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Vanity Fair Blames The Failure of Theranos On Silicon Valley (vanityfair.com)
"I was only a day or two behind FBI agents who were trying to put together a time line of what Elizabeh Holmes knew and when she knew it," writes Vanity Fair, in what Slashdot reader PvtVoid describes as "a compelling story of hubris, glamour and secrecy about the unicorn Silicon Valley company that turned out to be founded on bullshit." Another anonymous Slashdot reader writes:
Holmes raised $700 million "on the condition that she would not divulge to investors how her technology actually worked," according to an article detailing how Silicon Valley can "replicate one big confidence game in which entrepreneurs, venture capitalists, and the tech media pretend to vet one another while, in reality, functioning as cogs in a machine that is designed to not question anything -- and buoy one another all along the way... In the end, it isn't in anyone's interest to call bullshit."
Theranos employed "hundreds of marketers, salespeople, communications specialists, and even the Oscar-winning filmmaker Errol Morris," as well as a chief scientist who eventually became suicidal. But then the Centers for Medicare and Medicaid Services "discovered that some of the tests Theranos was performing were so inaccurate that they could leave patients at risk of internal bleeding, or of stroke among those prone to blood clots." A reporter at the Wall Street Journal says "It's O.K. if you've got a smartphone app or a social network, and you go live with it before it's ready; people aren't going to die. But with medicine, it's different."
He became suspicious after reading the answer that the company's CEO, a Stanford dropout, supplied for a question about their technology. "A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel."
Theranos employed "hundreds of marketers, salespeople, communications specialists, and even the Oscar-winning filmmaker Errol Morris," as well as a chief scientist who eventually became suicidal. But then the Centers for Medicare and Medicaid Services "discovered that some of the tests Theranos was performing were so inaccurate that they could leave patients at risk of internal bleeding, or of stroke among those prone to blood clots." A reporter at the Wall Street Journal says "It's O.K. if you've got a smartphone app or a social network, and you go live with it before it's ready; people aren't going to die. But with medicine, it's different."
He became suspicious after reading the answer that the company's CEO, a Stanford dropout, supplied for a question about their technology. "A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel."
Scott Adams (of Dilbert) sent two samples for testing and they came back with different results. It seems the scam was very very easy to detect.
Venture capitalists are mostly scammers. They buy into a *plausible* startup, regardless of the reality. One of the other sister companies they invested in, then buys a stake in this new one. Usually a tiny stake at a hugely inflated price. This gives the new startup a super ridiculous valuation based on that tiny sliver of stock. They head for an IPO based on this fake valuation and the crap stock is dumped on the stock markets and sold to unsuspecting investors. VC exit at a big profit.
The company isn't the thing they're investing in, it's the scam IPO, and that has more to do with the designer clothes the CEO wears than technology it makes.
Do you remember Groupon? Or Zygna?
The title of this post has nothing to do with the article or even the summary. From the Slashdot summary She built a corporation based on secrecy in the hope that she could still pull it off. Then, it all fell apart. The company did not fail because of Silicon valley secrecy, it succeeded because of it. I'm used to Slashdot summaries not matching the article but the title not matching the summary? That's an amazing new low.
An old story (made popular by Jerry Pournelle and Larry Niven)...
One day, while Nasreddin was visiting the capital city, the Sultan took offense to a joke that was made at his expense. He had Nasreddin immediately arrested and imprisoned; accusing him of heresy and sedition. Nasreddin apologized to the Sultan for his joke, and begged for his life; but the Sultan remained obstinate, and in his anger, sentenced Nasreddin to be beheaded the following day. When Nasreddin was brought out the next morning, he addressed the Sultan, saying "Oh Sultan, live forever! You know me to be a skilled teacher, the greatest in your kingdom. If you will but delay my sentence for one year, I will teach your favorite horse to sing."
The Sultan did not believe that such a thing was possible; but his anger had cooled, and he was amused by the audacity of Nasreddin's claim. "Very well," replied the Sultan, "you will have a year. But if by the end of that year you have not taught my favorite horse to sing, then you will wish you had been beheaded today."
That evening, Nasreddin's friends were allowed to visit him in prison, and found him in unexpected good spirits. "How can you be so happy?" they asked. "Do you really believe that you can teach the Sultan's horse to sing?" "Of course not," replied Nasreddin, "but I now have a year which I did not have yesterday; and much can happen in that time. The Sultan may come to repent of his anger, and release me. He may die in battle or of illness, and it is traditional for a successor to pardon all prisoners upon taking office. He may be overthrown by another faction, and again, it is traditional for prisoners to be released at such a time. Or the horse may die, in which case the Sultan will be obliged to release me."
"Finally," said Nasreddin, "even if none of those things come to pass, perhaps the horse can sing."
-- https://en.wikibooks.org/wiki/Sufism/Nasrudin