Even as the questions were building and the noose was tightening, she would announce a public talk to reveal and openly share information on the company's tech, then mysteriously cancel a short while later -- she did this over and over.
I'm still not convinced that Theranos was meant to be a scam, or at least not a scam in the way most people are thinking about it. But it has definitely produced a similar output, and that makes it functionally equivalent.
I hope, really hope, that someday the true story about all the WTF-ness around Holmes and Theranos comes out.
I've been on the inside of a company like this once and I ran away as soon as I realized the place was up to no good. What still bothers me about my personal experience is that I, even as a person on the inside, still don't know the truth about that company due to all the same weird kind of cult of secrecy things we've seen at Theranos. The truth in these kinds of things, I suspect, lives only inside the heads of the people who run these kinds of organizations and it may not ever be possible to get at what the truth actually is depending on how far down the delusion hole they've fallen.
Real kudos to the press who broke and made very public the stories. This was the media at its finest. Those journalists may have helped save many lives.
On the other hand, most of the press was more than happy to play along with this charade. Those in the media who ran with lazy profiles enabling this fraud should be remembered.
Holmes' complete inability to answer simple direct questions was a huge flag to me, and when I saw it in interviews I was really waiting for the press to pounce and it just never seemed to come.
"So you say you aren't approved to do any testing?" wink wink
"<typical long winded Holmesian answer>"
"moving on, what's it like being a woman running a startup?"
I think it's possible Holmes fits your description - she was in over her head, never set out to scam anyone, and slid down a very bad path without ever intending to. I don't know this is the case, but I believe it's possible. That, however, is not Madoff.
Not much is gained from that label, in my opinion. And I certainly wouldn't apply it to Bernie Madoff or Holmes based on what I know of their situations.
The impulse to associate 'bad actions' with 'inherently bad people' can make it harder for people to realize when they are acting badly and to pull out.
That's one of the reasons he was able to get away with it for so long. People assumed that he wouldn't steal from members of his own community like that. So most observers assumed he found a way to front run trades on his other funds without getting caught, and were looking for evidence of that.
Not an argument.
> And I certainly wouldn't apply it to Bernie Madoff or Holmes based on what I know of their situations.
If you're going to disagree with someone, generally, some logic as to why is useful, not just "I don't agree". Madoff certainly deserves that label, he ruined lives by running the biggest investment scam in history: he clearly didn't in any way care about what happened to those other people, completely lacking in empathy, they were used and discarded.
I've also read the Nuremberg Diary. That book, and Hannah Arendt's famous phrase "banality of evil" have influenced my thinking in this area. People who do very bad things are not necessarily "less than human" or "exceptionally inhuman," although it's easy to make that assumption.
Anyway, I think the concept of a sociopath is entirely theoretical. Until we can scientifically determine what someone is feeling by hooking them up to a machine and reading their emotions as we present them with various scenarios (i.e. a Voigt-Kampff device) then why even bother throwing around such a sensationalized word?
As far as Madoff goes, I never understood the obsession with branding him as notably evil. He stole a lot of money from a lot of people and lied to a lot of people. But the notoriety of that case has more to do with him being an upstanding member of society i.e. "the last person you would expect" (also the scale of the fraud). I don't believe his theft is morally more egregious than millions of other thefts that are committed every day.
(And taking a loan from a friend while it was collapsing is a sign of desperation, something anyone could do, so don't quote me that particular interaction.)
It's not 'defending' someone's actions to say that there is no proof of an extreme lack of empathy.
Strawman, never said they were. You're arguing with yourself now.
Theranos marketing materials lied. Only difference is they changed the marketing materials after they got caught.
> never set out to scam anyone
How do you know? Maybe that's been part of her scam...to operate it under the guise of a venture funded startup. The difference between Madoff and Holmes is that Madoff's scam is purely financial, so it's easy to understand motive. It's slightly harder to understand for Holmes' case and the verdict is still out.
So, to answer your question, I don't know, which I clearly said. However, I think it is possible that Holmes was not intentionally running a scam, but allowed herself to be deluded by her own story. Again, to be clear, I do not know this is the case. I think it is possibly true. To me, this is different from Madoff, where we know he knowingly ran a scam.
