6 ms·

Theranos Agrees to Pay $4.65M in Arizona Refunds

57 points by radnam 9y ago

RangerScience 9y ago
The story of Theranos makes me think about where the "great filter" lines for startups are. My prior company - who I was with from ~20 people to the current 300+ - has been going through some shakeups that make me wonder. This adds to my thinking. I'd have thought that both were past those lines - hundreds of people, multiple offices? Seems like it'd be solid at that point. The common factor is that both have yet to release their "flagship" product, although they've released products. Then you can think about small products with small teams - Sidekiq, Cards Against Humanity - that achieve substantial success. It seems like this is the most telling "filter" - did you release your core product? Thoughts?
- petra 9y ago
  It kinds of depends what your goals are: if your goals are to make a card game? sure, a small team should suffice. But if your goals are to make rockets ? well having 500+ employees and having your product fail, as it happen to spaceX in 2008, maybe not so bad ? And it could be that for theranos, in order to sell laboratory services(assuming their competitors bundle stuff), they have to offer the whole service array , meaning thousands of tests, so it takes a lot of work for their core product - altough they did already have product based on the same tech for pharma r&d.
- JimboOmega 9y ago
  You could say Theranos' core product was "released" - they were doing blood testing. Maybe badly. Maybe clandestinely on other equipment. But as far as the rest of the world was concerned it was "working". Plus you have to define what "core product" means. Is it the bit that makes money? A lot of startups have slotted the money making bit in later and gone alright; others never really could figure that out. And... relatively boring companies with real business can transform themselves into "house of cards built on lies" type businesses pretty easily, too. Think about Enron, or any financial firm that went heavily in on the subprime mortgages.
  - RangerScience 9y ago
    Maybe their core product, but not their flagship product. Theranos was built on the promise of an amazing new tech for blood testing, not on the promise of blood testing. By "flagship product" I mean the thing you're basing your corporate identity on. Like the stereotypical waiter in LA, they're actually an actor; their identity (flagship product) is actor, but their day job (released/core products) is something else.
- droopyEyelids 9y ago
  The "Great Filter" is a concept that doesn't cleanly map to business success.
- throwaway90001 9y ago
  How do you scale to 300+ employees in multiple offices without having released a product? It sounds like both companies were just money-burning machines, where the only thing keeping them afloat is VC funding. If you aren't selling something for more than it costs you to make (or deliver, in the case of services), you're not going to have anywhere to sit when the music stops.
  - RangerScience 9y ago
    Products were released, but they were all side offerings, not the main dish.
- ChuckMcM 9y ago
  The filter line is typically execution risk, which is to say that once you've demonstrated that people will pay enough money for the product that you can fund the business, growing the company to the point where it is net cash flow positive flips the switch. The thing about Theranos was, as we found out, that they had yet to prove their fundamental thesis which was that you could do a useful number of diagnostic tests with a small amount of blood to the same confidence levels as the same test done the existing way. Fundamentally they could not show that to be true. So in a more critical (or perhaps skeptical) investing environment, they should have stalled out several years ago when they couldn't demonstrate to new investors that they had a viable blood diagnostic process[1]. But for what ever reason that didn't happen. [1] And yes there are stories that they simply lied about what was happening.
Boothroid 9y ago
I remember thinking Theranos/Elizabeth Holmes was too good to be true from the very first time I read about it, no lie. Was it really plausible that this young woman could come up with an idea that the whole medical industry had missed? I can't quite articulate why, but it just didn't seem like medicine would be ripe for disruption in the same way as other industries that we've seen turned upside down. It takes decades for advances in cancer etc. Had Theranos really managed to stumble on something the entrenched players had missed? Such a strange story, so much money apparently squandered, and yet the zombie still stumbles on. How long before it's finally put out of its misery?!
propman 9y ago
The biggest takeaway from Theranos is that investigative Journalism is not dead. John Careryu (sp?) single handedly dug up the truth in a non disparaging factual manner and went up against a team of ruthless lawyers threatening to utterly destroy him, the Journal, and his source. That source was a 24 year old hero whose parents put up their house as collateral just to help their son do the right thing when he had no monetary gain from it. After learning so much about the bullshit Theranos did, every nail that pushes it further into the ground has given me a justice euphoria high. I'll be following this until it's end
- jzebedee 9y ago
  That's John Carreyrou of The Wall Street Journal's investigative reporting team. [1] [1] http://www.wsj.com/news/author/1282 http://www.wsj.com/news/author/1282
Mz 9y ago
To my disgust, the biggest thing most people seem to take away from it is "Yup, that's what happens when a woman is in charge of a business." I'm a woman. I am fine with her burning. But, geez, I hate the idea that there is lava-like splash back spattering all other women in the world who are trying to be taken seriously.
- deleted 9y ago
  [deleted]
- refulgentis 9y ago
  Really? I'm very surprised anyone would blame malfeasance on anatomy.
- protomyth 9y ago
  Interesting, because most of the comments I've heard from friends and relatives is "Snake Oil seller updated for Silicon Valley". Looks has been brought up, but that goes both ways as you don't find many hucksters who are on the ugly side regardless of gender.
  - maverick_iceman 9y ago
    True. Zuck, Page-Brin, Evan Spiegel all are pretty good looking. PG once said , "I can be tricked by anyone who looks like Mark Zuckerberg" (though he claims it was a joke)[1]. I think good looking people have a natural advantage when it comes to persuading VCs or getting the media interested in their companies. [1] https://www.bloomberg.com/news/articles/2013-05-03/how-to-get-into-y-combinator-look-like-mark-zuckerberg https://www.bloomberg.com/news/articles/2013-05-03/how-to-ge...
    - rublev 9y ago
      Zuckberg is considered attractive?
    - protomyth 9y ago
      I would love to find the person that doesn't think being "good looking" for the current standard is an advantage. Heck, Hollywood does a TV show about a person who is "Ugly" and even the ugly person is amazing looking. Being taller is an advantage. Never mind the articles that crop up about people having plastic surgery to look younger so they have a better shot at being a CEO.
user5994461 9y ago
Could we have a summary for people like me who are not familiar with them? What's the case on Theranos? what did they do and sale? What happened?
- protomyth 9y ago
  https://hn.algolia.com/?query=Theranos&sort=byPopularity&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=Theranos&sort=byPopularity&pre...
  - user5994461 9y ago
    It's clearly evil and bad judging by the title. Opened two random articles... and they were two WSJ paywalled articles. OMG.
    - protomyth 9y ago
      The Wall Street Journal did the initial, in depth reporting.
- deleted 9y ago
  [deleted]
- sigmar 9y ago
  https://en.wikipedia.org/wiki/Theranos#Controversy https://en.wikipedia.org/wiki/Theranos#Controversy
martin1975 9y ago
where's fu*kedcompany.com when you need it...
martin1975 9y ago
where's fu*kedcompany.com when you need it...
blizkreeg 9y ago
How long would this have gone on if not for the investigative piece? Would it have eventually cost someone their life? That's the scary part.

