies like FB do it.

It'd be great if someone collated the data for the reviews and pointed out which companies tend to have the most "fake" reviews. It'd be a bit difficult to do so, but I can think of at least a few ways to try (date and frequency of reviews, "corporate speak," median length of reviews, distribution of "stars", distribution "helpfulness", writing style analysis, etc.)

Glassdoor reviews are still helpful - you just have to take the averages with a grain of salt, and filter any that seem to have been written by a PR flack.

That filter should consider every review that looks like it was written by PR as a 1 star. Adjust accordingly. Theranos appears to have about a 1.1 star average with that adjustment.

Yes indeed!

All those Glassdoors reviews talking about long hours of work, working late, and for what? What did all those people work those long hours for? For complete failure. Theranos is in shambles, and these people signed up to work and work late at a company that was a fraud. Requiring employees to work late, or to strongly encourage that kind of behavior is a huge red flag for me when looking for work. People wasted hours of their life at this place, away from family and friends and personal time, all for Theranos, a name that's a joke now.

Easy to say with hindsight. What if it would have worked out and their tech had revolutionised medical testing?

Failures are as important as successes, and nothing to be ashamed about from the employee perspective, just the covering up by management that's the problem.

This is anecdotal, but in my experience, the complaints about "everyone working long hours" is usually a sign of either:

a) Poor planning on the part of management, resulting from not enough resources or hires

b) Poor market performance, leading to having to squeeze more out of the existing resources to get the results originally projected to the investors

Certainly there are people who like to work long hours and there are jobs that will give them all the work they can want, but those typically aren't the people complaining about it.

When I've seen things like this on Glassdoor, it's almost always a company that's closing in on a spectacular failure. It's like almost some kind of evidence of a specific kind of leadership driven failure mode. Theranos didn't fail because of lack of market demand, or even the failure of their tech, they failed because of how they were run and these kinds of reviews seem to be specific pointers to this kind of management style.

Anecdotally, I once worked for a company that did this same thing and the feeling in the company much more closely matched the longer-form negative reviews than did the astroturfed reviews...all of which were written by one H.R. exec shortly before they were let go from the company.

Astroturfing Glassfoor should be considered fraud. It's giving information to potential employees while omitting material information (that the company is the oposter) for purposes which financially benefit the company and its backers.

I dunno, it seems pretty transparent it's bullshit. If I read stuff like this it's obviously signaling a toxic work culture full of company koolaid. I never drink the koolaid. I try to do a good job and work hard, but I never get into company culture stupidity. It's not in my nature.

True - it's deceitful and spreading misinformation.

This is tangental, but I also think that posting open job positions online when there isn't one should be considered fraud as well. Same with recruiters who do the bait and switch. People invest time from their lives into those, only to result as a record in a database somewhere when there was never any intention to hire.

I agree. Proving it would be difficult though.

Yep. It would have to require a regulating body like the IRS to be involved, since new hires are reported against EIN.

Just like institutionalized discrimination, prohibiting this has no teeth when nobody can prove it's happening.

> prohibiting this has no teeth when nobody can prove it's happening

If you take a job, find the experience to diametrically-opposed to how it was represented on GlassDoor and suspect your hirer of astro-turfing, a lawsuit with discovery would quickly uncover the action.

Oh god how I wish people would start thinking just a single cycle ahead in terms of unintended consequences before knee-jerking into outlawing things.

Seriously, what could possibly go wrong when companies can get sued over the inaccuracies of anonymous third-party review websites?

Reminder: you don't need to lose a lawsuit for one to be enormously costly.

Who would have regulatory oversight on this one? Fake Yelp and Amazon reviews go to the FTC and State Attorney Generals (Who could do a far better job.)

Another startling Glassdoor review that seems planted by the company:

'Cons Not a con, more of a note -

It is a start up environment, which means that it is very fast and dynamic. It calls for a lot of hard work and creativity. Theranos is not for someone who is set in his or her ways, or for someone who is simply looking for a 9-5.'

Agreed. For a second I thought it was an ad for a job.