Is using the sociopath label premature or unsubstantiated? Possibly, I know I'm not qualified to assess that, but he does support his reasoning, even if it's wrong. If he had said, "Based on my understanding of what a sociopath is, and the facts as I understand them from Harry Markopolos' book, "No One Would Listen", I think Madoff is a borderline sociopath at least, and possibly an outright sociopath." would you have taken as much offense? Does that sentence not express a useful point of view with respect to the argument that Madoff is different than Holmes?
It's tricky, because our good-intentioned attempts to improve discourse can actually have the effect of stifling discourse when this tendency progresses farther. There are many topics that fall under race and sex that it's hard to rationally discuss because people view the asking of the question itself as insensitive. For example, try posing a question about advantages of a population (race, sex, insular group) based on genetics in a submission here that's related in some way, and you might find you've been down voted and possibly called racist or sexist (likely in more words but to the same effect) prior to anyone actually paying attention to the question you're really trying to ask, and whether it has merit. It's hard for people to stay rational when someone questions the foundations upon which we build a lot of our beliefs (such as people are born equal).
I find a good rule-of-thumb for me in situations where I feel the need to call out the method in which someone raised a point, but not necessarily the point itself, is to pose it as a question and ask whether the method they chose really helped or hindered their point, and to try to do so in a way that's not condescending (which I hope you don't take this comment as, it's surely not intended that way). For example:
"Is the label sociopath really appropriate, and do you think it was needed to make your point?"
In this case, I think scott_s does think it's appropriate (that was made clear), and because of that is was his point. Now, if the original comment was something like "You can't compare Madoff to Holmes, he's in a different category because he's a sociopath." then I would think differently, as there's little useful substance to that comment and it's not really substantiated.
Okay, got that off my chest. Feel free to ignore as you see fit... :)
Thanks for applying the principle of charity! (In case the tone of my text is unclear, that is a genuine sentiment.)
Of course while every company wants to paint itself in the best light it is probably best not to engage in outright deception. If discovered that can be fatal.
Unfortunately, many of them start that way, especially those that reap the benefits of network effects. Anecdote: http://venturebeat.com/2012/06/22/reddit-fake-users/
For all we know, Holmes could have harbored grave doubts about the viability of the tech, based on doing all the right sanity checks. But if she took the meme seriously, "hey, no one else knows what they're doing, no one knows why anything works, they just meander through life and things eventually fall into place. Once you have enough status, you're bulletproof, right?"
This is dissonance, defined. Seeing one's actions as maybe being justified later is just rationalizing using other's feelings or thoughts. It's not cool to speak for others and if one is not careful, they can burn their entire life down around themselves.
My bigger grudge with Theranos' founder and the likes is their hoax seriously hurts the startup industry culture. Some people get really confused, some start following in these footsteps, some even lose direction with so much mis-information flying around. The chest thumping hotshots suck up too much energy and resources from the ecosystem.
The WSJ reporting in particular has been deeply investigative where most of the rest of the media has just sniffed around at what appears to be a problem. Holmes' interviews in particular are some of the weirdest things I've ever seen, here's a fairly typical example: https://www.youtube.com/watch?v=A8qgmGtRMsY
Here's some examples of the media coverage of the company:
and here on HN
and specificially about Holmes
This business, didn't pass a basic litmus test of objective criticism from people who work in the space.
There seems to be this bravado among founders who believe they're sticking it to all the people who say something's amiss. I think if there's an elephant in the room though, it probably should be assassinated with a huge body of transparent evidence.
1) There's disruption that's seen as impractical or insanely difficult (e.g. Tesla, SpaceX). Or technically feasible but with significant social or legal obstables (e.g. AirBnB, Uber).
2) Then there's another category, disruption that defies laws of physics. Kickstarter is replete with examples. This includes things like pocket-size underwater rebreaters, self-filling water bottles, and solar-powered motorcycles.
I'm no expert in the subject matter but Theranos tech seems to be in the latter.
> The blood you get from a prick will be a mixture of blood from small venules, small arterioles, capillaries and lymph vessels, mixed with whatever loose tissue and cells have been cut by the prick and carried over into the blood. No way you could ever get a reliable CBC from such a sample. Since the kind of general blood tests that this company is targeting are usually CBC + chem panel, even if you could get your chem results from the prick, you still need a normal blood draw for the CBC, so the competitive advantage that they are trying to push (quick sampling by patient at pharmacy, without need for phlebotomist) is lost. On top of that, the variability inherent in chem results from prick blood will be significant for several analytes, like CK and AST (present in muscle so could be raised from prick injury), glucose and lipids (different levels in venous or arterial blood or lymph), etc…
In short, while it might be possible to reliably use only µL of blood for tests, using µL of blood for dozens of tests seems questionable, and the chosen blood source is likely to be mostly worthless.
