The media, though, never paid enough attention (or was possibly subverted by Theranos itself) to the naysayers.
These incidents ought to remind us the exponentially important role media plays in our lives and how important it is that we come up with a framework to penalize misleading journalism, while at the same time, preserving the independence of media.
Maybe that is the next social challenge for entrepreneurs in the coming decade.
This same journal was also one of her early boosters.
We already have a framework that preserves independence of the media, the First Amendment. All of the NDAs and Boies style intimidation and legal abuse and harrasment of the whistleblowers and journalists was only stopped by the First Amendment.
We already have a framework that punishes journalists - it's people like Peter Thiel suing them out of existence because he doesn't like what they say. It's big funders buying a newspaper and destroying it like the Denver Post. It's the government putting sources on trial and in prison like happened with the NSA stories. Journalists are murdered constantly for reporting stories. And the industry itself is dying because of changing business models. They dont need a framework to punish them any more.
None of your examples are journalists being penalized for lack of due diligence or for being misleading. I think your instinct to protect journalists given their importance and the threats they face is a healthy and important one, and I share it, but I don’t think they’re above reproach. Ensuring the independence and safety of journalists is of paramount importance; ensuring journalists are appropriately incentivized to report accurate stories with healthy skepticism is of secondary importance after that (since most will innately desire that anyway), but it is still also important.
Rolling Stone after the lacrosse rape case is one example. But more importantly, I think the point above is that journalism is in a vulnerable position where the carrot is more appropriate than the stick. Laws are crude tools for the most part, with lots of potential for collateral damage. It's like chemotherapy: you just hope the treatment kills the good cells slower than the bad.
Punishing bad journalism will have a chilling effect on all journalism, bad or good. It'll increase the costs of doing business by increasing liability insurance premiums. If the industry were thriving, maybe that would be acceptable overhead. But it's not thriving. It's teetering on the edge of collapse. So maybe we should find ways to identify and reward good journalism. Cultivate the flowers in the garden so they overshadow the weeds, rather than dousing the whole shebang in herbicide and hoping you kill what you intend to.
Great-grandparent didn't suggest that laws are the only possible option to penalize misleading journalism, you're jumping to conclusions. Elsewhere in this thread, I even suggest:
> [Disincentivizing misleading journalism] doesn’t necessarily require an oppressive Orwellian governmental body to dictate truth and punish journalists who veer from the party line. It could be as simple as, after the fact now that we know how fraudulent it was, naming prominent journalists and outlets and pointing out red flags that they should have but failed to highlight, and other similar ways they should have expressed a healthy skepticism but didn’t.
Yes Journalists need high standards of professional integrity and the legal air cover to maintain that.
But really the ultimate defence is us - to reject the mountains of crap out there and seek out and subscribe to the worthwhile news sources.
As ever, it's down to us.
I don't see how that obviates the need for journalists to be properly incentivized to report accurately and with healthy skepticism.
The economist comes to mind. Any others HN recommends?
I also listen to my local station (WUNC) and if you’re in a decently populated area of the U.S., your local NPR affiliate is also likely high quality (plus it’s easy to listen online if you’re not into terrestrial radio.)
I'd characterize it as, "journalists" using their platform to go after specific people they don't like. Thiel helping one of their victims who couldn't afford to mount a case without running the risk of ruining themselves if they lost. Seems to me like a really noble thing to do.
And yet Breitbart is still up. So this idea that it's just about enforcing the law rings a bit hollow.
No. The company was outed by people long before the wsj. The wsjalong with the rest of the media was the one that built theranos up because they wanted to push the feminism agenda.
The wsj stepped in and took the credit after the exposure/pressure on social media was going to break the story wide open.
It's similar to the nytimes taking credit and getting the pulitzer prize for breaking the weinstein story which they kept quiet for more than a decade. But once social media was exposing the story, the nytimes decided to release the story they kept quiet for so long.
It's like an arsonist who helped set a house on fire dousing the house with a glass of water after the firefighters put out the fire and pretending that they saved the house.
And lets not forget that if you criticized theranos or holmes, most of the media/journalists ( including those working for the wsj ) would attack you for being a sexist or a bigot.
This is not the most amazing thing, at all. I'm not surprised that "the media" with their limited access, didn't get the full story.
Rather, I'm more surprised about the informed investors, who invested a lot of money, and had access or at least the ability to push for it. How did they invest so much money in something with seemingly so little backing?
> These incidents ought to remind us the exponentially important role media plays in our lives and how important it is that we come up with a framework to penalize misleading journalism, while at the same time, preserving the independence of media.
I don't disagree with the sentiment about the media, but I think this is a singularly bad example - who cares what the public thought about Theranos - the public didn't lose money here.
I beg to differ. Straight from the article:
> Some patients were rushed to a hospital on the basis of erroneous readings, only to be sent home when their blood was properly analyzed by the hospital. Even worse, Theranos was using brutal intimidation tactics against its own employees to stop the truth from coming out.