"Pros A pay check that clears the bank. A front row seat and education how to adulterate documents and strategy! Working on my CV on company tine..."[1]

[1] https://www.glassdoor.com/Reviews/Employee-Review-Theranos-R...

It's been my experience that those who talk about transparency and openness are usually the ones most trying to lie, cheat and steal the most.

My buddy also had a theory that those dating profiles that say they don't want drama are the ones that are the drama.

Theranos' relationship with GlassDoor is rich. You should have seen the posts up there before Theranos went after them with lawyers.

Pretty typical. A lot of startups that are going down the tube (or were always awful) end up with horrible reviews on glassdoor. That makes it harder for their recruiters to do their job, so they pad it with extremely obvious fake reviews to compensate.

> I wonder who inside the company is responsible for writing all of these? Holmes herself?

Hey - someone can do some NLP work to estimate number of authors, right?

"Knowing that we have top talent in every vertical reinforces my pride and confidence in Theranos"


"In recent weeks, Walgreens also was named as a co-defendant in one of three civil lawsuits filed by consumers against Theranos. The suits, which seek class-action status, allege that Theranos misled the public about the nature and accuracy of its blood-testing technology."

Walgreens had an official partnership, including an investment of $50m, into Theranos.

If there is actual consumer damage shown its Walgreens that's going to find themselves writing checks to tort classes and attorneys.

In the entire WSJ expose it sounded like Walgreens management was as snowed-over as the rest of us with regard to Theranos' "technology" but it's crazy that they didn't do more relatively simple due diligence given their exposure

Who's writing the checks really depends on what's in the contract between Walgreens and Theranos. I haven't seen it, but it wouldn't be out of the ordinary for Theranos to have agreed to indemnify Walgreens against claims over the accuracy of the tests. If so, Theranos would be on the hook even if Walgreens is getting sued as well, and the real question is how big the claims are and whether they will be enough to to bankrupt Theranos.

In this case I believe that the contract was very tilted towards Theranos. The execs in charge were forced out previously. [0] I don't know any specifics on indemnification though, but if Theranos goes under, they can't indemnify much.

[0] http://www.nytimes.com/2016/04/22/business/a-once-avid-ally-...

> if Theranos goes under, they can't indemnify much.


Do you think they're fully insured? (I have no idea)

It still baffles me that Walgreens got into this partnership in the first place. A complete failure of due diligence.

Well yes and no. Remember that they have a really well connected board of directors and a lot of people put their reputation out there based on information they believed to be true. The managers at Walgreens don't know how to design, validate, and certify laboratory tests and procedures so they are kind of at the mercy of the folks who tell them they do. And while it would have been within their rights to send an outside pathologist on site to audit the entire workflow, to come up with that idea you have to at least suspect that they might be trying to pull a fast one on you.

I speak from experience when I say that it is easy to be fooled into believing people when those people actually believe they are telling the truth.

Bottom line is this is all on Theranos, and not Walgreens.

Then Walgreens should fail and come to be replaced by a pharmacy chain which one way or another depends on input from a competent pharmacist (whether they are equivalent of "CTO", or board of pharmacist advisors, or whatever works).

But according to a very relevant ArsTechnica article[0], they thought to do due diligence, failed to do so, and then in a fit of unicorn mania did the deals anyway:

Theranos failed to hand over an Edison to researchers hired by Walgreens to kick the tires and ensure it worked correctly, despite initially agreeing to do so. The young company, initially valued at $9 billion, didn’t even allow Walgreens executives to enter its lab or walk around the company’s headquarters without a chaperone, the WSJ reports.

Theranos did provide an Edison prototype and sample testing kits to a Walgreens executive. But the machine only spit out test results such as “low” and “high” so that Walgreens couldn’t compare the results to standard blood testing equipment. Nevertheless, Walgreens moved forward with a deal, partly out of anxiety that Theranos might partner with a competitor.

[0]: http://arstechnica.com/science/2016/05/walgreens-failed-to-v...

Having a chaperone for guests just makes sense. At the very least, you can keep them from accidentally breaking something. If you're not escorting guests, you're doing it wrong.

