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Theranos' Highly-Anticipated Defense of Its Tech Is Called a 'Bait-And-Switch'

79 points| marcusgarvey | 9 years ago |fortune.com | reply

42 comments

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[+] firebones|9 years ago|reply
I watched the Q&A and part of the presentation on Periscope. It was a little hard to follow, but Holmes appeared to be on a short leash during the Q&A period, constrained to only talking about the new invention and cloud architecture, and deferring all the pointed questions about nanotainer numbers and anomalies to the three employees she brought on stage.

It also looks like they're going to attempt to get some kind of fast track approval of this new device by playing on Zika virus fears. There was one very pointed audience/expert question about the validity and inconsistency in their Zika virus claims that didn't appear to be fielded well.

As I understand it, this device will still take a small amount of blood, dilute it, and then theoretically perform up to hundreds of tests. So while Holmes made no attempt to answer the question of "how many finger pricks will it take to do these tests", one of her employees was still making the claim that a microliter dilution was enough--going from 170 uliter to 1 uliter.

The play could very well turn into Theranos waging a press and political war with the FDA around Zika in order to rush this out. The board advice may be paying off from a political/PR standpoint even though the presentation didn't answer any questions from a scientific standpoint.

[+] joezydeco|9 years ago|reply
Except the FDA has already cleared one Zika assay, and from this tweet at the AACC keynote the Theranos test is 50x less sensitive. And Dennis Lo isn't just some random guy in the audience.

https://twitter.com/DrDanHolmes/status/760232173836185600

The science is the science. You can't really wage a press war around the facts.

[+] linuxkerneldev|9 years ago|reply
How is a person with a track record that tainted still in this position? And how is that organizations like the American Association for Clinical Chemistry (AACC) would still grant such a person access to such a large group?
[+] etendue|9 years ago|reply
It does bring attention to the AACC. They also issued a pretty strong disclaimer (https://www.aacc.org/publications/cln/cln-stat/2016/july/5/t...):

> Holmes’ appearance does not reflect an endorsement of Theranos or its technology by AACC, and Theranos has not provided any financial contribution to AACC in exchange for the invitation to speak, nor has it provided any sponsorship monies or other forms of grants to AACC.

I remember having to do a lot of paperwork to speak at medical conferences because of CME credentialing. I wonder what happened in this specific case?

[+] Aelinsaar|9 years ago|reply
"The wheels of justice turn slowly, but grind exceedingly fine."
[+] chollida1|9 years ago|reply
> “We hope to achieve FDA market authorizations of these exciting technologies in the coming years,” she said.

I've never thought about what it takes to run a medical devices company but think about that statement. It looks like Theranos just did a huge pivot and they won't be able to generate any revenue from the resulting pivot for atleast a few years?

At this point, shouldn't goal number one be to get a product, any product approved by the FDA, are they the only governing body they need to get approval from?, and then get it to market ASAP?

Someone get Holmes a copy of Ben Horowitz book "The hard thing about hard things". If she wasn't already, she is now a war time CEO.

[+] ceejayoz|9 years ago|reply
> If she wasn't already, she is now a war time CEO.

It looks more like she's a post-Hiroshima CEO.

[+] EpicEng|9 years ago|reply
Perhaps, if the test offers a strategic or tactical advantage. I work in biotech on FDA regulated devices and assays. Just throwing something out there doesn't mean it has sufficient clinical utility to reach volume, and the process is very expensive.
[+] thanatropism|9 years ago|reply
Legitimate question to people involved in funding, incubators, etc. Does this hurt the perception of women founders/CEOs in the margin (where a VC or maybe YCombinator has to pick five companies out of ten where eight look pretty good)?

I mean, I've seen a lot of criticism in the non-stupid parts of the internet about Marissa Mayer, for example -- and she arrived really late to the party.

Now, I know that rushing to conclusions about "women entrepreneurs" from three, five, fifteen, sixty-seven cases is really sexist because we don't rush to say men are terrible entrepreneus because of countless projects gone awry. I mean, I can only imagine the vitriol Nick Denton would have gone through were he a woman.

But people are sexist. People are racists -- if instead of female CEOs we were talking Sri Lankan CEOs, we'd have long arrived at a cliché conclusion, I think. Am I too pessimistic?

[+] erdevs|9 years ago|reply
There are already plenty of VCs and other influencers who, knowingly or not and intentionally or not, demonstrate sexist behaviors and attitudes. You see it over and over and over.

