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This explains to some extent why investors might have given the company that valuation of 9 billion. If the company faked demos and portrayed results obtained o

This explains to some extent why investors might have given the company that valuation of 9 billion. If the company faked demos and portrayed results obtained on non Theranos tech as Theranos tech results, most investors can't be blamed for believing the tech worked and it was only a matter of time before all tests could be performed by the tech. What is baffling to me is unless the data was doctored why didn't any one of the medical consultants or partners bring this up sooner? Why did it take a deposition to reveal this? I'm sure whistleblower protections would have been provided to anyone working there with this knowledge who chose to make it public.

inetknght 9y ago
> why didn't any one of the medical consultants or partners bring this up sooner? Outside of direct "I physically see this patient", people can forget they work in medicine where their answers can mean life or death decisions. In that situation people end up not wanting to bite the hand that feeds. When you have automated stuff that has high throughput with little or no human interaction, you seriously limit the opportunity for humans to raise questions.
- _Codemonkeyism 9y ago
  Totally agree, not sure why they've killed your karma. Between taking a pay cheque and whistle blowing, the large majority of people will always not rock the boat and take the money.
  - epmaybe 9y ago
    I think you're referring to the people working for theranos itself. However, investors generally try and do their due diligence before investing. Did none of the investors seek an expert to verify the claims made by Theranos prior to investing?
    - charlesdm 9y ago
      Herd mentality? Later stage investors probably assumed the early stage investors did their homework, while ultimately no one really did (or the early investors weren't at home enough in the space to realise the product wasn't properly working, or results were being faked, etc)
      - epmaybe 9y ago
        I think that's a more accurate reason. And it's equally likely that theranos just turned down investors that tried to dig too deep.
    - rdtsc 9y ago
      There is a concept of self-deception. During a con, a successful conman does very little, they "just" have to prime the mark. After they bite, then they fool themselves so to speak. Just because VC have money doesn't necessarily imply they are more rational or better thinking. Everyone involved here wanted this to be real and true. So while on paper due diligence was done, unconsciously nobody wanted to lift the curtain too much and peek what's behind. This is also very common with software testing. Often when developers are testing their own software, they are not very good at discovering bugs and so they end up in production. This happens because even though rationally they want to ship a better product, irrationally it is hard to get into a mentality of proving that the product you just sweated months on is broken, or bug ridden or unstable and so on. So tests are written but they are written to show make them pass and show that stuff and unconsciously avoiding the trick or edge cases that would reveal brokenness.
    - verulito 9y ago
      I recall reading on Quora that the CEO used family connections to land her initial funding from some reputable investors. They may have glossed over the due diligence. The rest just piggybacked on the reputation of the early investors. There may have been some or many which did that diligence but since they didn't speak up, we'll never know.
    - manigandham 9y ago
      > investors generally try and do their due diligence before investing They don't, especially in SV. Several of them have written about this. Beyond some cursory checks, they don't do much since it's often too expensive and time consuming to investigate every possible deal. A strong team with good connections and referrals is usually enough.
- eastWestMath 9y ago
  Any chance those physicians will be facing investigations?
  - inetknght 9y ago
    I'd be willing to bet that it's not just physicians though. Lab staff on the back-end who actually do the work don't have the same rigor of training as medical doctors do.
fittingin 9y ago
Did you notice what happened to the original whistleblower that exposed Theranos in the first place?
- drspacemonkey 9y ago
  I didn't - what happened?
  - Svexark 9y ago
    They called and threatened his mother. Private investigators followed him. He had $400,000 in legal fees from the layers they hired to harass him.
    - gyc 9y ago
      And they probably would've done much worse if he wasn't the grandson of one of the board members at Theranos.
    - kevin_thibedeau 9y ago
      If ever there was a clear cut case of barratry this is it. Too bad it would take an act of God to get the state prosecutors to enforce that law.
  - slimsag 9y ago
    I was curious and googled a bit. Relevant part: > In the past year and a half, the grandson and grandfather have rarely spoken or seen one another, communicating mainly through lawyers, says Tyler Shultz. He and his parents have spent more than $400,000 on legal fees, he says. He didn’t attend his grandfather’s 95th birthday celebration in December. Ms. Holmes did. > “Fraud is not a trade secret,” says Mr. Shultz, who hoped his grandfather would cut ties with Theranos once the company’s practices became known. “I refuse to allow bullying, intimidation and threat of legal action to take away my First Amendment right to speak out against wrongdoing.” https://www.techdirt.com/articles/20161117/15475936076/theranoss-insane-campaign-to-punish-whistleblower-who-happened-to-be-famous-boardmembers-grandson.shtml https://www.techdirt.com/articles/20161117/15475936076/thera...
Shivetya 9y ago
One could have asked the same of the VW engineers involved in Dieselgate or the GM engineers who worked on the ignition switch and simply changed the part without changing the part number. There are those who want to be part of the team and there are those who can really play on that feeling. Then there are those who just want that buck.
- Buge 9y ago
  How often are parts changed without changing the part number? If it's a common practice, it doesn't have to be seen as malicious. Are there major/minor/patch level part numbers like there are version numbers of software?
lend000 9y ago
> I'm sure whistleblower protections would have been provided to anyone working there with this knowledge who chose to make it public. From the Vanity Fair piece which brought a lot of this house of cards into the public light, it's mentioned that the teams were hyper-segmented and the secrecy even pervaded the organization. Nobody really knew what anyone else was working on.
hieronymoustosh 9y ago
my god you are naive
return0 9y ago
> most investors can't be blamed for believing the tech worked in medicine, you need to be reviewed and mostly provide proof of your methods and results etc, just to publish a single paper. Are you saying that investors are willing to not only be fooled, but give millions to the one who is fooling them without even checking if their claims are real? Sounds less like investors and more like gamblers tbh. I don't understand why investors should be absolved from responsibility.

inetknght 9y ago

> why didn't any one of the medical consultants or partners bring this up sooner? Outside of direct "I physically see this patient", people can forget they work in medicine where their answers can mean life or death decisions. In that situation people end up not wanting to bite the hand that feeds. When you have automated stuff that has high throughput with little or no human interaction, you seriously limit the opportunity for humans to raise questions.