Agreed. I have never seen any commercial scientific lab (bio or otherwise) that let anyone just roam free. It would be a serious liability to let people roam without a chaperone. That has as much to do with biohazard/radiation/toxic/laser signs plastered around as it does company secrets. That said, the chaperone in this case should be very accommodating to the visitor in terms of seeing systems and operations of interest.

It's still surprising that it was possible at all to start doing this without some proof of work. There are better checks and balances for something as mundane as selling lettuce or holding money deposits; why not blood testing?

Bernie Madoff held the SEC at bay for years because of who he knew. What makes this any different?

The board of directors should have someone with sufficient background and subject matter expertise to be able to read the description of a technology the board is considering and say, "wait a minute, this sounds too good to be true." That should trigger due diligence, which can involve, among other things, sending an outside party to audit Theranos.

The fact that Walgreens has no such person on their board is their failing, in my opinion.

>The managers at Walgreens don't know how to design, validate, and certify laboratory tests and procedures

This is why the current company system is a bad idea. It puts incompetent idiots in charge.

This is almost literally the definition of an epic failure. If you're running a health company and someone shows up on your doorstep with some unusual claims about their product, are you going to pay someone to do some independent checking, or are you just going to rely on social proof and the fact that the marketing person seems okay?

Making management decisions on the basis of status and social proof - and that includes the VC scene - is the opposite of collective intelligence.

How many of us could name the current or former Walgreens CEO?

I've seen a certain mentality in people, including managers in the more "boring" companies in our economy. Silicon Valey companies are glamorous. There's a certain star mentality about it. Silicon Valley is in the news, the founders are rock stars.

I think the management of "boring" companies is as star struck as the rest of us are. They shouldn't be- they run huge companies employing many people, doing complex things and making profits. In this case, the star power blinded them and they'll pay a large price.

Stefano Pessina. One of the most impressive European entrepreneurs. And he's CEO because the pre-existing management, who got them into this mess, were terrible.

Out of interest, what is it that you do in your life that you're informed about such unusual knowledge?

The Walgreens Boots Alliance group have been in the news recently because of accusations of charging for unnecessary drug reviews for customers by the Boots part.

Professionally I'm a data scientist, but vocationally I'm interested in how the world works, and "real industry" is an important part of that.

Also, I'm British, and the Alliance Boots deal was big news.

Are you in London?

These big companies have good reason to be afraid. They fall from grace faster and faster all the time.

Look at the turnover in the Fortune 500: http://www.wired.com/2012/06/fortune-500-turnover-and-its-me...

I look forward to the movie version of this fiasco with Jennifer Lawrence playing Holmes http://www.independent.co.uk/arts-entertainment/films/news/j...

Anyone happen to know why this took so long to become official?

EDIT: Looks like it's mentioned a few paragraphs into the article:

Walgreens leaders decided to end the partnership after regulators disclosed problems at Theranos in late January, but held off on finalizing the separation because the company feared Theranos might sue, said people familiar with the matter.

They must have realized that Theranos is going to sue no matter what happens.

Not quite - Walgreens believes that the CMS punishment, which is expected in the next two weeks, will be sufficiently harsh enough that it will win a case against Theranos. If they lost the case, they could have potentially been on the hook for hundreds of millions or even billions of dollars in damages (i.e. so much money that even with the incredibly bad press of not severing the deal sooner, it still made more sense to keep the deal until things got to where they are now).


Official statement from Theranos:


  Quality and safety are our top priorities and we are 
  working closely with government officials to ensure that 
  we not only comply with all federal regulations but 
  exceed them. We are disappointed that Walgreens has 
  chosen to terminate our relationship and remain fully 
  committed to our mission to provide patients access to 
  affordable health information and look forward to 
  continuing to serve customers in Arizona and California 
  through our independent retail locations.

Are the tests just completely worthless? I thought the FDA or such would mandate a battery of studies to determine whether the tests were accurate before letting someone sell them.

