Expanding,…
From Wikipedia,…
That’s a lot of heavy names that people recognize. Please notice that NONE of them were technology people. By using her connections to get these heavy-hitters onto the board, she had INSTANT credibility. Hey, Henry Kissinger believes in my company; you should, too! And she was so convincing, when George Shultz’ grandson tried to tell him that the results were faked, it caused a huge family rift, where George took Holmes’ side over his grandson.
When the fraud gets into hundreds of millions of dollars, it is not ordinary.
Thanks everyone. Ignorance fought.
Right here in my great state of Arizona, where governor Douchy had the laws changed specifically so Theranos could run tests with The Infernal Machine here.
And the way to open doors of people who could award big contracts… or amend regulations in order to make it possible to award the contracts (as mentioned by Just_Asking_Questions )
(Maybe Ms Holmes aspired to become part of the Military-Industrial Complex?)
A more interesting thing I’d wonder about is what was going through the minds of these ostensibly tough no-BS warriors, other than perhaps the mystique of Silicon Valley and the idea of a SV start-up who actually cared about having them onboard as opposed to considering them fossils (or worse). What led someone like George Schultz to take the side of this upstart over his own grandson who’s warning him it’s all a scam?
Those of us who are growing old are frequently exposed to indications of just how green and ignorant our offspring are.
The book is definitely worth a read. IIRC from the book, however, the company boasted that the machine was sent overseas and was used in battlefield situations, but it never actually was. I believe the Army never approved it for acquisition, let alone deployment.
Aye, indeed, I suppose part of the difference between merely growing old and growing wise, is to learn to recognize the offspring’s outgrown the green and ignorant years, even or especially when it does not mean coming around to our way of seeing things.
Or more succintly, deciding that the younger generation is to be always presumed wrong (but in this case, in a case of young vs. young, grandson v. Homes) would have been simple pigheadedness on Shultz’s part. I supose I can buy that.
If I recall, she told Shultz that his Grandson was wrong, that he didn’t understand the science, and that he was going to get in a lot of legal trouble if Shultz didn’t help straighten him out. Of course, he wasn’t technical enough to understand his grandson’s reasoning, but Holmes was famously persuasive and Shultz was inclined to believe her because he was so invested in Therano’s success.
That’s my understanding as well. I believe that beyond demos, the machines were only ever “used” in select Walgreens locations in Arizona.
Theranos also placed good old fashioned human phlebotomists at those locations, and drew blood the old fashioned way, with needles and syringes. The line was that it just so happened that whatever testing someone needed, by sheer coincidence, some of the tests were ones that the magic machine wasn’t certified for yet.
But that was double BS. Not only were the machines stage props, but Elizabeth Holmes was obsessed with the idea of minimal blood draws, so the phlebs drew significantly less blood than industry standard. Which meant slightly less discomfort for the patients, but much worse lab results. In fact, they drew so little blood and had to do so much dilution back at the lab to actually have enough physical stuff to sustain biochemical reactions, that the actual tests they did run (using standard testing equipment) were largely useless.
And Theranos’ grift resulted in test results that were worse than useless. They were not only generating garbage results, they knew they were generating garbage results, but reporting them back to patients and their doctors as if they were high confidence results.
Doctors and their patients were depending on those tests for diagnoses and treatment planning. Including cancer patients.
There were low-level phlebotomists and lab techs complaining to their superiors about every aspect of Theranos’ operation, and they were ignored or pressured to just “go with the program” and “trust the process”.
As others have pointed out, it wasn’t just investors being scammed, there were real world consequences - misdiagnoses and inappropriate treatment plans based on testing results that people at Theranos knew were garbage.
This, more than most of it, is what I find the greatest fascination in.
Are most people just not savvy? The first thing I would do, when being asked to invest, is run a sample throught he machine and independently run it though a real lab, and not tell Theranos I’m doing that. How hard is that? Costs next to nothing, and then you’d know. Seems like the absolute minimum review before I’d even continue talking to them.
I guess FOMO is very powerful, but I don’t get it.
Part of the success was because of the normal venture capital model: Invest in many companies knowing that most will fail but a few will bring huge returns. Often, the investors are just hoping someone buys the company at some point and they get a big windfall. They’re not necessarily concerned with actually delivering the final result. Typically the companies aren’t fraudulent, but lots of companies are working on products that never go anywhere. So it’s not necessarily out of the ordinary to invest in a tech company with a product which doesn’t have a clear path to success. The investment is speculative. If the company can get it working, the investors make a lot of money. If they don’t, then the company is just one of the expected failures typical in an investment pool. There was enough promising potential and investment coming in to Theranos that it became somewhat self perpetuating with other venture capitalists not wanting to miss out.
I’m in the middle of Bad Blood right now, and people in various companies, e.g. Walgreens, attempted to do just this. Holmes would stall, stonewall, and divert anyone who tried to do this. Usually, these people were not at the top of the food chain and would get overruled by their bosses, who were taken with Holmes - apparently she was extremely convincing. It’s kind of amazing, actually, how many people saw through the nonsense but were not listened to.