That the uncertainty produced by the source chosen exceeds the acceptable variability in the results is an impossibility proof for a testing method relying exclusively on a single sample from that source having acceptable accuracy, since the accuracy of the test result cannot exceed the accuracy of the source used in representing the underlying measure.
For comparison, there is tremendous variation in the sound waves that humans recognize as the word "apple", but there are still systems that can filter out the relevant noise and identify the critical dimensions of variation.
Simply saying that the source is messy is not a proof that it's impossible to work around that.
This is a fundamental problem. You might luck into roughly correct results most of the time, but the basic nature of statistics is against you.
My point is only that there is no hard theory decrying this to be impossible in the same way that, say, computer scientists can prove that a problem is NP-complete.
Extreme to the point of being nonsensical in its impracticality (cost of installation, cost of replacement, current PV efficiencies, etc), but not fundamentally impossible.
While it is difficult I would say much of this is due to the infrastructure and capital requirements to get to this point. No one doubted that an electric supercar could be made, rather that it would be very difficult to achieve scale.
Had Theranos opted for a mass produced microfluidics chip and instrument based on existing chemistries people would have said it would be difficult to compete with the large industry players (Bio-Rad, Roche, Thermo Fisher etc). This would be deemed difficult or "ridiculous" for reasons relating to capital, infrastructure and potential market share rather than the actual science and functionality of the system.
This is where Theranos differs from Tesla, not only trying to achieve scale but do so with a unproven scientific method.
It's a shame that Theranos has played out like this because a system that uses a small amount of blood is a great end goal but should have been a 10-15-20 year goal; just as Musk didn't intend to produce a $30,000 mass market car from the beginning. If Theranos built their own instrument based on existing qPCR research/design and used existing chemistry they could get "in the door" and begin really understanding the market. They would need to differentiate but could do so by attempting build a single benchtop automated unit that removed the need for manual sample preparation. While their solution may be a premium offering and a smaller market this would lead them towards their ultimate goal. Over time they could begin to look into chemistries, chip designs and instruments that would bring them closer to their ultimate goal of low cost and low blood requirement testing.
which ideas? Is there really that much innovative stuff by elon musk?
My impression is, that it was always more about economic feasibility than technical feasibility. Competitors to Tesla and SpaceX existed before those were founded but they lacked the investment.
Don't get me wrong, they're fantastic and innovative, but the basic technological underpinnings have been long established.
Sure, but not something that critics said was technically impossible (not likely to be viable as a business model, sure, but that's a different class of complaint.)
There were no scientific and few engineering objections to most of Musk's projects, mostly social/business objections that the time window was uncertain, the risks were high, and it would be difficult to build a viable business to bridge the gap it would take to get to the objectives.
There's a difference between projects not making sense to the risk tolerances of current incumbents and projects operating in an area where the science is well-established and demonstrates clear reasons why what is proposed cannot work.
Deciding to build a company that aggressively rides the edges of those curves is a lot different than building a company around a completely new technology that aims to beat anything in existence by a huge multiple (which is the claim for Theranos, that they would do accurate tests with vastly smaller amounts of blood).
Tesla built a very expensive sports-car, before they advanced towards cheaper products for the masses.
Disclaimer: I don't know much about how SpaceX or NASA's finances work. But I assumed that, due to their tighter coupling with a government, NASA has less leeway in their decisions of which technologies to research compared to SpaceX.
There are videos of the Autopilot feature attempting to swerve into oncoming traffic. It does have the potential to kill people, it likely will in wide usage just by raw statistics, and it's likely to eventually fall under regulation of some sort. That doesn't mean it's necessarily a bad feature, but pushing self-driving car functionality as a "beta" to the public is, by at least some definitions and to some extent, "Elon Musk playing with people's lives".
This is not born out by the currently available facts.
Tesla quoted deaths-per-autopilot-mile versus overall deaths-per-mile for all cars on the road. This is very misleading information, for a number of reasons.
