Not necessarily all about Bad Blood: What you need to know before Theranos’ Elizabeth Holmes’ looming, media-frenzy trial begins on August 31
Personally, I struggled for a very long time with choosing the best way to present this story. How about documenting it as a business case-study or an opinionated article that could be published in one of the media outlets I am associated with? Unfortunately, I decided against those approaches because it will apparently be impossible to reveal how deeply concerned I am about Theranos’ unexpected shutdown!
Elizabeth Holmes was the founder and CEO of the now-defunct Theranos, a health company established on optimism and hope of revolutionizing healthcare delivery through the possibility of conducting several blood tests with a pint of blood obtained from a simple finger prick, opposed to painfully collecting vialfuls of blood samples from the patients’ veins. If it has been left to survive, even many of Theranos’ detractors then believed it was a brilliant idea that could have saved millions of lives worldwide.
Ten cogent questions people often ask about Theranos
I think the best way to address this issue is to fairly look at some questions most people have about Theranos.
- Was the concept of obtaining a few drops of blood sample to do several tests practically doable?
At the time Theranos pursued this idea, it was an entirely novelty one. That was why the concept garnered both support and opposition from all corners, even Phyllis Gardner, a prominent professor in Stanford Medical School whom Elizabeth Holmes consulted while she was a student at Stanford University, thought it was not a doable concept. Here is the shocker: The same technology Phyllis Gardner believed could not be done has recently been actualized by Sight Diagnostics, a small, Israel-based diagnostics company founded in 2011. So, Theranos is eventually justified here.
On records, Elizabeth Holmes and other scientists that hadworked for Theranos have over 200 patents to their names as they worked hard to develop Theranos’ diagnostic device named “Edison”. At one point, Theranos employed nearly 1000 employees, with its experienced scientists and engineers earning six-figure salaries.
2. Why then has Theranos been mostly painted in bad image in the press, since there is nothing good about the company one can see anywhere?
Theranos had a strict internal and external communication policy that prevented any of its employees from speaking with the press or engaging in unauthorized inter-department communication. This effort was deployed to prevent the company’s trade secrets from being revealed. This kind of practice is encouraged when a company is in stealth mode.
Unfortunately, this action really worked against the company because it afforded its myriad of enemies a unique opportunity to define, castigate, and destroy the company with their evil and unauthenticated revelations about what was going on within the company. It is like letting your enemies tell your story to the world!
3. Theranos and its callous whistleblowers
Tyler Shultz, a grandson of George Shultz (the former Secretary of State and Treasury Secretary) became the face of Theranos’ whistleblowing group that included a slew of disgruntled former employees and executives. Despite his grandfather’s pleas for cultured actions (George Shultz, Tyler’s grandfather, was also a board member at Theranos at that time!), Tyler, possibly motivated by petty jealousy, sent the first salvo of accusations to external regulators, notably New York State’s public-health lab regulators, alleging that Theranos’ lab results were not accurate.
Tyler had previously requested, through an email, to have an audience with Elizabeth Holmes so as to discuss the discrepancies he had noticed in the lab results. He didn’t, as the protocol demands, register his complaints through the head of his department; rather, he wanted to have one-on-one discussion with the CEO, who for one reason or the other was not available to meet in person.
Instead, Theranos’ President, Sunny Balwani was asked to respond to Tyler’s complaints. On his part, Balwani, who was allegedly dating Elizabeth Holmes at that time, may have greatly enraged the young man when he accused him of not being smart enough in basic math and laboratory science to question the accuracy of Theranos’ lab results.
Tyler also went ahead to confide in a Journal reporter about the happenings in Theranos. A step that had possibly snowballed into dangerous events for the company. However, the media rarely reports that Tyler Shultz was a strong believer in Theranos’ vision, having changed his course at the university from Mechanical Engineering to Biological Sciences so that he could spend his entire life working hard to actualize the company’s goals and objectives.
4. A defensive board?
One of the falsehoods being bandied around by detractors was that Theranos had had on its board very important personalities that would act as a “defense” for the company and allow it to perpetuate fraud. As erroneous as this assertion is, none of the detractors in their sane minds ever realized that Theranos was attempting to revolutionize a blood-testing industry that had consistently rejected innovations for decades. More so, Theranos, a fledgeling company that just came on the scene was given a market valuation of $9 billion, while the companies that have been in the industry for decades did not have such high valuation. As Theranos started to make in-road to the blood-testing business and setting up labs at Walgreens, Walmart, and other venues, the competition became quite intense that the company had done well by shoring up its security and board with experienced personalities such as:
George Shultz (former US Secretary of State and Treasury, and grandfather of Tyler Shultz, the first whistleblower).
Gary Roughead, a retired US Navy Admiral.
William Perry, former US secretary of Defense.
Sam Nunn, a former US senator.
