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A New Look Inside Theranos’ Dysfunctional Corporate Culture
- danso 8y agoListening to the Audible version right now. Even as someone who read every story the WSJ published on Theranos, I'm still finding the book version to be very worthwhile. Lots of interesting detail, including on what it was like on the engineering front to hack together the machines for what turned out to be a pipe dream. edit: for example, the second chapter focuses on the "Gluebot", a robot originally designed for glue-dispensing that became the core of Theranos's "Edison" machine. The author goes into decent detail about how this robot differed from Elizabeth Holmes's original vision of a wildly unrealistic microfluidic processor. And how Holmes/Theranos hired a new separate engineering team (which came up with the Gluebot idea) to pit against Theranos's own engineering department after the then lead engineer refused Holmes's request to run his team on a 24/7 schedule.
- Balgair 8y agoWha? A 24 hour engineering team? Who they hell did they think they were going to hire to do engineering at 3am? Maybe they mean quality control engineers for a 24 hour production line? Medtronic does this, but the QC guys are really only there for when the lines mess up.
- danso 8y agoRelevant excerpt from the book: > ED WAS WORKING late one evening when Elizabeth came by his workspace. She was frustrated with the pace of their progress and wanted to run the engineering department twenty-four hours a day, seven days a week, to accelerate development. Ed thought that was a terrible idea. His team was working long hours as it was... > Ed pushed back against Elizabeth’s proposal. Even if he instituted shifts, a round-the-clock schedule would make his engineers burn out, he told her. “I don’t care. We can change people in and out,” she responded. “The company is all that matters.” Carreyrou, John. Bad Blood: Secrets and Lies in a Silicon Valley Startup (p. 28). Knopf Doubleday Publishing Group. Kindle Edition.
- Balgair 8y ago> “I don’t care. We can change people in and out,” Yeah, that's a great person to work for right there.
- colmvp 8y agoWow that is a creepy looking feature image lol
- madengr 8y agoShe just needs horns.
- FartyMcFarter 8y agoWell that will teach me to read stuff just before sleeping...
- w0mbat 8y agoAlso Theranos never should have killed half the employees "to restore balance to the company".
- cryoshon 8y agoas someone with a background in the biotech industry and also as someone who has written a lot about theranos' systemic problems, i'm inclined to say the problems with corporate culture go way farther than this article suggests. the technical mishaps with pipettors and nanocapsules aside, theranos has a culture of 1. secrecy, 2. exec impunity, and 3. incompetence. i'm sorry to say that theranos is probably not the only biotech company out there which falsifies results. i was never under any pressure to falsify any kind of results in my positions, but the incentives are very clear.
- mhneu 8y agoShare cites of your writing?
- jjxw 8y agoThe author of this book, John Carreyou, was apparently public enemy number 1 at Theranos. Theranos both dedicated time at an all hands to chant "f--- you Carreyou" and developed a space invaders like game where players could shoot pictures of his head.[0] It does put some of the more... unflattering descriptions of Balwani in the article in context. For someone who was so viciously attacked and ultimately vindicated on his bearish view of the Theranos it's understandable. [0]http://www.businessinsider.com/theranos-employees-made-space-invaders-game-where-you-shoot-journalist-that-exposed-startup-problems-2018-4 http://www.businessinsider.com/theranos-employees-made-space...
- jacquesm 8y agoThat's one very sick corporate culture. I sincerely hope that all the high level cadre at Theranos will find it hard to get new employment. That sort of thing has absolutely no place in any organization.
- asdfologist 8y agoEr, shouldn't they outright go to prison?
- dragonwriter 8y agoPer the article, there is in fact an ongoing federal criminal investigation. So, that's still on the table.
- jacquesm 8y agoUnder what crimes would you like them charged? What proof do you have to support the charges? I agree that Theranos is a terrible company and that in a just world and with perfect evidence the execs should be punished heavily but in this world I'd be most impressed if they were just fined into the poorhouse. There is some hope though, the last paragraph reads: "Meanwhile, the U.S. attorney’s office in San Francisco is conducting a criminal investigation that could result in indictments of both Holmes and Balwani." But I would not hold my breath. Now, if they had committed a real crime, such as copyright violation then that would be a different matter. But mere fraud and potentially impacting the health of consumers? Let's not make a fuss.
- dubhrosa 8y agoThe site is unusable on my mobile device, (chrome on OnePlus 5t, unclosable popup appears immediately) Aside, I really think displaying a picture of the "villain" so obviously doctored to make them look cartoon-villainish weakens any factual reporting that follows (which I'm sure it does, the case against Theranos being so clear cut by now)
- danso 8y agoWell, it is excerpted from a book titled "Bad Blood", which arguably is a signal of where the author stands on the matter.