I don't know about your location but American citizens pay quite a premium for hospital care. Imagine the potential for crippling debt all because of a test result which should have been known to produce false positives.
That's definitely the public losing money here.
When Stanford Professor John Ioannidis refuses to join your board because he refuses to give your product credibility that is a HUGE red flag.
This is a long way of saying that we may have created too many disincentives for large companies to IPO.
If you invest 100M you might as well throw another 10k at a prediction market if you're confident in yours and there are naysayers who would bet against you.
Rupert Murdoch put 125 million dollars into Theranos, so the press itself was invested.
This investment was only public after investors sued: https://www.smh.com.au/business/markets/rupert-murdoch-among...
Several people who have worked at Murdoch papers have told me that he isn’t above interceding in editorial matters, but in this case, despite his personal interest, he didn’t. A source who has known Murdoch for years explained it, “He’s a newsman — and a good story is a good story no matter what or who the story is about.”
As Carreyrou reports, Theranos definitely tried to pull strings with Murdoch, and apparently got nowhere with it. The WSJ timed the story to hit right before Holmes was set to appear at a major WSJ business conference.
Murdoch is a very skilled propagandist. He knew that trying to suppress this story would have backfired on him. Especially because the machines don’t work and because Walgreens would have soon learned the truth.
Nothing hurts a propagandist more than being really caught in an obvious lie. To protect his ability to slant the WSJ, Murdoch couldn’t have gotten caught suppressing this story. And he would have gotten caught if he tried.
Once the fraud was exposed and the company began winding down, spending would quickly slow down and that might have put investors in a better position to recover something, versus loosing everything.
On the other hand, it could simply be shrewd businessmanship. It's not like it was the reporting that made Theranos unviable. The tech would never work, it's just a question of time before the walls come crashing down. It's probably illegal for Murdoch to sit on this information while trying to sell his investment on to someone else (at the very least, inviting some nasty lawsuits).
Murdoch might very well have thought "Oh well, the investment is gone, I'll be damned if it isn't my newspaper to be the one to break this juicy news".
Looks to me that Murdoch acted exactly according to his long term goals.
Those guys were journos, not proprietors, but I'm pretty sure that if you could prove that a proprietor put heavy manners on the journos to do that, they would certainly be up for a criminal conspiracy charge, at least in Britain. Of course, that is typically a pretty big 'if'.
I seriously doubt he allowed Carreyrou to continue for the sake of good journalism.
By letting reporters in his hire just do their jobs, Murdoch probably gets privileged access to a great deal of secrets and speculations. Carreyrou's reporting could very well have persuaded Murdoch not to make further investments in Theranos, thereby saving him billions.
As the rationalists say, if you can explain anything, you can explain nothing.
I'm not saying he did it for good reasons. I'm saying it's plain that nobody here knows why he did it, and lack of knowledge is lack of knowledge, not license to just fill in the blanks with whatever you like. (Our brains are very good at that, and the careful person must be in a constant fight against that tendency.)
But jerf, I already know he's a bad person.
You are justified in using past history to do a certain amount of broad concluding (nothing as specific as the 5+ hypotheses given), yes, but bear in mind you are not justified in "A: Murdoch is bad B: Here's a thing he did C: I bet he did B for a bad reason because A therefore D: Murdoch is even worse than I thought". You are "spending" confidence when you do this, not increasing it. (Another very common cognitive error. Not sure I've seen this on any fallacy lists. Probably needs to be, and given a name.)
I was an election integrity activist. We were ridiculed, harassed, and in some cases jailed.
Of course, we were (mostly) right. But there's never a nod or h/t to acknowledge the pain and sacrifice.
And don't be fooled into thinking the sniffing salts are working. There's always another con, fraud, bubble. (In my case, all postal balloting, which is worse than the touchscreens.)
I think whistleblowers should maybe just bet on the short. https://en.wikipedia.org/wiki/The_Big_Short https://en.wikipedia.org/wiki/George_Soros#1992_pound_short
Got any more info on this? I'm in a state where all voting is done through postal ballots.
Because there's no second chance, admins have to adjudicate for voter intent. So they modify the votes in the database.
To protect the database, as part of the backup, the votes are tallied both at end and beginning of shift. That means a running vote count. Law is that votes can only be tabulated when the polls close. So admin's have the fiction of "summary reports" vs "tabulation".
Yes, admins peek at early results.
Another new threat to integrity is signature verification. But that's a whole topic onto itself.
The biggest mitigation would be to switch from brittle FPTP to robust approval voting and proportional representation (as appropriate).
This is FUD, to dust off an old chestnut, at least as far as Oregon is concerned.
Check it: https://www.google.com/search?newwindow=1&q=oregon+vote+by+m...
In the 2016 election, a potential 54 cases of voter fraud. Here's the breakdown of the kind of fraud (which amounts to .002% of ballots -- one in 38,000):
"Richardson said the suspicious ballots broke down into several categories: 46 voters appeared to vote in Oregon and another state; six individuals listed as deceased voted; and two voters registered in Oregon voted twice."
You’ve attended the canvassing board meetings?
