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Elizabeth Holmes' Final Months at Theranos (vanityfair.com)
99 points by exogeny 62 days ago | hide | past | web | favorite | 71 comments



So many unbelievable parts, but this one stood out to me:

>She tells former colleagues, according to the two executives, that she is greeted by well-wishers on the street who are rooting for her resurrection.

That says it all. Beyond the fraud, beyond the obscene breaches of fiduciary duty, it all basically reduces down to a severely delusional person, operating in an environment where delusion in it's more acceptable forms is seen as a positive attribute.


We shit on Holmes all the time, but sometimes I wonder if she's really so different from the average tech CEO/founder.

Consider that the requirements and circumstances are totally different in our industry vs. hers. She has to do a shitload of testing, she has to wait years... but our M.O. is to move fast and break things. Could you imagine being in her industry, and having the patience to go through years of trials and testing and passing through regulations?

She seems to have some good qualities needed to be a founder: believing in yourself to a delusional degree, being good at getting money an getting people to believe in you, etc. Maybe if she was in our industry, she could have been quite impressive and successful in running a company.


> I wonder if she's really so different from the average tech CEO/founder

She hired Steve Jobs’ right-hand man. He quit because she was too abusive and too delusional. It’s fair to say she’s fundamentally different from any competent CEO, ignoring the fact that she chose to deploy medical devices to the field.


If anything the Elizabeth Holmes story should be a lesson as to the problems with venerating the average tech CEO and the whole "disruptive" culture. She and her partner Sunny lied, bullied critics and employees, and put people in harms way - all for a technology that was essentially nothing more than the existing standard fare in a pretty box. No different what most of the major tech companies and start-ups do every day. But the standards for the medical industry as significantly higher than in tech thus she and Sunny are being punished.

Maybe instead of trying to lower the standards of the medical industry, we should raise the standards of the tech industry.


>Could you imagine being in her industry, and having the patience to go through years of trials and testing and passing through regulations?

I have worked at two reasonably successful healthcare startups. No 'unicorns', but they paid good salaries, made money, and were purchased for a decent price by bigger players. We waited. In the meantime we sold to researchers and performed LDT's (as Theranos did) to bring in revenue.

You do your work and put in the time. There is no other reasonable option. We didn't require a lying, arrogant CEO to pull it off.


I think you make a good point, and broadly agree with you. I think the problem with Elizabeth Holmes (vs. the traditional tech founder) is that she's in biotech, where the stakes are much higher and the industry is much more controlled. It'd be the same if she was in the aviation space. If she ran a SaaS platform, this wouldn't really be a story - it'd just be a crappy place to work, and a service that's not ever properly implemented, and there might be some level of fraud at a financial level, but nothing as bad as what she did. A business CRM breaking is bad, but not as bad as giving inaccurate medical results to someone leading to a misdiagnosis or worse.


That is the part that is craziest to me. They took a software developer (Sunny Balwani) who had an information systems degree and plopped him down to run a life sciences company like it was nbd.

I think a lot of technology people don't understand the scope of regulatory and medical implications of working in life sciences. It's not just simple as "code it up and flip the switch!" Theranos isn't the only firm I've seen crash and bail due to that cavalier attitude.


Yeah, although they didn't crash and bail but just get penalized a bit, 23 & Me didn't really get that they actually had to obey FDA rules for genetic testing. They literally ignored the FDA's complaints and were eventually stopped from making diagnostic (rather than ancestry) analyses for a while.


There's a big difference between the tests from 23andMe and Theranos. 23andMe produces data that's risk-based (i.e. your risk of developing coronary heart disease) but isn't immediately actionable. Most of what you could do to address the risks reported by 23andMe is stuff you should already be doing -- eating healthy, sleeping more, exercising, quitting smoking/alcohol.

Theranos was doing standard lab tests, like blood electrolytes. Blood electrolytes are highly regulated by the body and are only abnormal in serious medical illness. If your blood sodium level is too low (hyponatremia) that's a medical emergency and you need to be in the ER (hyponatremia can indicate end-organ failure like renal failure, heart failure; it can also indicate serious endocrine abnormalities like SIADH or too much water intake 'frat-boy' syndrome). Uncorrected hyponatremia can lead to permanent neurological disease (classically brainstem herniation).


I think the differences between the two industries are a bit overplayed. It's not like shitty software is any better, any more deserving of existence, than shitty blood testing machines. My best conjecture says she would've made shitty software and played it off using the same hollow puffery.