- dubhrosa 8y agoWhatever the source I don't think there can be any question how Theranos will be judged at this point, which makes resorting to cheap devices all the more unnecessary and redundant.
- MBCook 8y agoNo problem for me on my iPhone, go figure. I totally agree though. That picture was entirely unnecessary in just undercut some of the credibility of the article.
- rdiddly 8y agoAll they did was color it red. I found it hilarious, artfully done, and a nice change from all the usual photos of her.
- ryandrake 8y ago> As Khannah flashed it on a screen with a projector, the five members of his team stole furtive glances at one another, nervous that Balwani might become wise to the prank. But he didn’t bat an eye and the meeting proceeded without incident. After he left the room, they burst out laughing. Not proud of it, but I admit that a younger, less grownup version of me once played a similar “what can we get the non-technical senior exec to believe/repeat” game. I guess when you encounter an obvious phony who is likely making 10-100x what you are, you can rationalize these kinds of immature activities to yourself :)
- jacquesm 8y agoI don't even see that as a prank but as a way of establishing beyond doubt that the guy was full of shit.
- maxxxxx 8y agoYeah. It's a test. I have done that too before. Say something obviously wrong and see if you get called on it.
- zeth___ 8y agoI wouldn't call you out. I'd quietly work to get you fired for incompetence.
- majos 8y agoWhat is the upside of this test? If they say nothing it may be that they don't know you're wrong or silently concluded you're wrong. If they do say something you say...what? "Just testing you"?
- maxxxxx 8y agoYou say that it was a joke. It was a similar situation where a new VP was commenting on code he didn't know anything about but just repeated falsehoods with total conviction. So I put some stuff into a presentation that was clearly funny to people who knew how things worked but the VP took it at face value.
- jacquesm 8y agoThat first story is the nightmare of anybody working with blood. As an analyst you can take a guess at what a particular sample might contain because of the tests ordered but you treat each and every sample as though it contains the worst of the worst. To have a sample container explode in a machine with blood spattered all over would be a one-time occurrence in any responsibly run lab, and the clean-up after an incident like that would take a long time.
- walshemj 8y agoThat sounds like it failed at the stage where your taking blood and not inside some machine. As some one who has a lot of bloods done (down to 4/5 a month now) you occasionally have to repeat as the vein doesn't work etc and there is always some blood leakage.
- jacquesm 8y ago"When the technician pushed the tiny twin tubes into the device, there was a loud pop and blood splattered everywhere. One of the nanotainers had just exploded." So definitely in the machine.
- pwaivers 8y agoIt was not in a machine. The 'device' is the plastic instrument they use to collect blood, not a machine. "At her signal, a technician pricked a volunteer’s finger, then applied a transparent plastic implement shaped like a miniature rocket to the blood oozing from it."
- oinoi30998 8y agoIt took me about 2 minutes on Google to find the source's real name. Given the detail about his CV in the article, I find it hard to believe that the author took his source's privacy very seriously.
- danso 8y agoFor which potential bad actors has "Alan Beam's" privacy been seriously compromised? He was already known (according to the book) to Theranos and its lawyers as being a whistleblower. It may have been enough privacy for him to make sure Googling his actual name would not bring up Theranos in search results.
- mhneu 8y agoIt is ludicrous that Theranos' punishment for all their fraud was merely paying a fine. We need to resume prosecuting the individuals who commit white collar crimes. Otherwise, getting caught committing crime just gets budgeted into the business plan. The book The Chickenshit Club does a good job highlighting this (fairly recent) problem with US justice. https://www.nytimes.com/2017/07/05/books/review/the-chickenshit-club-jesse-eisinger-.html https://www.nytimes.com/2017/07/05/books/review/the-chickens... "America’s Top Prosecutors Used to Go After Top Executives. What Changed?"
- danso 8y agoThey are still under federal criminal investigation. From the end of the article: > Meanwhile, the U.S. attorney’s office in San Francisco is conducting a criminal investigation that could result in indictments of both Holmes and Balwani.
- jgalt212 8y agoThat's true, but it's usually the case that the SEC and DOJ coordinate their investigations and announces charges simultaneously, or by just one of them. I'm not saying criminal charges aren't forthcoming, but it would not fit the pattern of DOJ/SEC coordination in the past.
- TelAvivHacker 8y agoShe got away with it because she's a woman.
- jacobolus 8y ago“Conservative” (i.e. pro-corporate) justices have had a majority on the US supreme court for four and half decades now. There are now decades of precedent firmly on the side of corporate executives vs. customers, employees, or the general public. More generally, corporations have coopted or subverted most other institutions in the society, including the DOJ and the legislature. (Hooray for unlimited anonymous campaign finance.)