You’ve audited an election?
You vetted the certification of the hardware, software, rules, procedures used by your jurisdiction?
You’ve collaborated with the nationwide network of admins, vendors, academics, and activists on these issues?
Can you refute anything I’ve stated?
Do you even know how your ballot is processed?
Did I say anything about fraud?
FWIW, you perfectly illustrate the challenges whistleblowers endure, so thanks for that.
It's on par with "you've inspected the rain clouds, you've watched the rain fall into the Bull run watershed, you've inspected the reservoirs, the pipes, done salinity and chlorination tests on your tap water?"
Voter fraud in Oregon is virtually non-existent, and all you can do is raise the spectre of I don't even know what. It'd be silly if it weren't so insulting, what you're suggesting.
have you ever audited an election... rolling eyes
Oh. You weren't asking.
You're mocking the notion that such a thing is knowable, that there's an objective reality.
I know. Facts, data, experience, critical analysis are all so unkewl. My bad.
Would you please (re-)read https://news.ycombinator.com/newsguidelines.html and post civilly and substantively, or not at all?
I don't want to go full Elon "the media is incentivized to penalize me in particular" Musk, but the ethical thing this reporter did was to was cancel the Theranos feature. A less scrupulous reporter might have been happy to run with it.
I mean, it's not worse than setting off a fire alarm and cancel every body's blood test.
That would require the existence of a group of people empowered decide what is the truth and what is not. Such groups have a really, really bad history. No thanks.
(The history of it is so bad that protection from such groups is enshrined in the Bill of Rights.)
Fixing that doesn’t necessarily require an oppressive Orwellian governmental body to dictate truth and punish journalists who veer from the party line. It could be as simple as, after the fact now that we know how fraudulent it was, naming prominent journalists and outlets and pointing out red flags that they should have but failed to highlight, and other similar ways they should have expressed a healthy skepticism but didn’t.
Why this obsession with penalizing people? Journalists might not know better. At some point one needs to take some responsibility in determining whether what they are consuming are actually reputable data sources or just cheap/free entertainment and hearsay, and one needs to realize that news outlets have inherent biases towards telling stories that are extraordinary or otherwise appealing.
Ultimately, shouldn't everyone be applying critical thinking and the scientific method to come to their own conclusions about the world?
I don't understand why this would excuse anything. Journalism is almost literally their about to (get to) know better about things and explaining to the rest of us.
At least, that's what it should be -- these days it seems to be mostly about generating clickbait. (Sorry if that's cynical -- I've just read Trust Me, I'm Lying.)
> Ultimately, shouldn't everyone be applying critical thinking and the scientific method to come to their own conclusions about the world?
Of course, but there's limited time to investigate everything in ultimate skeptical detail, and so we rely on others we trust.
Yes it's a bastardization of their profession, but everyone needs to eat.
Who knows if we'll ever get back to the quality of journalism in the Woodward/Bernstein era, when the large majority of middle-class Americans paid a monthly subscription to have professionally composed news delivered to their doorstep every morning.
I don't see it as an excuse, just as an observation of reality. Journalists can be misled by their sources. They may misinterpret data or make mistakes. They can have ulterior motives, or they may see the world through different glasses than you/me (e.g. conservative/liberal oriented news outlets). They may be pressured by deadlines to put out subpar quality material. There's noise amplification and echo chambers due to the role of social media. There are many reasons average journalism today might not be up to some standards.
The way I tend to think of it is: trust but verify. Some things matter directly to my personal life and it's in my personal interest to verify that I have the correct information about them. Why then, should I trust the (possibly exaggerated) interpretation from some WSJ journalist on some recent research paper rather than doing my own homework?
News about Theranos at this point, for example, is not one of those things that directly affect me or my family, and the accuracy and outrage of this story is of only mild entertainment value to me. Recognizing that, I can choose to consume news about it with the implicit understanding that I'm probably getting sensationalized editorials with no more value to me than a random hollywood movie, and not some data source that I should be investigating.
When you immediately equate all self-doubt with Impostor Syndrome -- rather than develop actionable heuristics to detect when said doubt is justified -- don't feign surprise when some people take it seriously. Maybe they were just fooled by your confidence.
("You" in the general sense, not you personally.)
Theranos, and other unicorn-scale hype, is a whole different thing. It doesn’t get this bad unless there is a seriously malevolent drive for the money, essentially saying that you deserve money just for an idea, just for being a made-up executive, regardless of all else, and you’re going to lie, cheat, intimidate, swindle, and unapologetically steamroll your way to the money no matter what.
It’s a technology narcissism problem.
Not mere overconfidence or being swept up in the hype while at least trying to genuinely build something even if it ends up not working.
BINGO! What a great term. I've never heard it called that before (which now seems hard to believe), but have definitely seen it SO many times before (specifically in massive corporate IT programs - the domain I work in as an enterprise architect). Did you coin this phrase? I'm so using this! Thank you.
