It is ludicrous that Theranos' punishment for all their fraud was merely paying a fine.
We need to resume prosecuting the individuals who commit white collar crimes. Otherwise, getting caught committing crime just gets budgeted into the business plan.<p>The book <i>The Chickenshit Club</i> does a good job highlighting this (fairly recent) problem with US justice.
<a href="https://www.nytimes.com/2017/07/05/books/review/the-chickenshit-club-jesse-eisinger-.html" rel="nofollow">https://www.nytimes.com/2017/07/05/books/review/the-chickens...</a>
"America’s Top Prosecutors Used to Go After Top Executives. What Changed?"
The author of this book, John Carreyou, was apparently public enemy number 1 at Theranos. Theranos both dedicated time at an all hands to chant "f--- you Carreyou" and developed a space invaders like game where players could shoot pictures of his head.[0] It does put some of the more... unflattering descriptions of Balwani in the article in context. For someone who was so viciously attacked and ultimately vindicated on his bearish view of the Theranos it's understandable.<p>[0]<a href="http://www.businessinsider.com/theranos-employees-made-space-invaders-game-where-you-shoot-journalist-that-exposed-startup-problems-2018-4" rel="nofollow">http://www.businessinsider.com/theranos-employees-made-space...</a>
> Like many people who met her for the first time, Beam was taken aback by her deep voice. It was unlike anything he’d heard before.<p>Someone pointed it out the other day here, and I thought well that's just silly. Then went and listen to some videos and it is kind of freaky. It's like she deliberately changes her voice, but it sounds worse and obviously fake.<p><a href="https://www.youtube.com/watch?v=YecjzEScXqU&t=105" rel="nofollow">https://www.youtube.com/watch?v=YecjzEScXqU&t=105</a><p>Here she forgets to fake it for a while:<p><a href="https://www.youtube.com/watch?v=rGfaJZAdfNE&t=403" rel="nofollow">https://www.youtube.com/watch?v=rGfaJZAdfNE&t=403</a><p>I'd think someone should have mentioned it to her. But given the culture in the company I can see what was going on. She could have showed up with a lampshade on her head and nobody would have said anything either. After a while there is nothing to say to someone who does stuff like this:<p>> Still visibly angry, Holmes told the gathered employees that she was building a religion. If there were any among them who didn’t believe, they should leave. Balwani put it more bluntly: Anyone not prepared to show complete devotion and unmitigated loyalty to the company should “get the fuck out.”
Listening to the Audible version right now. Even as someone who read every story the WSJ published on Theranos, I'm still finding the book version to be very worthwhile. Lots of interesting detail, including on what it was like on the engineering front to hack together the machines for what turned out to be a pipe dream.<p>edit: for example, the second chapter focuses on the "Gluebot", a robot originally designed for glue-dispensing that became the core of Theranos's "Edison" machine. The author goes into decent detail about how this robot differed from Elizabeth Holmes's original vision of a wildly unrealistic microfluidic processor. And how Holmes/Theranos hired a new separate engineering team (which came up with the Gluebot idea) to pit against Theranos's own engineering department after the then lead engineer refused Holmes's request to run his team on a 24/7 schedule.
That first story is the nightmare of anybody working with blood. As an analyst you can take a guess at what a particular sample <i>might</i> contain because of the tests ordered but you treat each and every sample as though it contains the worst of the worst. To have a sample container explode in a machine with blood spattered all over would be a one-time occurrence in any responsibly run lab, and the clean-up after an incident like that would take a long time.
The whole Theranos disaster and partly also whats going on at Tesla are just good illustrations of the hubris in Silicon Valley. As soon as you leave the domain of stuff that can be accomplished with more or less buggy software, you collide with a bunch of real world/physical problems that are much harder to solve and need a lot of experience and perseverance to get right. That attitude that the guys developing blood testing devices at Siemens & co for decades are just a bunch of idiots who never thought of reducing the size of the devices and/or the amount of blood it takes to perform the tests is pretty preposterous. Just like the car industry which has been at the forefront of process automation has never thought of using robots for dashboard assembly etc.!? Its not that they dont do it because they are stupid or lazy (which is the assumption of SV) but because the tried for many years and it just doesn't work well enough.<p>Its really interesting, that SV VC seem to have forgotten that very basic question: why have the existing players not come up with something like that? Very often the answer is, they have and they tried and they figured out a long time ago, that it probably doesnt work well enough in the real world.