I actually do believe that people would have been rooting for her, albeit perhaps not stopping her on the street (but maybe! Especially given her distinctive poloneck uniform). Redemption stories are popular, particularly in the Silicon Valley mindset where failure isn't bad as long as you learned something from it.


Failure from an honest effort and failing due to making up stuff out of thin air and then committing a series of serious frauds, resulting in at least one person's death, is quite different.


>Despite their unequivocal role in upending our democracy, Zuckerberg and Sheryl Sandberg still run Facebook. Dorsey is still the C.E.O. of Twitter, even though he has not been forthright about the number of bots on the service, and has done almost nothing to stop the spread of hate speech on his platform. The C.E.O. of Tesla, Elon Musk, has been charged with securities fraud, and yet he’s still running the company

The CEO's mentioned in the quote above operate at demonstrably higher level of competence than Holmes. The article kind of jumps the shark with this bit.


I also didn't like the tone, lots of assertions without much backing.


I've read the book by Carreyrou - Bad Blood [1] and up until this time, I am left wondering if she really was insane, or on the firm belief that she can revolutionize something.

For her to be able to convince a lot of people - companies, investors, CEOs and perhaps a multitude of bright people to do what seems to conclude as a big fraud is still mind boggling to say the least.

You got the best engineers, doctors, laboratory technologists, medical techs, pharmacists, and just about everyone in science, and yet they continued for so long on this path of bizarre development of a product. Why did these people only realized when it was too late and that everything would crumble down at some point? They must have shared her vision with an intensity that has out shined their conscience and common sense.

[1] https://www.gatesnotes.com/Books/Bad-Blood


"It is difficult to get a man to understand something when his salary depends upon his not understanding it."

-- attributed to various sources; see for example: https://quoteinvestigator.com/2017/11/30/salary/


It seems her family connections had a major role in convincing people to go on board. In retrospect , her public appearances, including the turtlenecks, the deeper-voice-training, her public talks where she pitches the 10000 hours bs, should have rang a few bells about not only her intelligence, but about her sanity. Makes one also wonder what was the quality of the engineers she employed. The one who eventually spoke out was the nephew of one of the investors, i.e. someone who could afford to do so (and who presumably cared about his uncle).


I read the grandson was originally scolded and blackballed by his grandfather. Including surprise visits by Theranos lawyers at his grandfathers. Only after his claims were corroborated by others the family reversed course.

Power and connections, get the right people to buy in and you can do almost anything.

>In the past year and a half, the grandson and grandfather have rarely spoken or seen one another, communicating mainly through lawyers, says Tyler Shultz.

>Mr. Shultz says lawyers from the law firm founded by David Boies, one of the country’s best-known litigators and who later became a Theranos director, surprised him during a visit to his grandfather’s house.

They unsuccessfully pressured the younger Mr. Shultz to say he had talked to the reporter and to reveal who the Journal’s other sources might be. He says he also was followed by private investigators hired by Theranos.

[1]https://www.wsj.com/articles/theranos-whistleblower-shook-th...


Also strongly recommend the Dropout [1], a podcast following Holmes and Theranos.

[1] http://abcradio.com/podcasts/the-dropout/


Is this podcast narrated by Rebecca Jarvis?


It's strictly FOMO. As they say with VC's: Nobody wants to invest in you until one VC wants to invest, then everybody wants to invest.


> For her to be able to convince a lot of people - companies, investors, CEOs and perhaps a multitude of bright people to do what seems to conclude as a big fraud is still mind boggling to say the least.

It's not that mind-boggling honestly. We're overloaded with information and have too little pertinent information (and information-gathering time) to make informed decisions. The most dangerous people in society right now are people who believe in their own bullshit. Their absolute sincerity is enough to dupe people and part them from either their money or their influence.


And amidst all that ... it appears they solved NONE of the problems associated with producing the product promised.

Everyone went along and yet there was nothing of value.


I’ve never understood what the real world-changing part of Theranos was. Ok great you can do lab tests with less blood, is it to save people squeamish about larger blood draws? Maybe I don’t understand it but this always seemed silly to me and more about convenience. The disruption was about replacing phlebotomists? We make plenty of blood.


I think the idea was that blood testing could be done on a significantly larger scale and that somehow would pay dividends health and otherwise wise. You'd be doing blood testing for almost anything then. You can insert what you feel that might be. You're not wrong as the questions start to mount there.