James Mattis, a retired US Marine Corps General who served as President Trump’s Secretary of Defense.
5. Ethical questions for Mr. John Carreyrou
Mr. John Carreyrou, a Wall Street Journal reporter who reportedly sought out whistleblowers against Theranos to produce the first damaging article against the company and was given a free pass to commit the worst “corporate decimation/destruction” in history, needs to answer the following ethical questions:
Why did Mr. Carreyrou was not patient enough to hear the Theranos’ side of the story before pushing his article through the press?
Why did he ask the company to pay him $1,500 per hour for every hour he would spend at the company to hear Theranos’ side of the event?
Was he motivated by expected materialistic gains that he had quickly written a book titled “Bad Blood: Secrets and Lies in a Silicon Valley Startup” about the one-sided accounts he had promoted about Theranos?
He had already sold the book’s rights to Vanessa Taylor, and Jennifer Lawrence is billed to play Elizabeth Holmes in the forthcoming movie.
Even though Mr. Carreyrou wrote in one of his articles that Theranos was using third-party devices, most especially, Siemens equipment to do its blood tests, what then is the essence of perpetrating falsehood that the lab results coming from Theranos equipment did not tally with those done in other labs? In this case, wasn’t it sensible for him to focus on Siemens as a company?
6. Why did Theranos’ legal team falter?
It is fair to say that Theranos’ legal team then, headed by David Boies, the same attorney that represented Al Gore in Bush v Gore after the 2000 presidential election fiasco, blew a unique opportunity to save Theranos.
They should have sought an ex parte order that would have prevented Mr. Carreyrou and, of course, the Wall Street Journal from publishing that first damaging article that other publications/presses were copying their stories from.
7. Who are Theranos’ investors?
Against the insinuations that Theranos chose to prey on non-traditional investors who were unable to do the due process or evaluation before investing in the company, the list of Theranos’ investors below indicates otherwise. Theranos’ investors include:
Larry Ellison, the founder of Oracle and seasoned investor.
Tim Draper of venture capital firm, Draper Fisher Jurveston.
Walmart founders, theWalton family (invested $150 million)
Rupert Murdoch, veteran investor and the major owner of Wall Street Journal, and the employer of the whistleblowing reporter, Mr. Carreyrou (invested $125 million).
Betsy DaVos, President Trump’s Secretary of Education (invested $100 million)
Mexican tycoon and long-time investor, Carlos Sim.
Cox family.
8. Does sexism/gender play a significant factor in this case?
Historically, Silicon Valley has always treated female entrepreneurs differently, raising the bar for them on most occasions. Theranos was not given a breathing space that other companies enjoyed. One can never shake off the surprise that comes from realizing that there is no level playing when it comes to female businesses owners’ experiences in Silicon Valley.
Even during the Theranos’ ordeal, there were companies recalling millions of defective cars, products, software, hardware etc. It is funny that those businesses were not accused of producing defective products just to defraud their investors.
In his own words, Elon Musk admitted openly that TESLA’s first car, Roadster, was indeed “technically unsafe”! Yet, the cars got shipped to hundreds of countries.
Till date, there hasn’t been any casualty or death linked to Theranos’ technology.
9. Can Theranos rise from its ashes?
It depends on the outcomes of the court case beginning on August 31.
Currently, it is observed that Elizabeth Holmes’ lawyers are grooming her to be remorseful, knowing fully that American justice system largely favors a repentant defendant. We could only hope that their strategy works and gets her the justice.
There is every possibility that Theranos may still rise from its ashes, rebranded as a new company.
10. Does Elizabeth Holmes fit the caricature being painted in the media?
The media wants you to believe that Elizabeth Holmes is a luxury-living, private-jet-flying, baritone and arrogant Jezebel who founded Theranos for the sole purpose of defrauding investors (not mentioning that the company has so far obtained 200 patents in the course of developing its technology). But I want you to see her in a different light.
My experience working in Pathology Departments and conducting clinical tests drew me towards Theranos and its groundbreaking vision several years ago, which eventually led to being acquainted with Elizabeth Holmes. Despite the fact that she was worth $4.5 billion at that time, Elizabeth Holmes never occurred to me as a proud, evil-intentioned personality. Her words were respectful and she was just a plain, simple person to interact with. We communicated every other day, and she never seemed to be rude and domineering, as portrayed in the media.
When I suggested about representing her blood-testing technology in Africa and Asia (a suggestion she was grateful for), her response was nothing short of the truth: “She said the technology is not yet ready for commercialization”. In other words, the company was still working to perfect its technology. So, one would wonder what all the brouhaha in the media about, even when the CEO of the company admitted to a third-party that her company’s technology was still under development to perfect it for all the tests.
At that time, Theranos’ technology has only been cleared by FDA to perform blood tests for Herpes.