I imagine young founders not wishing to be like Holmes could benefit from a rubric of sorts that helps classify this behavior. And for bad-faith founders who do want to behave like Holmes just without getting caught, talking more systematically about it would make it harder for them, limit their options.
What would be really cool is a modern version of Moral Mazes directed at startups.
There was also a thread here recently about how business culture values those who operate politically far more than it values those who are practical creators - how if you’re skilled at politics you can appear to achieve almost anything, even if you have no true useful skills.
Holmes was a kooky idiot scientifically, but a combination of huckster hubris, nrcissistic self-absorption, and political genius - greased by a comfortable upper class background - created a lucrative illusion of Cool Stuff In Progress.
She crashed and burned because there was absolutely no substance there. But if there had been some substance - not much, but just enough - she’d still be riding the PR wave and raking in the investor cash.
If someone like Holmes can become a billionaire by peddling nothing except lies and hope, what’s the real value of the software and tech industries if you take away the hype and money machines that surround them?
"Real value" is a tricky concept. What is and isn't real? Clearly societies have evolved (and are still evolving) to incorporate "dreams, future potential and hype inertia" into the equation, so anecdotally and tautologically, there's some value in that. Future considerations affect today's reality, so they're "real" in every sense of the word.
We don't know what exactly it is that captures the human imagination—a combination of history, ancestral stories, greed, a tangled mess of primal urges—but peddling improbable futures is definitely a well-established evolutionary pattern.
Dreams and ideologies are the rudder that helps civilizations steer away from local minima, overcome adversity and plod through suffering.
My point is that Holmes is a somewhat extreme example because her confrontation with reality was so head-on, so clearly falsifiable. But if you take away the "hype and money machines" en-masse, I suspect you'll end up with something that isn't human. It's all a house of cards. And it's nonsensical to discuss money, economy and value without humans, these are purely social constructs.
I think it was trying to say that if someone like Holmes (& board members) get rich this way (and it takes such effort to catch what they’re doing and bring actual consequences), then it in turn greatly devalues software labor.
Think of it this way: if people think this is a good strategy because it does work for various start-ups and even in this extreme case Holmes made over a billion dollars and it’s yet unclear what punishment, if any, it will be — why would start-ups care about actually building something, actually having engineers who produce things. This company made vast sums of money while not doing any of that.
It basically encourages a template for trying to print money with secretive refusal to explain the methods, and engineering hype. Which in turn makes being good at engineering worth far less to these people.
The more this looks like a viable option, the less valuable engineering skill is.
My point is that hype and chasing (improbable, stupid, exploitative) dreams are a spectrum, not a binary. Calls for appreciating "real value" (WTH is that? who defines?) and "removing hype" bring painful memories — it's not just a philosophical point for me, coming from the Eastern block. These feedback cycles are shorter than you think.
The objective function of what we should optimize for is unknown, but I'm sure 100% "honest engineering labour" and "good at engineering" and 0% hype would be a terrible, short-sighted, deadly idea. We need dreams and inertia to escape local minima, we need the collective goal correction.
That's the silver lining in this Holmes case too: the public debate brings about such correction. I voice the dangers of over-correction.
First, it is expensive and second which is most important, it takes time.
When a company is fundraising and investor likes a pitch they prefer to move fast in fear of missing out.
Generally, all the dead bodies are found during the first board meeting.
It is not that much different from just buying stock. No one actually has an idea if any of public companies are cooking books etc. You just wake one day and it is a huge write down.
Remember - the reason Theranos is news is exactly because this doesn't happen often, and one of the reasons this doesn't happen often is that investors are usually smarter about their investments.
This is why you mostly hear stories like "Oh, I tried [service] out once and it was actually pretty good"; it's a novelty for most and not worth paying for.
just look at post-soviet/eastern block media, we all have those (tv/radio) but nobody expects anymore true objectivity there.
Ummm, have you heard about Bitcoin? Hacker News recently removed a well-written article where Bill Gates and Warren Buffet explain, in very clear terms, why it's a bubble.
By the time I made it to the comments page, the page showed the article as flagged.
(Basically, anyone who understands distributed systems knows Bitcoin won't scale. Anyone know understands economics knows that a deflationary currency won't work.)
Look at Bitcoin for an example of where the experts are ignored.
Part of the problem, I think, is that the public loves (and wants to believe) the narrative of the lone genius who solves a problem against all the odds, and against all the people who told them they could not do it.
Links? Wasn't Holmes incredibly secretive about everything? It's not like she was promising overunity or anything, just a "radically new approach" type thing.
Holmes, while equally culpable, appears to be taking the entire fall.
I wonder what she’s getting in return - a cabinet position in a few years once the dust has settled, I’m wagering.
Social sciences are empirical sciences where knowledge of statistical controls and other tools needed to deal with the difficulty of laboratory research in the area of study are necessary as well as all those things necessary in any empirical science, so they don't have that effect.
OTOH, most journalists probably study journalism or other arts, not any kind of science, at the undergraduate level.
Were there? I'm not doubting your claim, just wondering if anyone really spoke up.