> As Khannah flashed it on a screen with a projector, the five members of his team stole furtive glances at one another, nervous that Balwani might become wise to the prank. But he didn’t bat an eye and the meeting proceeded without incident. After he left the room, they burst out laughing.<p>Not proud of it, but I admit that a younger, less grownup version of me once played a similar “what can we get the non-technical senior exec to believe/repeat” game. I guess when you encounter an obvious phony who is likely making 10-100x what you are, you can rationalize these kinds of immature activities to yourself :)
> ... double dilution lowered the concentration of the analytes in the blood samples to levels that were below the ADVIA’s FDA-sanctioned analytic measurement range. In other words, it meant using the machine in a way that neither the manufacturer nor its regulator approved of. To get the final patient result, one had to multiply the diluted result by the same factor the blood had been diluted by, not knowing whether the diluted result was even reliable. <i>Young and Gong were nonetheless proud of what they’d accomplished. At heart, both were engineers for whom patient care was an abstract concept. If their tinkering turned out to have adverse consequences, they weren’t the ones who would be held personally responsible.</i><p>Emphasis added.
Tyler Schultz is the reason we know any of this. Without that brave man, Theranos would still be faking it and very likely hurting real people with real families. Tyler Schultz blew the whistle on this fantastic scam. When the news and the net have you feeling really down, just remember, people like Tyler Schultz are still here, doing the right thing.<p>Be brave. Be like Tyler Schultz.<p><a href="https://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963" rel="nofollow">https://www.wsj.com/articles/theranos-whistleblower-shook-th...</a>
What I find really interesting here is how badly “move fast and break things works in other industries”.<p>Balwani’s outlandish behavior aside, a lot of this stuff doesn’t seem all that bad, if this weren’t a medical product. Raising money for a product you’re not sure will work out, tinkering with what a competitor has done and seeing what you can borrow, launching without a credible fallback and just hoping for the best.<p>I think I’ve done all of these things, but for software that doesn’t put peoples lives on the line.
as someone with a background in the biotech industry and also as someone who has written a lot about theranos' systemic problems, i'm inclined to say the problems with corporate culture go way farther than this article suggests.<p>the technical mishaps with pipettors and nanocapsules aside, theranos has a culture of 1. secrecy, 2. exec impunity, and 3. incompetence.<p>i'm sorry to say that theranos is probably not the only biotech company out there which falsifies results. i was never under any pressure to falsify any kind of results in my positions, but the incentives are very clear.
Did Theranos ever have anything of value that would indicate that they could overcome the obstacles described?<p>It sounds like they were up against huge obstacles and nowhere near capable of overcoming them. Makes me wonder how anyone thought they could.<p>Also did the other industry players pretty much know... they had to be full of it?
> At heart, both were engineers for whom patient care was an abstract concept. If their tinkering turned out to have adverse consequences, they weren’t the ones who would be held personally responsible.<p>That seems to be at the heart of the issue for me. It is not only the structuring of (financial) on a macro (economy) and micro (Theranos) level that puts profits over the health of patients. It is also the lack of both any liability for the people "just following orders" and the lack of any legal and moral education as part of the engineer training at uni
A key universal insight here is surely that "it's extremely dangerous to consider anyone who raises concerns or objections as cynics or nay-sayers", in any company culture.
When do we get an article about the dysfunctional culture of the press? They helped Holmes hype Theranos without asking any hard, or even mildly difficult, questions. Why is that?
Apparently Theranos wasn't above advertising their broken tech as a tool for Ebola response:<p><a href="https://twitter.com/JeremyKonyndyk/status/998998156661706753" rel="nofollow">https://twitter.com/JeremyKonyndyk/status/998998156661706753</a>
The site is unusable on my mobile device, (chrome on OnePlus 5t, unclosable popup appears immediately)
Aside, I really think displaying a picture of the "villain" so obviously doctored to make them look cartoon-villainish weakens any factual reporting that follows (which I'm sure it does, the case against Theranos being so clear cut by now)
It took me about 2 minutes on Google to find the source's real name. Given the detail about his CV in the article, I find it hard to believe that the author took his source's privacy very seriously.