57 points by radnam 9y ago

The story of Theranos makes me think about where the "great filter" lines for startups are. My prior company - who I was with from ~20 people to the current 300+ - has been going through some shakeups that make me wonder. This adds to my thinking. I'd have thought that both were past those lines - hundreds of people, multiple offices? Seems like it'd be solid at that point. The common factor is that both have yet to release their "flagship" product, although they've released products. Then you can think about small products with small teams - Sidekiq, Cards Against Humanity - that achieve substantial success. It seems like this is the most telling "filter" - did you release your core product? Thoughts?

petra 9y ago
It kinds of depends what your goals are: if your goals are to make a card game? sure, a small team should suffice. But if your goals are to make rockets ? well having 500+ employees and having your product fail, as it happen to spaceX in 2008, maybe not so bad ? And it could be that for theranos, in order to sell laboratory services(assuming their competitors bundle stuff), they have to offer the whole service array , meaning thousands of tests, so it takes a lot of work for their core product - altough they did already have product based on the same tech for pharma r&d.
JimboOmega 9y ago
You could say Theranos' core product was "released" - they were doing blood testing. Maybe badly. Maybe clandestinely on other equipment. But as far as the rest of the world was concerned it was "working". Plus you have to define what "core product" means. Is it the bit that makes money? A lot of startups have slotted the money making bit in later and gone alright; others never really could figure that out. And... relatively boring companies with real business can transform themselves into "house of cards built on lies" type businesses pretty easily, too. Think about Enron, or any financial firm that went heavily in on the subprime mortgages.
- RangerScience 9y ago
  Maybe their core product, but not their flagship product. Theranos was built on the promise of an amazing new tech for blood testing, not on the promise of blood testing. By "flagship product" I mean the thing you're basing your corporate identity on. Like the stereotypical waiter in LA, they're actually an actor; their identity (flagship product) is actor, but their day job (released/core products) is something else.
droopyEyelids 9y ago
The "Great Filter" is a concept that doesn't cleanly map to business success.
throwaway90001 9y ago
How do you scale to 300+ employees in multiple offices without having released a product? It sounds like both companies were just money-burning machines, where the only thing keeping them afloat is VC funding. If you aren't selling something for more than it costs you to make (or deliver, in the case of services), you're not going to have anywhere to sit when the music stops.
- RangerScience 9y ago
  Products were released, but they were all side offerings, not the main dish.
ChuckMcM 9y ago
The filter line is typically execution risk, which is to say that once you've demonstrated that people will pay enough money for the product that you can fund the business, growing the company to the point where it is net cash flow positive flips the switch. The thing about Theranos was, as we found out, that they had yet to prove their fundamental thesis which was that you could do a useful number of diagnostic tests with a small amount of blood to the same confidence levels as the same test done the existing way. Fundamentally they could not show that to be true. So in a more critical (or perhaps skeptical) investing environment, they should have stalled out several years ago when they couldn't demonstrate to new investors that they had a viable blood diagnostic process[1]. But for what ever reason that didn't happen. [1] And yes there are stories that they simply lied about what was happening.