Reading about the challenges they would have had to overcome to back up their claims, there were some serious fundamental problems, and those were challenges the industry had been wrangling with when it came to that type of automated testing for ages.... I always wondered how many of their competitors were thinking:
"No way they overcame all that all at once.... straight up not possible."
Theranos' response included an all-company meeting where they chanted "Fuck you, Carreyrou" (John Carreyrou, the WSJ reporter who wrote the critical articles), and developeing a video game for employees that involved shooting him.
Notice that second article is only a couple months old and reports that some people there still believe the problem was not Theranos' lack of ability to do what it claimed, but that the media reported Theranos couldn't do what it claimed.
This playbook of "the problem isn't that our company is in trouble, it's that the media reported truthfully on our trouble" is still being used today by other darlings of Silicon Valley and HN.
Theranos in particular as if they had what they claimed, the media could poop on them forever and once they put out the product it would have changed the medical industry regardless of the media... but nope.
I can't recall of hearing of Theranos before then though, but I'm not in the valley.
Geoff Baird plays in my regular poker game. He's probably one of the smartest people I know and has been regularly denouncing Theranos' methods for several years.
NO one refuted it.
The issue is not that smart people didn't know, it's so many people can't see the obvious.
Assuming the comment is ordered correctly it's the masses with the problem. Valid concerns were raised, no one could defend them, but the comment was left at the bottom.
HN, like the media has flaws that don't allow it to correct at even a snails pace.
But if you're smart it's not hard to see the truth, hard part is making money, it was fake from the beginning but who would have thought it'd take so many years to fail in RL. Knowing when to bet against it is the hard part.
IE. Magic Leap will fail, who knows when though.
Been saying this since the beginning and just want to go on record with this again now in case this comes up 5 years from now like Theranos did.
I don't think she's a sympathetic figure in any way, but it's easy to see how someone could wind up in that situation without having started out as a scammer.
You can't know if you are going to succeed when you try to achieve a revolutionary feat. But you have to act like you are sure you will.
Imagine Jobs in an alternate universe, trying to get out the iPhone, but after years of failures and billions wasted, the world realize the product vision was unrealistic.
Basically him being the same asshole, but hitting a wall many predicted.
That would look the same as Theranos.
The difference is that Job didn't fail. But he couldn't know that before trying and commit many people and resource to it.
Imagine Elon failing as the Falcon X. Or worst, failing over and over until his company died because they lost control of one that went crashing into a school.
Imagine Zuckerberg called out about all the privacy issues on FB before it actually made benefit. I would have died.
When you try to achieve radical vision, you often either succeed as a hero or you fail as a vilain.
Honestly, this is what I understand least.
I can understand and even respect banking a company on "this isn't possible yet, but maybe we can develop new technology". That's a standard feature of legitimate biotech startups and drug research.
I can comprehend the snowballing risks, overstating a case because you think you're almost at something really impressive. I can't really understand the blatant, verifiable lies like "the DoD uses it", but it's not the first time we've seen those.
What feels new and totally baffling is to not even care what's being done and what's possible. There's no sign that Holmes or Balwani ever had any idea whether they were close to success. This wasn't just betting on horse races with borrowed money, it was betting on a dead horse because you hadn't bothered to check if it was still alive.
Replace iPhone with iPod and Apple never reaches this sky it's currently at. It the product that put it back on the map, open the itune cash valve and paved the road for the iphone flag ship product.
The situation is never _exactly_ the same. But you can see a pattern. And history is written by the victors.
> Theranos made VERY negligent statements such as the military using Theranos products(they did not).
Musk, Jobs and the rests lied as well, just on a different scale.
The scale does make it worse, but the mechanism is the same. If Theranos had delivered, nobody would recall this lie.
The options backdating scandal arguably involved criminal behavior, and the anti-poaching collusion between Apple and other companies was arguably illegal as well.
Not saying that Jobs was primarily a criminal, but he was involved in a fair amount of unethical behavior over the years.
It's all part of the perverse incentives involved with well-funded tech companies.
There is no real incentive to call out fraud. As an investor or a partner you might pass on a deal, but to go public with your concerns means risking a possible lawsuit, raising the ire of the people who are already on the bandwagon, being excluded from future deals, and being dismissed as someone who is out of touch and "not getting it."
Contrarians can short publicly-traded companies, so there is a financial incentive to call out BS, but for private companies there is very little upside in raising concerns publicly.
If you doubt this effect, contrast the number of articles talking about how blockchain is the future with those taking a hard look at blockchain's financial viability for specific applications. The former group are the ones being asked to speak at conferences and landing large consulting contracts.
I mean it's not a perfect system, but at least in the public markets, there is some financial incentive to expose deception.
$2.3bn in funding adds an immense pressure for it to be successful and perceived as revolutionary.
Theranos had contracts-signed, money-spent deadlines for things they couldn't provide (the Walgreens deal), and was selling further investors by lying about having their product already in use by the government.