If you're already prone to some degree of sexism, observing Theranos, Yahoo, and maybe uBeam recently might result in confirmation bias kicking in.

If you try to be rational and as self-aware as you can though, you realize these are just a handful of examples with coincident timing and there are many, many, many times as many female CEOs who are doing just fine. You also recall all the male CEOs who have been fuckups or caused tremendous damage, not only in startupland but elsewhere like Wall St, and realize that sex is probably not a significant contributor to outcome. Mindset and ethics are among the far more likely indicators.

So, will this affect things on the margin? Maybe... with people predisposed to look for negative signals about fitness of women as CEOs. Not for anyone trying to be as objective as possible.

[+] gmarx|9 years ago|reply
A partial answer is that it will hurt in the following way. The main reason Theranos got so big, both as a company and (especially) as a story, was that Holmes was presented as the female Steve Jobs. In future investors might ask themselves "am I falling for another Elizabeth Holmes? I recall reading that Paul Graham once noted that he was vulnerable to giving extra credit to guys who looked and dressed like Mark Zuckerberg.Prejudice as a cognitive bias works both ways and if you are conscious of it, you might overcorrect
[+] patmcguire|9 years ago|reply
There's a term for Marissa Mayer's situation: "Glass cliff"
[+] mc32|9 years ago|reply
I don't have capital, so my opinion is distanced from the point of friction. However, that said, no, I don't think they will affect other female entrepreneurs negatively.

Moreover, Mayer, Holmes, etc. will see more opportunities in the future. Once people are on this track it's seldom they fall off completely. Someone will see potential in them.

Whether you think they executed well or not, this time round, they have invaluable experience for the next company.

[+] linuxkerneldev|9 years ago|reply
> if instead of female CEOs we were talking Sri Lankan CEOs, we'd have long arrived at a cliché conclusion

I wasn't able to follow this sentence. What is the cliché with Sri Lankan CEOs? I'm not even sure I know of any. I had to look up Sri Lanka to find out that it is not part of India because initially I assumed you were trying to say something about the Indian CEOs we see in the valley.

[+] marcusgarvey|9 years ago|reply
Substantive issues aside, Holmes seems to be getting very bad PR advice.
[+] DavidHm|9 years ago|reply
Which is kinda surprising. With her board of directors stacked with people coming from the politics environment, you would think they can get better PR people.
[+] rbcgerard|9 years ago|reply
Or her lawyers don't want her making public statements that will prove harmful in future litigation...
[+] Aelinsaar|9 years ago|reply
I think she's getting legal advice, not PR advice. This is almost certainly about avoiding criminal charges, and/or jail, not about saving an exposed fraud.
[+] oneplane|9 years ago|reply
And very bad quality control. And an inversion of priorities.
[+] ryporter|9 years ago|reply
Agreed. The bait-and-switch wasn't at all necessary. It's not like no one would show up if she held a press conference to announce a new product.
[+] fredgrott|9 years ago|reply
It somewhat indirectly highlights how much of common public understands statistics and their application.
[+] ryanmarsh|9 years ago|reply
I'm inspired by Holmes. It's clear that she's trying to do something very hard that would benefit humanity but instead her company's failures are making headlines. People on Twitter are spewing sexist garbage about her, or trashing her character, but to me she looks like she's just soldiering on. Respect.

I don't know how I'd handle the level of scrutiny she's under.

[+] jacquesm|9 years ago|reply
> I don't know how I'd handle the level of scrutiny she's under.

I'd hope that you would step down from your post as CEO because you're too damaged to lead the company any further rather than to cling to your CEO position and likely accelerate the sinking of the ship.

[+] maxerickson|9 years ago|reply
That they are trying to do something incredibly hard doesn't excuse the fact that they did a shoddy job doing medical tests.

It's actually sort of difficult to understand what they thought they would gain by exposing the public to their experimental tests.

I've said this before, but it would make a lot more sense to me to establish an exemplary traditional lab and use that for opt-in proofing of your revolutionary tests than it did to establish a shitty corrupt lab and void thousands of test results.

It's sort of an indictment of the concept of consumer education that anyone would still trust their health to the results of a test run by this company.

[+] bllguo|9 years ago|reply
To me it looks like she's defrauding investors and intentionally lying about Theranos' status and products. But sure, "soldiering on"...
[+] jshevek|9 years ago|reply
I'm not sure if you are saying we can respect individual aspects of a person, even if they suffer moral deficiencies...

...or if you are saying you are confident that everything she has said and done was said/done in good faith.