Boothroid 9y ago

I remember thinking Theranos/Elizabeth Holmes was too good to be true from the very first time I read about it, no lie. Was it really plausible that this young woman could come up with an idea that the whole medical industry had missed? I can't quite articulate why, but it just didn't seem like medicine would be ripe for disruption in the same way as other industries that we've seen turned upside down. It takes decades for advances in cancer etc. Had Theranos really managed to stumble on something the entrenched players had missed? Such a strange story, so much money apparently squandered, and yet the zombie still stumbles on. How long before it's finally put out of its misery?!

propman 9y ago

The biggest takeaway from Theranos is that investigative Journalism is not dead. John Careryu (sp?) single handedly dug up the truth in a non disparaging factual manner and went up against a team of ruthless lawyers threatening to utterly destroy him, the Journal, and his source. That source was a 24 year old hero whose parents put up their house as collateral just to help their son do the right thing when he had no monetary gain from it. After learning so much about the bullshit Theranos did, every nail that pushes it further into the ground has given me a justice euphoria high. I'll be following this until it's end

jzebedee 9y ago
That's John Carreyrou of The Wall Street Journal's investigative reporting team. [1] [1] http://www.wsj.com/news/author/1282 http://www.wsj.com/news/author/1282

Mz 9y ago

To my disgust, the biggest thing most people seem to take away from it is "Yup, that's what happens when a woman is in charge of a business." I'm a woman. I am fine with her burning. But, geez, I hate the idea that there is lava-like splash back spattering all other women in the world who are trying to be taken seriously.

deleted 9y ago
[deleted]
refulgentis 9y ago
Really? I'm very surprised anyone would blame malfeasance on anatomy.
protomyth 9y ago
Interesting, because most of the comments I've heard from friends and relatives is "Snake Oil seller updated for Silicon Valley". Looks has been brought up, but that goes both ways as you don't find many hucksters who are on the ugly side regardless of gender.
- maverick_iceman 9y ago
  True. Zuck, Page-Brin, Evan Spiegel all are pretty good looking. PG once said , "I can be tricked by anyone who looks like Mark Zuckerberg" (though he claims it was a joke)[1]. I think good looking people have a natural advantage when it comes to persuading VCs or getting the media interested in their companies. [1] https://www.bloomberg.com/news/articles/2013-05-03/how-to-get-into-y-combinator-look-like-mark-zuckerberg https://www.bloomberg.com/news/articles/2013-05-03/how-to-ge...
  - rublev 9y ago
    Zuckberg is considered attractive?
  - protomyth 9y ago
    I would love to find the person that doesn't think being "good looking" for the current standard is an advantage. Heck, Hollywood does a TV show about a person who is "Ugly" and even the ugly person is amazing looking. Being taller is an advantage. Never mind the articles that crop up about people having plastic surgery to look younger so they have a better shot at being a CEO.

user5994461 9y ago

Could we have a summary for people like me who are not familiar with them? What's the case on Theranos? what did they do and sale? What happened?

protomyth 9y ago
https://hn.algolia.com/?query=Theranos&sort=byPopularity&prefix&page=0&dateRange=all&type=story https://hn.algolia.com/?query=Theranos&sort=byPopularity&pre...
- user5994461 9y ago
  It's clearly evil and bad judging by the title. Opened two random articles... and they were two WSJ paywalled articles. OMG.
  - protomyth 9y ago
    The Wall Street Journal did the initial, in depth reporting.
deleted 9y ago
[deleted]
sigmar 9y ago
https://en.wikipedia.org/wiki/Theranos#Controversy https://en.wikipedia.org/wiki/Theranos#Controversy

martin1975 9y ago

where's fu*kedcompany.com when you need it...

martin1975 9y ago

where's fu*kedcompany.com when you need it...

blizkreeg 9y ago

How long would this have gone on if not for the investigative piece? Would it have eventually cost someone their life? That's the scary part.