The fact that a major chain was selling them also seemed to indicate to me that there was something real in Theranos. Probably a lot of people think the same way, and are disappointed.

No, the regulatory system is actually doing its job. The regulatory system is predicated on the government not being all knowing and all seeing and private actors in the industry having a bit of sense and doing their own due diligence. To structure it otherwise would basically make it impossible for any health tech startup to get off the ground -- the time required, and the capital requirements would be insane.

To summarize regulatory action:

Theranos sent in a marketing application to FDA for one of the use of Edison with one test, FDA said OK, this looks good based on the data you sent us (FDA can only see what you send them). FDA then placed Theranos on an audit list (common practice for any new company), stopped by after a few months, and found out that Theranos' own internal procedures for making sure that the data they generate about their product's performance is honest were, shall we say, poor. They also found Theranos marketing other components that they had not sought clearance to market from FDA. So FDA issued a 483 (deficiency notice) and the fallout from that we have yet to see. (I personally think there will be another shoe to drop here.)

Now, on the lab side, which is regulated by the Center for Medicare and Medicaid Systems, not FDA, the process is different. Basically CMS allows you to get a preliminary certificate after a cursory inspection and gives you 2 years within which to build a real testing process and get your shit together before they do the real audit. Theranos's Bay Area lab got the preliminary certificate and massively failed the real audit, and then massively failed to fix anything, which is what's landing Holmes in potentially very hot water (being banned from the diagnostic industry for two years in the US). The reason this is structured this way is that 1) to have enough data for a meaningful audit takes time and 2) the government expects anyone contracting with a brand new lab for the first two years to understand that it's a brand new lab and act accordingly (i.e. be skeptical, do your own audit, don't take NewCo's evidence at face value).

Most people in the industry understand this. Hell, most people at Walgreens understood this and were properly skeptical [1]. But the top execs at the time overrode the valid concerns of their QC people in order to chase the unicorn.

[1] http://www.wsj.com/articles/craving-growth-walgreens-dismiss...

Man I've gotta say that despite all the bad news this really bums me out. I love being able to run down to Walgreens, order my own blood tests, and get the results without a doctor or a big hassle.

Do you care if the results are garbage or not? Because that's why they're booting them out, all Edison results from 2014 and 2015 were voided. http://www.wsj.com/articles/theranos-voids-two-years-of-edis...

In my city you can get a walk-in palm reading by a psychic for less money than a Theranos blood test.

I can make it even more convenient - get out a couple of dice and roll them across your desk. If the total is under 7 you are ok otherwise go to the doctor for some competently run test.

All the other replies are misinterpreting this: There was once hope that this would democratize/commoditize medical testing.

Sad that it did not come true.

It's about time. I'd be very surprised if Walgreens doesn't have a legal liability as a result of taking so long to cancel the partnership.

The previous news story was that Walgreens discontinued sending blood to Theranos in light of the allegations.

If the partnership is terminated, then Walgreens must know something is very off.

Walgreens done messed up their due diligence big time. They have no one to blame but themselves. Greed drove them to this.

Consumer class action litigation against Walgreens has started and will go on for decades.

It's shocking to find out that a science education is actually pretty useful for leading a science company. DFJ and the other investors should be getting way more of the blame for not doing proper due diligence on Theranos. It's kind of amazing in a way that the company is still a going concern. There is going to be no salvaging this company, because it has nothing of value. What a shmozzle.

On the other hand, out of the top 5 pharma companies, only 3/5 CEOs have science degrees: (Edit: was 1, wasn't counting medical degrees before)

  #1: Novartis: Economics, MBA
  #2: Pfizer: BS chemical engineering, chartered accountancy
  #3: Roche: economics, law
  #4: Sanofi: MD
  #5: Merck: veterinary medicine, PhD
So a person who didn't know any better might not assume a science degree was necessary.

Do you think it's fair to compare a startup with established multinational companies that have profits and a serious track record? These investors are presumably investing in something, not writing a blank cheque. I could go start a space mining company tomorrow, with a view towards building a space shuttle that was powered by a single drop of oil but I would assume that I would have some trouble raising capital without some kind of verification of my claims.