_Codemonkeyism 9y ago
Totally agree, not sure why they've killed your karma. Between taking a pay cheque and whistle blowing, the large majority of people will always not rock the boat and take the money.
- epmaybe 9y ago
  I think you're referring to the people working for theranos itself. However, investors generally try and do their due diligence before investing. Did none of the investors seek an expert to verify the claims made by Theranos prior to investing?
  - charlesdm 9y ago
    Herd mentality? Later stage investors probably assumed the early stage investors did their homework, while ultimately no one really did (or the early investors weren't at home enough in the space to realise the product wasn't properly working, or results were being faked, etc)
    - epmaybe 9y ago
      I think that's a more accurate reason. And it's equally likely that theranos just turned down investors that tried to dig too deep.
  - rdtsc 9y ago
    There is a concept of self-deception. During a con, a successful conman does very little, they "just" have to prime the mark. After they bite, then they fool themselves so to speak. Just because VC have money doesn't necessarily imply they are more rational or better thinking. Everyone involved here wanted this to be real and true. So while on paper due diligence was done, unconsciously nobody wanted to lift the curtain too much and peek what's behind. This is also very common with software testing. Often when developers are testing their own software, they are not very good at discovering bugs and so they end up in production. This happens because even though rationally they want to ship a better product, irrationally it is hard to get into a mentality of proving that the product you just sweated months on is broken, or bug ridden or unstable and so on. So tests are written but they are written to show make them pass and show that stuff and unconsciously avoiding the trick or edge cases that would reveal brokenness.
  - verulito 9y ago
    I recall reading on Quora that the CEO used family connections to land her initial funding from some reputable investors. They may have glossed over the due diligence. The rest just piggybacked on the reputation of the early investors. There may have been some or many which did that diligence but since they didn't speak up, we'll never know.
  - manigandham 9y ago
    > investors generally try and do their due diligence before investing They don't, especially in SV. Several of them have written about this. Beyond some cursory checks, they don't do much since it's often too expensive and time consuming to investigate every possible deal. A strong team with good connections and referrals is usually enough.
eastWestMath 9y ago
Any chance those physicians will be facing investigations?
- inetknght 9y ago
  I'd be willing to bet that it's not just physicians though. Lab staff on the back-end who actually do the work don't have the same rigor of training as medical doctors do.

fittingin 9y ago

Did you notice what happened to the original whistleblower that exposed Theranos in the first place?

drspacemonkey 9y ago
I didn't - what happened?
- Svexark 9y ago
  They called and threatened his mother. Private investigators followed him. He had $400,000 in legal fees from the layers they hired to harass him.
  - gyc 9y ago
    And they probably would've done much worse if he wasn't the grandson of one of the board members at Theranos.
  - kevin_thibedeau 9y ago
    If ever there was a clear cut case of barratry this is it. Too bad it would take an act of God to get the state prosecutors to enforce that law.
- slimsag 9y ago
  I was curious and googled a bit. Relevant part: > In the past year and a half, the grandson and grandfather have rarely spoken or seen one another, communicating mainly through lawyers, says Tyler Shultz. He and his parents have spent more than $400,000 on legal fees, he says. He didn’t attend his grandfather’s 95th birthday celebration in December. Ms. Holmes did. > “Fraud is not a trade secret,” says Mr. Shultz, who hoped his grandfather would cut ties with Theranos once the company’s practices became known. “I refuse to allow bullying, intimidation and threat of legal action to take away my First Amendment right to speak out against wrongdoing.” https://www.techdirt.com/articles/20161117/15475936076/theranoss-insane-campaign-to-punish-whistleblower-who-happened-to-be-famous-boardmembers-grandson.shtml https://www.techdirt.com/articles/20161117/15475936076/thera...

Shivetya 9y ago

One could have asked the same of the VW engineers involved in Dieselgate or the GM engineers who worked on the ignition switch and simply changed the part without changing the part number. There are those who want to be part of the team and there are those who can really play on that feeling. Then there are those who just want that buck.

Buge 9y ago
How often are parts changed without changing the part number? If it's a common practice, it doesn't have to be seen as malicious. Are there major/minor/patch level part numbers like there are version numbers of software?

lend000 9y ago

> I'm sure whistleblower protections would have been provided to anyone working there with this knowledge who chose to make it public. From the Vanity Fair piece which brought a lot of this house of cards into the public light, it's mentioned that the teams were hyper-segmented and the secrecy even pervaded the organization. Nobody really knew what anyone else was working on.

hieronymoustosh 9y ago

my god you are naive

return0 9y ago

> most investors can't be blamed for believing the tech worked in medicine, you need to be reviewed and mostly provide proof of your methods and results etc, just to publish a single paper. Are you saying that investors are willing to not only be fooled, but give millions to the one who is fooling them without even checking if their claims are real? Sounds less like investors and more like gamblers tbh. I don't understand why investors should be absolved from responsibility.