At least publicly, Magic Leap has promised virtually nothing. They said in December they'd ship something this year, but there's nothing binding in that. Even in the worst case - the tech is literally useless and they spent all the money - it'd be a bad investment rather than fraud and breach of contract.
Not that I'm defending Theranos, they should have come out and said "We're running into issues" waaaaaay before they did and way before they put kiosks into Walgreens. That their diagnostic technique seemed impossible to experts doesn't disqualify them, but once they had failed to get it to work themselves, and yet assert that it does. That is when it steps over the line into fraud as far as I am concerned.
In the Carreyrou book, one clear example is the explanation of why Theranos couldn't possibly do "all blood tests" on a single drop of blood. On an individual test basis, finger pricked blood is different in chemical makeup from blood drawn from a vein. If you're testing for certain diseases, even assuming that you had equipment sensitive enough to find small concentrations of a target element or organism, the finger pricked blood may just not have those markers at all.
Secondly, blood testing is a destructive process. If a doctor orders an immunoassay and a pathogen test for a patient, it's close to physically impossible to run both tests on Theranos's much touted "single drop of blood". You would be using up portions of an already tiny sample to perform the reactions necessary for each test. The premise that you could do multiple tests on a single drop of blood was a false one from the start.
Third, the purported form factor of Theranos testing machines, a small Apple-esque box, created physics problems from the start. Proteins and cells in blood are hyper-sensitive to temperature. One of Elizabeth Holmes's subordinates literally repurposed a glue robot to perform the basic blood testing tasks that would normally be done by a human. Imagine trying to have a tiny robotic arm trying to pick up tubes of blood from a tray, and perform chemical reactions, all within a shoebox-sized machine. Trying to leave enough room for the robot to physically swing its arm, and maintaining an acceptable level of heat dissipation so as to not destroy the samples was a challenge that Theranos never solved. At a certain point, you're running up against basic laws of physics and the literal limitations of space.
Theranos didn't start with a functional prototype.
Where can I read about this?
I’ve seen very similar things at other science based/biotech startups. In particular, over-promising and misrepresenting the state of development. Quite often these companies are funded by traditional tech investors who don’t know how to do DD on science-based/biotech startups.
The difference with Theranos is that they messed with the FDA. They did consumer testing, and publicly raised their profile to the point where they couldn’t be ignored.
If they hadn’t started doing consumer testing with a device that essentially doesn’t work, I doubt we would have heard of them.
Most of the investors would be happy right-off the investment. Even with Theranos, I believe it’s only the smaller investors who are making a fuss now. Larger investors know the money is gone, and there’s not much point in suing.
Carreyou had two big revelations. One was that Theranos was not running blood tests on their proprietary machines, which were supposed to do finger prick draws. The other was that Theranos had submitted fraudulent validation data to the Center for Medicare and Medicaid Services (CMS) and state regulatory bodies.
They did a couple brazenly unethical and illegal things.
1) CMS subcontracts lab inspections to state regulatory bodies. When California lab inspectors visited Theranos, they physically blocked off the door leading to a floor that had the Siemens equipment, presumably to hide the fact that they were not conducting tests on their own proprietary machines. So, the inspectors never actually inspected the relevant labs.
2) Theranos violated "proficiency testing" guidelines. Proficiency testing is the practice of running tests on a sample with a known concentration/result, and comparing results. The spirit, if not the letter, of the guidelines is that you run the tests on the same equipment as would be commercially used. Thus, Theranos sent in fraudulent tests by testing using Siemens machines. This proficiency testing duping was what caused Tyler Schultz to send in an anonymous tip to the New York laboratory regulatory body, and led to his final decision to leave the company.
3) Theranos tried to claim with the FDA that its tests were "laboratory developed tests", i.e. they were unique tests that could not be compared to existing market tests. Carreyrou has a scoop in the book that Theranos benefited greatly from a bureaucratic power grab between the FDA and CMS. Both agencies claim some sort of regulatory oversight for the blood testing market.
At least initially, there were many in the FDA who were suspicious, and wanted to send inspectors. But, Theranos's seeming passing of CMS inspections allayed fears in the short term. It was after Carreyrou's first two articles (IIRC), that the FDA sent a surprise inspection.
EDIT: I also think that in the book Carreyrou mentions that a number of doctors in the Phoenix area, where Theranos was doing a test pilot of their finger prick tests, had filed complaints with the state or federal regulatory bodies. So, there were definitely people at CMS or FDA who were beginning to pay attention.
If what you meant was simply that the FDA launched enforcement action after the publication of the article, then my apologies. No argument from me there.
But if it wasn’t consumer testing, then I don’t think it would have been news, and the fallout wouldn’t have been as big.
So, we possibly agree. The fact that they started doing consumer testing with a device that didn’t work made this news.
However, similar kinds of lies/misinformation gets told to investors in biotech startups all the time. That they actually did consumer testing is what made this news.
But I don’t believe it was quite clear that the consumer testing was a fraud until just before the last round of “investment”.
I put “investment” in quotes because the last 100MUSD was kind of a loan, based by their parent portfolio... so they’ve effectively sold what assets they have.