I don't see one with a science degree. I see two with science degrees -- both in the same social science, each of which also has a professional degree in addition -- one with an engineering degree, and two with professional degrees in medicine (one if which is veterinary).

I count at least 3/5. Last I checked chemical engineering, MD and veterinary medicine are all science degrees, two are terminal degrees (MD, PhD.)

What does running a company have to do with science? I'm being serious here. It's not like the Ceo of a company is going to personally check on lab results.

The CEO needs to have an idea of what conditions are for workers. If I change the work-at-home policy, will we still be able to get work done, while attracting the right people? If someone comes up with a suggestion like "let's make such-and-such a molecule, it will cure the common cold", the boss needs to know what questions to ask. It's about have a prior that's better informed than a non-science person would have.

Lately there's been a trend towards thinking that management is somehow separate from doing things. It's a somewhat anglo-saxon thing, you'll find it less in the Germanic world.

Because it was a science startup company. The underlying proprietary technology that the entire company is supposed to be based on is a fraud.

It doesn't matter if their tech may one day only require a microlitre of blood to do a blood test. It doesn't work today. They were trading in the market as if it did. That can't be handwaved away. That fact isn't under dispute. That's according to several of Theranos's own current and former employees.

Extraordinary claims require extraordinary evidence. Scientists know this. The fact that Theranos's board lost all it's scientific leadership in July 2013 has been widely cited as a major contributing factor to this debacle. The judgement to not make those false claims is what running the company has to do with science.

> #5: Merck: veterinary medicine, PhD

I'm really curious what sort of path takes someone from training to be a vet to heading up a global pharmaceuticals company.

Animal models of disease are very important for drug development.

If anything, veterinary medicine is more often more scientific that human clinical medicine due to the greater ease with which experimental approaches can be performed on animals compared to humans.

I'd say a PhD from vet school is just as relevant as a PhD in med school. You are dealing with the same problems, just with a much wider patient type.

Yeah, I don't know if this has anything to do with a science degree. Folks with science degrees can end up managing things in a suboptimal manner, and so can folks without science degrees.

What took them so long?

The hallmark of a good product is whether or not the founder, founding team, board and few key shareholders are using the product. I'd like to hear more about this.

Depends on the product. (E.g., funeral service?)

Well...let's agree to disagree because I say the hallmark is whether the business model is sustainable, which I'm not sure your heuristic completely fields. Deal? To be fair, it did look like the business model had legs here for a while.

Nor really, most products aren't designed for consumer use. If a company makes nuclear weapons, I hope the board members are not using them. Board members may not have a use for straight jackets, body armor, cash registers, oil rigs, industrial equipment, commercial fishing vessels, you get the point.

Even if the product is great, the business model could suck and the company will fail.

That's useful if they're not all cranks trying to sell perpetual motion, organic food, or placebos.


You're not going to find many defenders of Theranos at this point, but that doesn't mean this isn't a bad comment to post to HN. We ask users here to post reflective comments, not ones that try to maximize fury—no matter how right you are or how angry you feel. The fact that you end your comment with a cheap slur about "more civilized countries" is indicative.

Dang, I appreciate where you're coming from, and understand your sentiment. However, as a pathologist, and having sworn to defend the US Constitution for over 20 years, and having visited a number of the countries he mentioned, I'm inclined to not disagree with the poster. And I am inclined to suggest that killing people for profit is the best single basis for righteous fury.

Inflaming indignation like that isn't righteous. It's a mob behavior, not much different whether the target is guilty or innocent. It's just more socially acceptable when the target is (or is seen as) guilty.

Group rage is good for bonding a community—as Phil Ochs once put it, "the family that slays together stays together"—but that's not the kind of community we want HN to be. Indeed, how we react to situations where someone is (or is seen as) obviously guilty is a good measure of how well we're holding to that standard.

I realize the above may sound counterintuitive, but consider that the comments we get are the best predictor of what we'll get more of. Do we want more of those? The dynamic that leads to is people one-upping each other with ever more fiery denunciations (which the internet, as we all know, is a good medium for). We can't have both that and reflective discourse, and we want reflective discourse, including about bad things.