1. Teslas are high-end luxury cars and thus have better safety features than the lower end of the market.
2. Teslas are likely to be newer and better maintained than the average car on the road. The average age of a car on the road is 11.4 years (https://www.google.com/search?q=average+age+of+cars+on+the+r...) - there are ZERO Tesla cars that old.
3. Autopilot is disabled on residential streets and those with no center divider (http://www.newsmax.com/TheWire/tesla-autopilot-videos-restri...), which means it's driving in more predictable situations than average. You're also unlikely to have it on when there are things like icy/snowy conditions.
4. Autopilot will hand over control when it can't handle something. If it does this suddenly, the subsequent crash may not count in Musk's "autopilot miles" statistic.
Most drivers will take over and disengage Autopilot in doing so, so your point remains, but I wanted to make it clear that the car isn't just doing a "Jesus^H^H^H^H^HDriver take the wheel!" thing.
Is it when the alarm sounds? When it begins to slow? When it turns on the hazards? When it has come to a complete stop? How would being rear-rended during this process be counted?
3 this is valid point, but it's significance is diminishing as autopilot is accumulating death-free miles. also does tesla not deal with icy/snowy conditions in Norway?
4 is pure speculation.
#1 and #2 are not at all irrelevant. This sort of technology will make its way into lower-end cars in time. Having actual data on how safe it is, with other variables accounted for, is going to be extremely critical.
It's like claiming racecar driving is really safe because not many people die doing it. That's not actually because it's safe - it's because the drivers are very well trained, with very good safety equipment so they survive crashes.
Teslas are safer than average cars. The autopilot may not be.
> 3 this is valid point, but it's significance is diminishing as autopilot is accumulating death-free miles.
It is certain statistically to have more fatal accidents as it accrues more miles. The underlying issue - that "autopilot miles" are safer miles than "all miles" - will remain. Its accident tallies need to be compared statistically with miles with human drivers in similar road conditions. This will likely require a research study.
> also does tesla not deal with icy/snowy conditions in Norway?
I couldn't say for certain, but it apparently will shut down in moderate rain (http://www.teslarati.com/tesla-autopilot-limitations-heavy-r...) so I'd guess snow would have similar impact on its visibility and functionality.
> 4 is pure speculation.
#4 is an important question.
Per http://www.torquenews.com/1083/why-tesla-s-2014-model-s-cann... - has some interesting comments, too.
I don't mean to draw parallels, but I remember when Jobs announced the iPhone, everyone was very skeptical. Some called it the "Jesus Phone". I heard that when the iPhone was finally launched, Blackberry engineers went out and bought a few to see how he had done it.
Of course, just because there are skeptics it does not mean that the product is good. E.g., all the "perpetual motion" machines out there...
It's for hiding the failure and pushing the failed technology to patients outside the scope of an experiment.
Even then, he almost failed.
In an engineering culture, there's solid respect for reality.
In a political culture there's respect for caste, status, and power, but not so much for reality.
Political people believe their own PR. They believe all they have to do is throw money at something and bang the table enough and they can get whatever they want.
Engineers know it doesn't work like that. Sometimes they throw money at things and bang the table too, but ultimately if reality says "No" - or "Not yet" - they accept that and move on.
If the product don't actually work in the first place, you can't call that innovation and it appears that Holmes failed to do her due diligence.
Isn't this just elementary statistics and completely independent from the domain?
One reason that assertion might not hold is if the 5 being tested come from a special interest group, knowing if that could be the case or not depends on domain knowledge.
So, it is known that small samples of blood taken from capillaries will have a different composition than large samples taken from veins. Is it possible to write a test that compensates for the known differences? Or is it just known that they are so different that one can't be inferred from the other? Hard to tell, needs cutting edge domain knowledge.
The second example includes bias as a lead-in to the actual problems that tests of capillary blood need to handle.
To which companies of you refer?
That said, your "litmus test" is dangerous and should not be used. If you had talked to 100 cab drivers about Uber, how many would have said it's a viable idea?
Uber is actually WAY less viable than Theranos, because there are legal frameworks that made it literally illegal. Meanwhile Theranos is in a high-profit part of the medical industry, that is also (as you can see) regulated.
The issue is that Theranos is a scam. That's the only issue, not any of the stuff you mention.