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- dbuder 8y agoThe term unicorn and the search for unicorns has never been so appropriate.
- duxup 8y agoDid Theranos ever have anything of value that would indicate that they could overcome the obstacles described? It sounds like they were up against huge obstacles and nowhere near capable of overcoming them. Makes me wonder how anyone thought they could. Also did the other industry players pretty much know... they had to be full of it?
- danso 8y agoThe book makes the case that Elizabeth Holmes was a capable practitioner of the "reality-distortion field" and was able to use her charisma, and Theranos's purported humanitarian mission, to persuade enough of the right people. For example, former Safeway CEO Steve Burd, who committed the company to $350M in renovations to accommodate Theranos "Wellness Centers". Burd remained confident that Holmes was legit (and had been vetted by others), even after Theranos missed every deadline. He even brushed off how Theranos's test erroneously diagnosed a Safeway senior executive with prostate cancer. > When questions or issues came up that had to be taken back to Theranos, he would pipe up with what became a refrain: “I’ll talk to Elizabeth about it.” Larree Renda, the executive who had started out at Safeway as a teenage bagger in 1974 and climbed the corporate ranks to become one of Burd’s top deputies, and other executives involved in the project were surprised by how much latitude he gave the young woman. He usually held his deputies and the company’s business partners to firm deadlines, but he allowed Elizabeth to miss one after the other. Some of Burd’s colleagues knew he had two sons. They began to wonder if he saw in Elizabeth the daughter he’d never had. Whatever it was, he was in her thrall.
- Balgair 8y ago> Theranos's test erroneously diagnosed a Safeway senior executive with prostate cancer Jesus! That's horrible!
- MusaTheRedGuard 8y ago> The book makes the case that Elizabeth Holmes was a capable practitioner of the "reality-distortion field" She also survived a coup attempt by her board, simply by convincing them to give her another chance. Then she fired the executives that moved against her.
- carapace 8y ago> ... double dilution lowered the concentration of the analytes in the blood samples to levels that were below the ADVIA’s FDA-sanctioned analytic measurement range. In other words, it meant using the machine in a way that neither the manufacturer nor its regulator approved of. To get the final patient result, one had to multiply the diluted result by the same factor the blood had been diluted by, not knowing whether the diluted result was even reliable. Young and Gong were nonetheless proud of what they’d accomplished. At heart, both were engineers for whom patient care was an abstract concept. If their tinkering turned out to have adverse consequences, they weren’t the ones who would be held personally responsible. Emphasis added.
- rdtsc 8y ago> Like many people who met her for the first time, Beam was taken aback by her deep voice. It was unlike anything he’d heard before. Someone pointed it out the other day here, and I thought well that's just silly. Then went and listen to some videos and it is kind of freaky. It's like she deliberately changes her voice, but it sounds worse and obviously fake. https://www.youtube.com/watch?v=YecjzEScXqU&t=105 https://www.youtube.com/watch?v=YecjzEScXqU&t=105 Here she forgets to fake it for a while: https://www.youtube.com/watch?v=rGfaJZAdfNE&t=403 https://www.youtube.com/watch?v=rGfaJZAdfNE&t=403 I'd think someone should have mentioned it to her. But given the culture in the company I can see what was going on. She could have showed up with a lampshade on her head and nobody would have said anything either. After a while there is nothing to say to someone who does stuff like this: > Still visibly angry, Holmes told the gathered employees that she was building a religion. If there were any among them who didn’t believe, they should leave. Balwani put it more bluntly: Anyone not prepared to show complete devotion and unmitigated loyalty to the company should “get the fuck out.”
- gadders 8y agoYeah, that voice thing is pretty weird. I think, sadly, she is just fantasist from top to bottom.
- pjc50 8y agoThis is what happens when someone reads that deep voices help you make more money: https://www.telegraph.co.uk/news/science/10052978/Deep-voiced-chief-executives-are-more-successful-scientists-say.html https://www.telegraph.co.uk/news/science/10052978/Deep-voice... And for a while, wasn't it a successful tactic? It has a lot of intuitive validity. "Command voice" is definitely a skill that can be taught, and is used by people from military officers to animal trainers and teachers. Given the extent to which the HN audience is amenable to "self-hacking", how many people here would do this if they were convinced it would earn them an extra 5%?
- VHRanger 8y agoProbably one of those studies that doesn't replicate. Single new studies with folksy findings tend to be one-offs that can't be reproduced.