Still significantly more tests, with less blood, at way cheaper prices could earn them a ton of money, of course they couldn't actually do any of that.


Elizabeth’s impromptu pitch about how her novel way of testing blood from just a finger prick could help diagnose and treat wounded soldiers faster, and potentially save lives, had found a receptive audience in the four-star general. - Bad blood.


It can be a real PITA if you have to do regular bloods. At one point I had to take an extra day off a week before my regular clinic just to do bloods. It can also be a time consuming process to find a vein and draw blood.

If I could pop into my local GP (family doctor) or have a mobile service come to work and quickly do the tests id be saving a lot of annual leave


I believe Holmes' claimed their eventual goal was to eventually enable people to have their finger stick blood testing devices in their own homes.


more tests with fewer draws. getting people to have blood tests is a lot of work, if you reduce the number of times you have to do it, the number of tests people get goes up.


well if there was a device you could buy to do the tests at home i d buy it for sure


A lot of comments about Theranos not being different from other start-ups and Holmes being like other CEOs. I disagree. Theranos was an out-and-out fraud from its beginnings. They knew their product did not work and was unlikely to ever work yet they kept on pushing it to investors as well as firms (Walgreens, Safeway). What is so disturbing is that their defective product, when used by naïve people without medical supervision, could report both false hits as well as missed. The former causing unneeded concern and anguish, the latter, resulting is not receiving needed treatments for something that would have been detected with real blood tests.

A CEO lying about some unneeded product or service, while bad, does not come close to lying about a product that can impact one's health and well-being. She and Sonny both deserve substantial fines and jail time.


I think it’s wrong to say they knew it would never work. They tried quite hard to make it work, they just never had the breakthrough they expected and the CEO had already sold the world on.

That part I find quite like many other startups where the CEO will gladly go on stage saying “we built this amazing app, that does X, and will be launching in 2 months!” And talking to the coders will have them saying “yea he didn’t decide we should do that until last week, so we havn’t actually started, we still havn’t finished The first model he pitched.”

The main difference to Theranos is then that mostly the software promises are just a question of time(AI promises excluded), where they actually had a big unknown in basic feasibility.


The company was not a fraud from the beginning. Tim Draper invested before a product was "ready" or FDA approved.

Let's not forget that the FDA gave Theranos a CLIA waiver to sell this thing outside of laboratories.

The CEO lied but the regulators failed massively here as well.


I just finished reading Bad Blood and it details how they went to extreme measures to ensure that the FDA never saw their Edison machines like barring entry to the lab on the day of an inspection, putting security guards in front of the door, and lying when asked what was inside.

While the inspector could have pushed the issue, I don't think they 'failed massively'.


The inspector didn’t inspect anything. That’s a massive failure on their part.

How else can you reasonably assess the work of someone titled “inspector” when they fail to “inspect”? Especially when they approve a device they haven’t “inspected” as an “inspector”.

If you see logic in calling them something other than a massive failure then I’d like to understand your thought process.


I don't understand your point. Draper and the FDA were fooled by it, therefore it wasn't a fraud?


One interesting definition of sanity is “the relentless pursuit of reality”. If this definition holds, then Holmes is clearly insane. A long prison sentence might motivate her to begin a journey on the road to sanity, but I doubt it.


I recently read “A First-Rate Madness” by Nassir Ghaemi [1]. Although it focuses on mental illness (or the lack thereof) in historical leaders during times of crisis, I saw many parallels with tech leaders and their companies at different stages.

[1] https://www.penguinrandomhouse.com/books/305742/a-first-rate...


Elizabeth Holmes deserves to be sacked by the full extent of social and legal punishment. She's poisoned the waters for a lot of good people - especially professional women engineers / entrepreneurs.

As engineers and entrepreneurs alike - we need to show that regardless of your history, wealth, gender etc. this kind of behavior is not okay and will get you blacklisted.


I do wonder if we're doing society a disservice by wanting "powerful women" to happen so much, that we abandon all reason. I'm not a big fan of how we put "powerful people" up on a pedestal in general, and our reverence for leadership/ management. These things need to happen organically, and these people need to be relentlessly criticized for this type of behavior. They have power, so they aren't. This isn't limited to Holms, it's been a big problem with Steve Jobs and Elon Musk as well.