Founder bravado exists because lots of parts of the world are stupid and wrong and done out of habit. Theranos isn't a scam due to bravado. It's a scam because it's not real.
If it "happened to be" real and not a scam, your comment could read exactly the same, except it would happen to be wrong instead of right. Your generalization about startups is entirely unjustified, and makes it that much harder for people who are not running scams to actually change the world.
Could I also venture a guess that you're not living in Silicon Valley? Your comment and others like it are the reason people don't change the world from the city you're living in, by creating a startup from scratch, but go and move to Silicon Valley to do it. If you have any examples of an Uber, an Airbnb, or a Tesla made in the city you're living in, go ahead and say it. These three companies have upended their respective markets (taxis, hotels, cars). You would have knifed them in their infancy, citing "founder bravado".
This literally impedes progress. People shouldn't have to move to Silicon Valley to be able to change the world.
None of this has ANYTHING to do with the fact that Theranos (and, to cite another example, that ultrasound charging company) are scams. They are scams ONLY because they're not real: not due to the opinions of the industries they're disrupting, and not because of bravado.
Don't conflate the two.
This person wrote:
>There seems to be this bravado among founders who believe they're sticking it to all the people who say something's amiss
which is a completely unfair generalization and hurts all founders, of all companies.
You raise irrelevant points. But to answer you, yes, there was a time in the past when taxi drivers would have argued that Uber is a scam, yes. I did a date-range Google search, and look at this:
"Uber Sued for Consumer Fraud and Unlawful Practices by Chicago Taxi and Limo Companies". (2012)
Consumer fraud means scam.
So, please, jacalata, I would like you to say:
-> "All right, Taxi cab companies did accuse Uber of being a scam, i.e. of consumer fraud, in 2012. The only difference between this an Theranos is that Uber was real and Theranos is not real."
I want to hear you say this, because of the part of the comment that I quoted, stating "There seems to be this bravado among founders who believe they're sticking it to all the people who say something's amiss".
I'd love for you to agree that that signal or litmus test is irrelevant, and the only thing that matters is whether it's actually a scam.
Theranos was actually a scam - it didn't really do what it claimed at all, for which it is under criminal (criminal!) investigation. It has nothing, zip, zero, zilch, to do with Silicon Valley or founders, or bravado, or what the industry insiders were saying.
Whether that is a feature or a bug I suppose is a different question.
SV has advantages for startups, yes, but there is a world outside of your little pond, you know. Ola, Alibaba, Amazon, Tencent, Baidu. Even VW and Ford have excellent EV alternatives to Tesla. If change could only happen in SV, it would also be limited to SV.
Based on some googling it seems it would take roughly 1.8 years.
If it doesn't follow any laws of physics, then there is no predictable relationship between any input and its action (since if there was such a predictable relationship, it would be a law of physics that the string was obeying.)
Don't ever expect someone who has gotten their hands on your money to voluntarily close up shop and give it back :p
They'll take it to the casino and bet it all on black, or siphon it off somewhere else before that ever happens...because all your money gone and them giving it back to you is the same thing to the person who no longer has it.
Maybe you shouldn't expect it, but I have seen a start-up or two that failed and that did exactly that.
And start-ups that fail have a whole pile of clauses triggered in the various shareholder agreements that count towards a 'liquidation event'. That's what liq-prefs are for and the immediate consequence usually is that the latest investors stand the best chance of getting some or all of their money back.
But just don't expect it...
On the other hand, if you're scamming consumers of course it is only a very small step to scam investors (and easier to get away with).
* Sunken cost fallacy (we can still make a come back!)
* Failure is unacceptable (returning money is accepting utter failure)
* Returning money means you no longer possess it or the power / reputation it yields (you will no longer get a generous salary for example)
* Returning hundreds of millions of dollars with a multi-billion dollar loss is a joke to begin with
That's the definition of sunk cost fallacy isn't it? It's seeing yourself as someone who lost $9B not someone who has $200M :) that was a good life lesson for me personally.
They may do so if forced by legal action; otherwise, its unlikely. If management can continue to spend other people's money pretending to try to run a viable business and paying themselves and their associates until there's nothing left to pay with, they'd probably rather do that that hand money back to investors.