So yea, consumer testing appears to have been fraudulent, and after that became clear publicly there wasn’t much further investment.
No, it was the other way around: the inspectors only got to see the STANDARD equipment, not the proprietary machines.
“AFTER ALL THE DELAYS, the partnership seemed to finally be getting off the ground in the early months of 2012: as a beta run before a full launch, the companies had agreed that Theranos would take over the blood testing at an employee health clinic Safeway had opened on its corporate campus in Pleasanton. The clinic was part of Burd’s strategy to curb the supermarket operator’s health-care costs by encouraging its workers to take better care of themselves.”
Carreyrou's first article was October 2015. I think the Walgreens stuff had kicked off by then too. The FDA probably took a while to deal with it. But by putting a non-working instrument in a consumer facing context they were clearly going to get involved at some point.
If they hadn’t done that, I don’t think it would have been a news story, or that legal action would have been taken.
This stuff happens relatively often, investors just right-off the investment (or otherwise try and dump it).
I think this alone would probably be illegal?
This is not to mention all the other shady stuff that Theranos did in pitching investors. E.g., falsely claiming that they had machines being used in the field with the US Army, and that Johns Hopkins had validated results from their finger prick blood tests. This would also seem to be outright securities fraud?
Carreyrou may have exposed Theranos, but the sheer amount of illegality at the company seemed to have been going on for years.
It’s not like suing the company gives them a desirable outcome. In fact it probably makes them look slightly more risky to companies looking for investment. Usually they just write off the investment and move on. Just like Rupert Murdoch did (sold it back to Theranos for 1USD).
Either that or they look for someone else to pump more money in or cash them out. I feel like that was the subtext of a lot of the conversations with board members/investors in the book. There was nothing they could do, except make the play look as good as possible and hope more money gets poured in and it either works eventually, or they get to cash out... so.. why acknowledge any of the issues?
i think it's much, much worse that customers, who relied on test results for important medical decisions were lied to.
Financial fraud is one thing, but potentially killing people for greed and profit should really land the folks, which are resonsible for such scandalous behavior in the slammer for an extended stay.
Socially shaming and silencing her critics by branding them as old-fashioned, sexist and unsupportive of female CEOs in tech by the media did not help the situation either.
"Theranos kept up the illusion that they were running a lot of the tests from finger-stick blood draws by hacking the Siemens machines to work with small samples"
No wonder they had so many inaccurate test results.
Theranos would dilute the finger stick draws, and then run them on the Siemens machines 5 times. In theory, you could then calculate the concentration, and adjust for the dilution. In reality, the diluted samples would have concentrations of the relevant cells and elements that were too low to pick up.
To “fix” this, they would do those 5 runs, then calculate the median. And, if you had 5 outliers in all different directions, they’d discard the run and do 5 again.
The fact that PhDs and doctors who swore the Hippocratic oath allowed this to go on for over a year is shocking.
Cue someone replying and telling me why I was actually the one that was wrong ;-) But the point is that even well educated people make really, really stupid mistakes.
I think I may be being a bit unfair to the scientists. Basically, Theranos was a hot enough startup that Elizabeth Holmes and Sunny Balwani would fire, demote, or marginalize anyone who made a fuss. Lifelong academics may have never had to deal with that kind of bullying/pressure before.
On the other hand, they had some pretty incredible scientific talent on staff. You would think that people who are highly cited and have a reputation to protect would have spoke up sooner. Instead, the first two people to make any kind of sustained fuss were two fresh out of college hires.
Such is the nature of competing in a status-economy.
Knowing how to work within the system is probably how they were afforded the chance to build this reputation int the first place. It's possible they were trying to do the same here but didn't realize the fundamental differences between the academic system and the commercial one.
Fresh college grads haven't yet learned how to "not make waves", which is a blessing and a curse.
That he actually managed to is great — for his investors — but it’s not a course of action society wants to promote.
How Musk will be treated after Telsa implodes will tell us a lot about how sexist our culture is.
I'd personally be going for the pitchforks but I don't see many others doing the same.
I have not followed Theranos closely but from what I have read they had no product at all. This would make Theranos completely false.
Musk may be over promising as to what his company can deliver with regards to number of units but he has a working product. This is something that has happened time and time again in all industries, if he fails than he is just another run of the mill failure.
Maybe Elon is over confident, over enthusiastic, short sighted, etc. but his vision is world class and world changing.
And he has delivered, consistently.
This goes to answer both your comment and (at present) the top comment of this post, which asks why people ignore a chorus of naysayers saying that what's being done is impossible. The entire mindset of the Silicon Valley disrupter--we're the plucky underdog fighting an established oligopoly by doing the impossible (at least for the established oligarchs)--is very ripe for an unethical fraudster to milk. Distinguishing between the two cases is not easy, especially given the tendency to believe your own hype and oversell your current capabilities.
You can buy a Tesla car today, strip it down, and confirm it works and isn’t a giant Potemkin village?
What about "Full self driving hardware"? I am pretty sure you are not going to find it there.