I agree, I think the fact that we laude those with money or power on a pedestal based on immutable attributes is a problem.

Just as many imply money with power and evil - but seem to make passes for their favorite actors or celebrities.

I think we'd be in a better place if we could accept as a culture that gluttony in money and power without reason, irregardless of what someone thinks is "enough" money, should be met with criticism agnostic of race, gender, etc.

My only caveat is for people to assume that anyone with more money than them - moreover anyone who owns a business is "evil" by design. This seems to be one the more present falsehoods of Hollywood as of late. IMO, to take the potential gains out of act of taking risk to build something is wholly un-american. I think making more public those who fail in business or make huge sacrifices more present in media would help this. I only bring this up because the general public seems to tie certain attributes to people they're "okay" with being successful and others who they deem evil just because popular media told them those people don't "deserve" their success or wealth. Et al - the farmer in Iowa or small business owner in Chicago making $250k +.


This piece makes lots of interesting points.

"If You Watched This Elizabeth Holmes TED Talk From 2014, It Was Clear She Was a Fraud From Day One"

https://www.inc.com/john-brandon/the-truth-about-theranos-ho...

Indeed - lots of fluff and buzzwords, without much substance.


> lots of fluff and buzzwords, without much substance.

I'd say that about the majority of TED talks that I have seen.

What would that talk have looked like if they had the successful, proprietary solution that they claimed? I'd argue that it would not be all that different.

Trying to do scientific due diligence for proprietary technology via analysis of PR seems to have incredibly poor signal to noise.


I respect the journalist here, and the Theranos story is endlessly fascinating, but I'm kind of underwhelmed by the content of this particular article- It kinda makes the "final months" at Theranos sound really boring...

...besides a heavily-played story that she brought a puppy to the office, was there really anything in this article that wasn't already covered in better ways in previous articles?


Had a nice LOL at the dog relieving itself while they met with Kissinger. Anyone who remembers the Vietnam War would probably laugh even harder!


It's not surprising that she lied to everyone. Lots of people lie all the time. It's amazing that people BELIEVE her.

I just don't get why people are convinced by these pathological liars whose only skill is confidence?

Con-men tell people what they want to hear. It's not shocking that she is a con-man, it's shocking that she was able to con people who are so rich and powerful.

I remember her Forbes article and I was like "there is something wrong here". It takes DECADES to make breakthroughs in medical science and she did it in as a 19 year with a couple of into to bio classes?

If could have shorted Theranos then, I would have.

The only good thing about this is there are a few horrible people that lost a lot of money investing in her, so that has been entertaining.


I'm not sure why it's hard to understand why someone could be convinced by words that match their bias backed by confidence. That's sales 101 and there's a reason why it works.

Now, yes, the medical breakthrough part should have been a red flag to serious investors, but my guess there is that once someone bought into it, other investors were scared that they might miss out on what could be the next big thing and jumped on it.


It's hard for me to understand because after I was about 19 years old, I learned to not trust people who tell me everything I want to hear.


It's not about yourself, but about understanding others. People grow up differently, have had different experiences, and hence have different risk assessments on who they trust and what they're willing to lose when that trust is misplaced.


This entire story makes me much more curious about the enablers of this kind of behavior i.e. the investors and not Holmes herself. Are the big investors really that incomplete or "naive" in their diligence if pumping a big sum like $50M or more ?

If I was in that situation (i.e I was a VC), I would at least ask for a working demo of their tech (where I was present to see it go through even if that took an entire day) along with corroboration of their results with conventional tech before I decide to give them a dime. I mean I did this even when I invested just $15K as an angel investor in a company long time ago.

This seems obvious to me - why isn't this a thing for big name investors?


> Are the big investors really that incomplete or "naive" in their diligence if pumping a big sum like $50M or more ?

Her early backers were big-name individuals. Not firms. The healthcare VCs (e.g. Annie Oakley) passed on Theranos.

The deeper question is to what degree are David Boies, George Schulz and others who actively suppressed whistleblowers complicit in her crimes.


Are you saying the question doesn't apply to individuals? IMO it should probably even more so. I guess you have to be insanely rich to not actually care about a $xxM investment and related diligence.

And maybe it highlights an interesting lesson: it's much easier to hoodwink individual investors with charm and lies and Holmes nailed that part down to perfection.


> the question doesn't apply to individuals?