In my estimation (I'd like to be wrong!) righteous fury adds nothing to the pursuit of insight. And, again in my estimation,[0] we'll better distribute justice if we stay unbiased and seek to understand the situation.

The people at Theranos, especially the wrongdoers, probably want to be and feel understood. I think that's a step toward insight and justice.

Maximizing fury (I love the turn of phrase) makes people defensive, which aborts the insight-pursuit.

[0] Sorry to use so many qualifiers. Because I'm telling people how they should talk, I want to be as precise as possible.

I think mucking up blood tests that almost certainly lead to misdiagnoses should stir up some fury.

Stirring up some is not the same as optimizing for.

I really don't see how this is 'optimising' over stirring up fury. What are your metrics?

The "civilized countries" snark at the end was pointless and annoying, I agree. But still, I'm not sure why knowingly swindling ordinary people should be anything other than criminal, whether it's done in the guise of a medical service or as a simple street con. There were people in Theranos who knew exactly what was going on, knew the human cost of it, had the power to stop it, and still pushed forward. How are they better than any common thief?

>I'm not sure why knowingly swindling ordinary people should be anything other than criminal

We (or, to speak for myself, I) should understand:

how often does fraud happen in this industry as compared to others

what causes it

whether it's stoppable once started, and whether other companies have stopped when they've started

how different are kinds of fraud in companies

These example questions are statistical. I'd so much rather spend time getting a statistical picture of the situation than maximize fury against one bad actor. I think "blaming people"--as a way of conversing--is low-quality dialogue. This is how I agree with dang that the above comment is not what I'd like to see on hn.

I like Japan but I'm not sure you should hold it out here as an example of good corporate behavior: http://scmp.com/business/companies/article/1880094/partial-t...

IIRC a number of Japan's corporations still work fairly closely with the Yakuza, don't they?

Yes, even politicians.

Fortunately we have a system of law and not based on outrage.

I agree that Theranos's leadership belongs in jail.

But I think it's worth reflecting a bit on how much our community created and benefits from the tech-genius hype cycle that they exploited. On how much we have supported a mythos that our cutting-edge innovations can't be judged by existing stick-in-the-mud regulators.

I'm not saying that those are entirely bad things. But it's worth remembering that Theranos couldn't have happened without Silicon Valley. If we want to keep the latitude we've been given, maybe should be more vigorous about policing the people making use of it.

I don't think that's "our community". It certainly isn't my community. I believe (and hope) that the delusional libertarian wing of the entrepreneurial class, who believe that regulation has no place in a market, is a fringe element.

The "no regulation faction" is fighting hard to get out of its corner. A few days ago, Jessica Flanigan (https://sites.google.com/site/jessicamflanigan/Research), an anti-FDA medicine ethicist at the University of Richmond, made the rounds on this very board. She shows how this group is trying to get its ideas accepted by the mainstream.

Note that she is housed at a philosophy department! Physicians are trained to put patient outcomes first. If she were invited to speak at any medical school she would be torn to pieces. She wouldn't have any good answers how her positions would help prevent Elixir Sulfanilamide or now Theranos. The medical school I am associated with is in the South, in a conservative town, and she wouldn't fare well here. But I guess at a conservative philosophy department they don't ask that kind of hard questions.

We need to fight to keep the libertarian fringe confined.

That's a little no-true-scotsman for my tastes. I don't like those people either. But it's hard to say that those people are not part of the Silicon Valley startup community, or the Hacker News community.

Pretty sure most libertarians are ok with regulations when they involve possibly causing harm to someone's body or laying hands on someone's body or property, and fraud. This case hits two of those concerns.

Not from what I've seen posted here. Hopefully that is a very fringe group that's just very vocal.

What does their blood test tech not working have to do with regulators?

Regulators allow only blood tests that work.

>The Theranos leadership belongs in jail

Let's ensure that actual crimes have been committed before we go throwing people in jail.