And people have bought them thinking that it (full self driving functionality) is just one update away...
I still see a claim about future functionality as a far different thing (even if they are wrong) than a false claim about existing functionality.
Exactly what makes this false claim. Imagine someone gave you a drug and claim that it can cure cancer. It would be a false claim, even though it is possible that in future, it might turn out to be capable of curing cancer, by some specific method of application. The only problem is that that method is unknown today and no indication that such method might actually exist..
So just because in theory, you can strap on two forward facing cameras and call it full "self driving hardware" (because that is what humans have). Would you consider it legit?
If Tesla believes, in good faith, that their hardware is sufficient to enable full self-driving, them it is not fraud. They might be wrong. They might even be incompetent, but that's not the same as fraud. Obviously, if they do not believe their hardware is sufficient, then it is fraud.
Now, if Tesla sold you a car and told you that it is capable of fully self-driving right now, that would be indisputable fraud, because this claim cannot be made in good faith. This is what Theranos did. They did not claim that they had a potential solution. They claimed they had a completed product.
As you said earlier that "no one has an actual list of the necessary hardware". And if that is true, claiming that "our cars have full self driving hardware", is nothing but a big, fat lie.
That is like selling a computer by saying that it has "full stock prediction hardware".Oh, I am not a fraud because I sincerely believe that my computer can see into the future. It just needs the right software. Oh believe me, I make this claim in good faith.
What a crock of shit.
You insist on assuming that they are operating in bad faith by making a prediction and you keep giving bad faith examples as metaphors. If I sold you a car and told you that a future update would automatically dim and brighten the headlights based on whether the road was empty, would that be fraud? Assuming your car came with what I believed to be sufficient hardware capabilities to pull this off, this isn’t a bad faith claim unless I do not intend to deliver.
You have said it yourself that no one know enough to make this assumption. How can Tesla then make this assumption?
Your argument boils down to being unable to predict the future with 100% accuracy. Most people don't consider the constraints of reality to constitute fraud.
In other words the company is as genuine as the quack around the corner who sell cancer cure...
Complete quacks, right?
I have nothing else to add. Thanks for the laughs.
You mean, computer?
It is too difficult for a layman to figure out which ones, if any, are legitimate. It requires months of studying to have any idea. Even some of the brightest folks in Crypto (like Vitalik Buterin) seem to avoid talking about other groups (like Cardano), I'm guessing because it's just so damn hard to figure anything out with any certainty. And I think this is intentional on the part of the newer ICOs, because they are largely scamming everyone.
What is Vitalik going to say - "I don't understand Cardano"? That wouldn't go over well.
My coauthor and I wrote about this in our book Meltdown (Published by Penguin Press in in March). We drew on Carreyrou's excellent reporting and some pretty interesting research about how team diversity affects decision making.
Yeah, it's pretty clear that it was by design.
Moreover, Holmes seems to have known the impossibility of her claims, or perhaps, was over confident initially about the possibilities of technology and later came to the realization that current technology cannot fulfill her vision.
At that point, she should have come clean, but chose to continue the charades.
E-Bikes coming into the 'cheap as chips' bucket because of a dotcom oversupply, thats good for any city which has 2-stroke fuel nightmares. I've been in China before and after the e-bike craze, and the difference is marked.
Its better with e-bikes.
But as signifiers of 'it was a craze' -sure, Tru dat.
I prefer a $50 chair from office depot...
What does that mean? The height is adjustable. At full height you still find it too low?
There was zero indication that they had actually overcome any of those issues.
Everything else is pretty standard SV startup stuff.
The media is of course the first one to blame for this but also all the PC shit that people endure.
Not once in that period did anyone really impart lessons of integrity and hard work. At best, I encountered adults (specifically, teachers) who went out of their way to impede my success, but I usually overcame that. Through that period of my life, I can count the number of people who had a positive influence on my personal development on one finger.
I came into my early 20s a combative, arrogant asshole who couldn't really achieve anything and it took almost a decade and significant hardship (including brief periods of homelessness) to undo that.
That's not to empathize with Holmes or her fraud, but if I have to be honest, a lot of the "intellectual elite" (in tech) that I encounter think that their shit doesn't stink.
Edit: Oh yeah, this feels appropriate.
It’s partly “fake it until you make it”, “double think” and a certain lack of understanding of the basic technology.
And investors reward that behavior mostly investing in a persons connections and projected confidence. Theranos raised hundreds of millions of dollars, and they’re by no means the only company like this. In fact, many of them do manage to fake it until they make it and become successful.
Or maybe it's just that a billion dollars can make a lot of people re-consider their values.
What system are you using?
And if you think that's crazy, you haven't read enough history.
As someone who has followed the whole thing closely, Holmes and Balwani are snakes, and their fraud is undeniable. The tech is so "revolutionary" that they weren't even using it, they just hacked competitors machines to use smaller samples, accuracy rates be damned.
I know! Just read the history of cold fusion and perpetual motion machines:. The establishment and government didn't allow these either :-)