Institutional investors have an institutionalised diligence process. Individual investors have their own diligence process. For some, it’s nothing more than a gut check. (Which is okay. There are plenty of successful companies that were founded on checks written on a gut feeling.)

The bigger question is why a few of those people kept doubling down, to the point of attacking whistleblowers, after they had enough evidence it was a scam.


In my experience, early stage technical due-diligence, especially by individuals, is non-existent. It is mostly based on personal reputation and connections.


The podcast "The Dropout" does a great job of telling the story of Elizabeth Holmes and Theranos: http://abcradio.com/podcasts/the-dropout/

I get the feeling that she is a lot like Steve Jobs 'pre-getting fired from Apple'. Mercurial, unrelenting, quick to lie, charming.

The "greatness" we remember of Steve Jobs comes after a decade long process of humbling and nearly losing everything at Pixar. Even then I wouldn't have wanted to be around him.

(This comment brought to you via my 2015 Macbook Pro. Thanks Steve).


I think the lesson to be learned here, obvious though as it is, is that there doesn't seem to be any difference in the early stages between startup ideas that are delusional, which seems to be case for Holmes, and those that are "frighteningly ambitious" (http://www.paulgraham.com/ambitious.html). The execution determines which is which.


> the lesson to be learned here, obvious though as it is, is that there doesn't seem to be any difference in the early stages between startup ideas that are delusional, which seems to be case for Holmes, and those that are "frighteningly ambitious"

At the early stages, sure, there’s no difference. Genius and madness are only differentiable with hindsight.

At the point you’re rolling out broken medical devices, lying to investors about the Army buying your kit, and deploying unthinking attack dogs like David Boies and George Schulz on whistleblowers (one of whom was the latter’s grandkid), there is a huge difference.


I think perhaps there isn't any difference in external appearance between the two, but internally the difference should be striking. And an organisation like YC should have enough visibility into the internals to know which it is.


The distinction is usually painfully obvious to people who understand the field.

But, in this case, Holmes wouldn't pivot to more reasonable products that fit into her vision. It looks like her scientists did rather excellent work and made great incremental improvements in the blood testing field. Had she capitalized on those improvements; we'd see her as a success story.


I've been trying to figure out if Theranos had produced anything of value. Do you have sources you can share that describe these incremental improvements?


Read through "Bad Blood" by John Carreyrou. He describes a lot of the research that went on by Theranos engineers.

There were attempts to do good work by people who believe in the vision.

Now, to put things in perspective, if you're anywhere near or over middle age, you've probably had blood drawn. It's freaking scary every time the needle is pushed in for me, and I frankly had to flat out reject my doctor's request to get blood tests every 2-3 months. (I got a second opinion.) If these tests could be done with a much smaller amount of blood, things would be much easier. I'd be much more willing to run into my local CVS for whatever test my doctor wanted if the test involved a lot less blood.

That's why the engineers believed in the vision and did a lot of good work to try to lower the amount of blood needed for tests.


It may be that, especially in the early days, "getting funding" is equated with "success", regardless of (or perhaps even in spite of) any actual results (product shipped, customer count, revenue, product/service results, etc). At some point those results matter, but we still have this notion that getting funding (or just lots of revenue) is a direct indicator of actual success.


https://news.ycombinator.com/item?id=6349349 - Theranos discussion from 2013. Fun read.


The most spot-on comment is second from the bottom, of course :)


they shouldn't be comparing theranos to facebook or twitter. Theranos is another level of wrong-doing that far outpaces the minor inconveniences of FB and twitter.


Does anybody know if there have been, or there should be, any consequences for members of the Board of Directors? Talking about Kissinger, Mattis, William Perry, etc?


There is a very common pattern here with both Theranos and Fyre Festival. The CEOs were both charming and charismatic leaders. The problem is the one's who do it best tote the line of being a great sociopath or a great leader.


There was also a huge element of "fake it till you make it" with both of them.


Very true and a common pattern in Startups and even large companies. Sell what you don't have. Not sure it works out all the time, but it has for some.


I believe most enterprise shops sell what they don't have. But they also know by the time the customer is ready they'll have it built & ready. The customer is also aware of the current state and timelines.

For theranos and fyre festival. I'd say it was less playing timing to their advantage and more fraud.


NPR has a great podcast on Theranos called The Dropout. There seems to be a growing trend that it's ok to fake it till you make it...consider Theranos, The Fyre Festival, Trump.




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