Perhaps civil forfeiture? Because apparently it is okay to do it to individuals.

Let's not legitimize that behavior.

More seriously, could one of Theranos' large minority shareholders (successfully) sue to freeze their assets, keeping any cash liquid? How bad of shape does a company need to be in before that becomes viable?

Has there been any confirmed cases where someone has died as a result of a faulty Theranos test during this period? Surely that would be the final nail in the coffin of such a mismanaged enterprise...

No. If that were to happen then I imagine that the discussion would shift to which Theranos executives will be going to prison.

1 - Theranos should have been more transparent, but what startup doesn't stretch the truth or even leave out data on occasion? It is a fine line between lying and hustling. Startups can often talk about something that doesn't exist yet like it does because they can move fast enough to build it.

2 - I worked at a medical startup in Palo Alto and I can attest that it is incredibly hard complying with all the FDA rules. Many are regulations that do little to protect consumers and exist from an outdated bureaucratic system. Others are lobbied into existence by big players like JNJ to protect themselves from startups like Theranos.

3 - Theranos was trying to do something that few people do - truly inovate in the medical world. As a country we have come to a point where little inovation is possilbe bc so many rules prevent the change necessary. We are not willing to accept any risk, and so we are stuck without progress.

4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things.

"It is a fine line between lying and hustling."

You just highlighted why I think "hustle" is a terrible word for the startup community to embrace. Google's dictionary (appears to be the Oxford dictionary) includes the definition "a fraud or swindle / to obtain illicitly or by forceful action". The Cambridge dictionary lists "A dishonest way of making money / to try to persuade someone, especially to buy something, often illegally".

By those definitions, there is no fine line - they're the same thing.

There is a fundamental difference between snapchat and medical tests. You cannot approach one as you approach the other. I have worked for a medical software company and the atmosphere is completely different from the usual move-fast-break-things culture at other places. You digitally sign for every line of code you write or review, every test you write, every test you say is working. If a single bug is found in your code, after deployment, it is traced back to the tester, dev and manager and it is counted against their performance.

TL;DR people die when you move fast and break things in medicine, and your company gets sued for millions of dollars.

Beign at either extreme, moving too fast or moving too slow, is problematic. A related field to medical is the Space + Rocket industry. Heavily regulated and if you make a mistake people die.

For much of the lifetime of the industry, NASA was the best there was. They embraced a "zero bug" mentality (http://www.jamesshore.com/Agile-Book/no_bugs.html). It resulted in very slow and costly development and we accepted that as the way things where, ie very expensive and little progress.

SpaceX came in with a move fast and break things mentality. They did not approach this in the way that had always been done (move slow and make no mistakes). They have greatly reduced cost and increased capability to a level that arguably would never have been reached by NASA, all without loss of life.

We don't need to test or develop medical in a haphazard way, but do have to accept that the way things work currently will not result many advancements (at least not rapid advancements). FDA regulations are fine until you realize that you have a currently incurable medial condition, and wonder if medical innovation was easier if you would have a cure.

Is the regulation to ease fear of a potential death/injury worth the many real deaths of people who we do not have treatments for?

  They have greatly reduced cost and increased capability to a level that arguably would never have been reached by NASA, all without loss of life.
Well, they haven't attempted manned space flight yet, have they?

I haven't got a lot of love for the FDA and their regulations, but if you are going to break them then at least have science on your side. It is one thing to not complete the 12th form that was identical to the previous 11 forms, but it is another thing to provide wrong diagnoses to real patients. I would be a lot more supportive of Theranos if they actually were competent.

> 4 - Before we all hop on the hate Theranos band wagon, lets remember that they did what all startups do - move fast and break things.

There are some things like medical information which should not be broken, and worst of all, lying about it.

You may be right with all your points.

But did Walgreens know this was Theranos' mentality? The investors, patients, the doctors using the unreliable test results?

If the Theranos stakeholders all hopped on to the "move fast and break things" train- I'd be all for it. Facebook had that as their well known public motto and people still invested and used the service. People don't want to break things when it comes to their health.

Elizabeth, is that you?

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