There’s probably no way to know, because people would have to have truthful self-evaluation, but how big a factor was her being an attractive blonde woman dressed in black? Guys are so easily led by their dicks. 
Such a woman, giving them attention, and “here’s my wallet. You take it!”
FOMO, indeed! You could be the one guy, yes, YOU, that’s she’ll date. Sure, it might never happen, but you can’t risk missing out.
I’ve known a women who was so personally attractive that it was like that even though she wasn’t attractive, or blonde, or dressed in black she was just an average looking young women / teenager of indeterminate age. She wasn’t consciously leading guys around: not knowing any better, she assumed that people were nice to each other they way that they were nice to her. If that had been combined with stupidity and above average good looks, who knows what crimes she might have committed?
Are there any technical explanations available of why Theranos’ claims were impossible? There are many articles giving handwaving explanations, but I’m looking for something along the lines of “HIV antibody concentrations can be as low as X, which means that in a droplet of size Y there is a significant possibility that no molecules will be present in the sample even in HIV-positive patients, leading to a false negative”.
Also, Holmes herself was obviously a fraud, but I’m more curious about whether anything they were doing was physically possible (independent of the incompetence of Holmes or Theranos).
Although I work in the lab industry, I Am Not A Biochemist, nor even a lowly lab tech - I’m just in logistics - so I can’t give you a fine-grained technical explanation. But I can tell you there were multiple “and then a miracle happens” steps in her magic machine.
A lot of very smart people have spent the last couple of centuries developing various blood tests. They all require a certain physical amount of blood to sustain the necessary biochemical reactions. There actually are some legit finger prick blood tests - testing for iron deficiency, for example, or some blood glucose monitoring tests. It’s not theoretically impossible that Theranos could have developed finger prick versions of a test that used to require an entire vial of blood. But even creating a single novel finger prick blood test would be a big deal. Holmes was claiming Theranos had created dozens of finger prick tests. That’s beyond revolutionary.
But it goes beyond even that. She was also claiming that they could run a dozen or more tests on the same finger prick blood sample. In the real world, if you want to run a dozen blood tests, you need multiple, different, vials of blood. For some blood tests, you can draw the blood in a plain vial. For some tests you need to draw it in a vial with a certain additive. For some tests you need to draw it in a vial with a different additive. For some tests, you need whole blood. For some tests, you need to separate the blood and pour off the serum. And so on and so forth. And you need a certain minimal amount of blood for each test. Holmes was claiming she had a process that avoided all of that.
But it goes beyond that. Holmes also claimed that she had completely automated the whole process. Again, there are genuine finger prick tests that are pretty much automated. Even creating one additional test like that would be a big deal. Holmes was claiming she had figured out a way to fully automate dozens of blood tests.
And it goes beyond that. There are automated blood tests that require massive, specialized lab machines. Holmes was claiming that she had micronized not just one but dozens of blood tests, all into the same machine.
But it gets worse. One of the biggest problems in blood testing labs is cross-contamination. In the real world, it’s just physically really difficult to avoid accidental cross contamination. Blood is perverse. It’s sticky and slippery. It takes on liquid and semi-solid states, simultaneously. Whichever physical state and property would be useful for you for blood to have at that particular stage of testing, it has the opposite. It spills through the smallest crack, and then sticks there when you try to clean it off, then mixes in with other blood you’re trying to test. Holmes was claiming that not only could her micronized machine run a dozen or more tests on a single drop of blood, without cross-contamination between the different tests, she was also claiming that the whole process, including deep cleaning between different drops of blood, was fully automated.
It’s not quite homeopathic levels of physical impossibility. But any one of Theranos’ supposed advances would revolutionize the blood testing lab industry. And she claimed to have dozens of simultaneous revolutionary advances, in biochemistry and electromechanics. And no evidence that any of those advances actually existed, or any plausible explanation for how any of them even could work, much less how any of them did work.
Thanks for the info. I wonder if that somehow made the fraud more plausible: that individually, few of their claims were quite impossible; it’s just that all together they represented a significant leap over the state of the art. It might be one thing to develop a few of these for a billion dollars, but quite another to develop all of the hundreds of leaps that their claims implied.
At my old job, we got a discount on our health insurance for getting an annual physical, and to make things easier you could just go to the company’s on-site nurse for that physical. When I first started, you’d go there and they’d take a couple of vials of blood to run cholesterol tests, glucose tests, etc. Then one year the nurse told me that now they only needed a drop of blood. That pleased me, because I really don’t like having blood drawn. And it just now hit me… they were probably using a Theranos machine.
Someone with more knowledge can correct my (probably faulty) memory, but ISTR that finger pricks cause certain reactions in the blood which means that certain tests are impossible. Elizabeth was warned about this early on, but of course dismissed that.