I tend to see YC as being more "evolved" than other VC's, but I also think that these problems are more ingrained into the human condition.
YC could consider making funding contingent on all high level company officers attend or participate in some kind of ethics course. It could even be remote.
There could also be penalties built into VC agreements. If a company violates contracted ethical rules, then penalties could include replacement of staff, more shares being given to the VC, low share buyback prices for the VC, etc.
It could also be a two-way street. If YC violates some kind of ethical rule, then they could be punished by having to do something for the companies they represent.
Ethics are important but so far they have just been "best practices" in our industry and not something contracted and enforced.
Airbnb: The Growth Story You Didn't Know
Airbnb Cofounder Was One Of The Worst Spammers In The World, Says His Freshman Roommate
Go ahead and spam if you're a spammer, but be honest about it.
Most companies, and many large tech companies have shady practices, usually in the form of misleading advertising.
> YC could consider making funding contingent on all high level company officers attend or participate in some kind of ethics course.
Do you think those company leaders simply didn't know that what they were doing was unethical? I doubt it was a case of "whoops, who knew!"
A high-level executive gets caught bribing government officials (cash, jobs for relatives, etc.) in exchange for favorable treatment/contracts.
Company gets sanctioned, and ALL employees get to have regular ethics and conflict-of-interest training. Because obviously the rank-and-file employees are part of the problem. And I wouldn't be surprised if the executives don't actually receive/attend the training.
My fiancee works as a laboratory scientist in a hospital conducting patient sample testing, and her and her co-workers take their work incredibly seriously- checking, and re-checking their work, with complex protocols to guarantee the accuracy of their testing. It's disappointing to see that same attitude lacking in Theranos.
A Large software company that allowed user data to be stolen because of known security issues. Software company does not inform the public of the breach until forced to.
A large medical company that allowed a very large failure rate of testing devices from known issues. Medical company does not inform the public of the breach until forced to.
Ethics should be hammered in some people's head...
In Theranos' case, I don't believe the founder was necessarily this type of person, and she was probably delusional, but I don't find it surprising that they would be capable of lying to people's faces over a large period of time.
But when does "playing marketing games" become OK? Maybe for mobile games, but even then you have kids taking their parent's credit cards out of wallets and spending 100s... everything's important to somebody.
Clearly medical tech is extra important, and the consequences even more grave, but I hope this is a lesson to everyone that trying to dupe all of society sometimes has consequences.
And hopefully convince more people to do ... nicer things? Better things? Well, at least taking things seriously.
When it comes to anything that can affect your health in medical related capacities it's tough to say it's ever okay. But duping a 9 year old into buying $200 worth of bullshit in-app purchases? Also very unethical, in my opinion, but at least it doesn't directly result in inaccurate medical care which could easily lead to serious injury or death.
So ultimately I'm not sure it's ever ethically okay but that's probably going to depend on each person's definition of "playing marketing games".
To be clear, I agree 10000% with the action taken here. I would like for us to start applying this strict standard more often.
The sidebar on StackOverflow is great.
Funding for real fusion research is still difficult to come by because of the shadow of the cold fusion debacle...
There is a huge credibility gap in fusion research, due to no fault in the mainstream research community.
Did Theranos test for fatal diseases? Did they just test for mundane stuff?
I can only see one way this happened. Someone got a false negative. They would have gone to another lab but chose Theranos based on marketing claims. They get tested now and see their positive result for a terminal condition they can no longer treat.
Side note: Anyone else have trouble viewing the WSJ article? I had to read the full text through a private news outlet, even though I tried signing in to WSJ with Facebook :/
Edit: Added a sentence of detail to the last paragraph, for those who still can't see the article.
If you're talking about a different problem, sorry, no idea.
FYI, I am not the kind of guy goes around and preach about reform. But this shit is stupid as hell. I think major offense like these should be sent to trial or even requires congressional hearing and congressional punishment.
"Revocation of the laboratory’s CLIA certificate which, as dictated by the regulations, includes a prohibition on owners and operators of the lab from owning, operating or directing a lab for at least two years from the date of revocation" (emphasis mine)
If they rent the lab out to someone else, they're still the owner.
If they rent the lab from some third party owner, they're the operator.
Either way they're violating the terms of the ban.
I don't know the laws regarding this, but the title of the article states that Holmes can't operate a lab, not that Theranos is unable to. So it sounds like they are taking her to task rather than the entire company.
Revocation of the laboratory’s CLIA certificate which, as dictated by the regulations, includes a prohibition on owners and operators of the lab from owning, operating or directing a lab for at least two years from the date of revocation
But yes.. they really didn't care to expand on that at all... or explain how it would impact their business.
This does open the door to immediate shareholder lawsuits if she does not step down voluntarily.
However, my understanding is that Theranos has an unusual corporate structure that gives Holmes control of most of the votes, so if she doesn't want to leave, I don't know if anyone can force her.
Effectively this says 'Theranos as a company will not go anywhere until Holmes steps down, and after that the chances of it remaining in business are still extremely slim'.
They also invalidated all their Edison (their specific nano device) results for two years, and it turns out they weren't even running other people's devices correctly and had to invalidate results for that too!
Maybe there is little precedent, but that length of time seems a bit arbitrary (and too short?).
I think it's a case where the company had a certificate revoked as part of that process is a direct ban on the person in charge of said lab, which bubbled up to Holmes. I would've supported a direct levy on her but this just seems to be aimed at the company.
It wouldn't be the first time a valley business powers on and pays for noncompliance. I understand that Uber pays the fines it's drivers receive where it's service is illegal...
Specifically, when he talks about naughtiness, he says:
Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter.
I have absolutely no interest in trying to play language games - and maybe I'm misunderstanding what pg is saying, but it has always seemed to me that the judgement of whether the rule that was broken was consequential or not is post-hoc. For example: had airbnb gotten in serious trouble and floundered in the aftermath of when they started scraping craigslist for listings, they wouldn't be clever and naughty, but reckless and foolish. Had zenefits managed to grow even more or hire some key lobbyists and get the law changed in time, their CEO would be hailed as a visionary genius that cut through pointless red tape.
Anyway: the reason I brought that up is that a lot of the ethically dubious things that Elizabeth Homes did are very similar to things which a lot of tech companies did at one time or another. Trying to push ambitious young men and women to look at rules and regulations as something they should take pride in hacking and bypassing is a dangerous game - even more so in fields that are highly regulated.
Addendum: part of the original hacker ethic was to ignore stupid rules. For example, we take delight in Feynmann cracking safes at Los Alamos, or finding some clever hack to bypass a pointless procedure. However: I think it's one thing to hack a system to make a point about how stupid it is, but it's completely different if you add a monetary incentive, and suddenly the rules that get broken are those that stand in the way of you making money. The two sets have a fairly small overlap.
Addendum two: in a complex society like the one we live in, we have a lot of dumb rules. I'm not trying to defend them - we should obviously get rid of them, even in healthcare. A lot of economists have written intelligently about how to make the approval process of the FDA more agile.
Many start-ups are engaged in the "flout the law and make abnormal profits by hoping society evolves/decides in our favour" gamble.
Uber and Airbnb are two obvious examples, where I'm sure if a couple of people had died in transit, or a house burnt down and killed its occupants, and resulting cases went to court and they were found to have gone against transport/hotelier laws in a jurisdiction, then I imagine the course of such companies would be very different.
I'm sure we'll have more interesting case studies that I'm just not as familiar with as we have startups move into other heavily regulated but emergent/disruption ready/ambiguously policed sectors: see drug legalisation, communications/cryptography/security, financial services, legal services, health/pharmacy, etc as logical places where you'd expect to see these gambles starting to show up...
A relatively large number of YC companies had an ethics issue and (unfortunately) the 'naughty' bits have been used to explain these away. So YC evolved and put up a fairly clear-cut set of rules that they expect YC founders to live by.
Now, they were certainly exposed and shut down by regulators who are (often) more concerned about the rules that don't matter, but it's really uncharitable to imply he things that accuracy of medical devices is something that "doesn't matter".
>Had zenefits managed to grow even more or hire some key lobbyists and get the law changed in time, their CEO would be hailed as a visionary genius that cut through pointless red tape.
Not sure that's the best example to make your point -- I think that the Zenefits fiasco exposed something I didn't realize before, that we make brokers go through pointless training that doesn't teach them anything, and doesn't make them better at navigating ethical dilemmas, all because we tolerated fraudulent salesmen giving the defense that, "but no one gave me a training video that told me not to defraud customers!"