- jmknoll 8y agoWhat I find really interesting here is how badly “move fast and break things works in other industries”. Balwani’s outlandish behavior aside, a lot of this stuff doesn’t seem all that bad, if this weren’t a medical product. Raising money for a product you’re not sure will work out, tinkering with what a competitor has done and seeing what you can borrow, launching without a credible fallback and just hoping for the best. I think I’ve done all of these things, but for software that doesn’t put peoples lives on the line.
- tonyedgecombe 8y agoI don't think it works that well in our industry either. Products from companies that follow that process are at best frustrating to work with because of the constant churn.
- Quanttek 8y ago> At heart, both were engineers for whom patient care was an abstract concept. If their tinkering turned out to have adverse consequences, they weren’t the ones who would be held personally responsible. That seems to be at the heart of the issue for me. It is not only the structuring of (financial) on a macro (economy) and micro (Theranos) level that puts profits over the health of patients. It is also the lack of both any liability for the people "just following orders" and the lack of any legal and moral education as part of the engineer training at uni
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- techsin101 8y agoI'm happy for all VCs that lost money. Ivy college x drop out got them good.
- dr_faustus 8y agoThe whole Theranos disaster and partly also whats going on at Tesla are just good illustrations of the hubris in Silicon Valley. As soon as you leave the domain of stuff that can be accomplished with more or less buggy software, you collide with a bunch of real world/physical problems that are much harder to solve and need a lot of experience and perseverance to get right. That attitude that the guys developing blood testing devices at Siemens & co for decades are just a bunch of idiots who never thought of reducing the size of the devices and/or the amount of blood it takes to perform the tests is pretty preposterous. Just like the car industry which has been at the forefront of process automation has never thought of using robots for dashboard assembly etc.!? Its not that they dont do it because they are stupid or lazy (which is the assumption of SV) but because the tried for many years and it just doesn't work well enough. Its really interesting, that SV VC seem to have forgotten that very basic question: why have the existing players not come up with something like that? Very often the answer is, they have and they tried and they figured out a long time ago, that it probably doesnt work well enough in the real world.
- adrianN 8y agoSpace X seems to be doing pretty well competing against the old guard.
- biston7 8y agoYou're comparing apples and oranges. Rocketry is a domain which until very recently was completely the province of governments. Lack of competition definitely causes problems with innovation. Also, I've read some articles that suggest SpaceX is unlikely to achieve the economies they tout. The car industry has essentially always been very competitive, with a number of innovative companies. Consider the rise of hybrid cars with Honda and Toyota leading the way. GM famously did a lot of the pioneering of modern EVs. Also, the point grandparent was making is that you see a similar pattern of deception from Tesla. Sure, maybe sometimes it works out. But not always. Another interesting question is whether deception is actually bad for human advancement in the long run. In fact, maybe the answer is no. I bet a lot of innovations came about because of founders essentially lying to investors to get a check and then ultimately finding a way.
- azeotropic 8y agoWhen do we get an article about the dysfunctional culture of the press? They helped Holmes hype Theranos without asking any hard, or even mildly difficult, questions. Why is that?
- eicnix 8y agoThe book describes how the board vouched for the initial integrity of Theranos and Holmes. Because of the high calibers of the board members they were taken as character witnesses. The boarded included: * former Secretary of State George Shultz * William Perry (former Secretary of Defense) * Henry Kissinger (former Secretary of State) * Sam Nunn (former U.S. Senator) * Bill Frist (former U.S. Senator and heart-transplant surgeon) * Gary Roughead (Admiral, USN, retired) * James Mattis (General, USMC) * Richard Kovacevich (former Wells Fargo Chairman and CEO) * Riley Bechtel (chairman of the board and former CEO at Bechtel Group)
- tonyedgecombe 8y agoSo only one with a medical background.
- JorgeGT 8y agoBut several experts in the bloodshed field.
- gabriellemic 8y agoA key universal insight here is surely that "it's extremely dangerous to consider anyone who raises concerns or objections as cynics or nay-sayers", in any company culture.
- Balgair 8y agoTyler Schultz is the reason we know any of this. Without that brave man, Theranos would still be faking it and very likely hurting real people with real families. Tyler Schultz blew the whistle on this fantastic scam. When the news and the net have you feeling really down, just remember, people like Tyler Schultz are still here, doing the right thing. Be brave. Be like Tyler Schultz. https://www.wsj.com/articles/theranos-whistleblower-shook-the-companyand-his-family-1479335963 https://www.wsj.com/articles/theranos-whistleblower-shook-th...
- maxerickson 8y agoApparently Theranos wasn't above advertising their broken tech as a tool for Ebola response: https://twitter.com/JeremyKonyndyk/status/998998156661706753 https://twitter.com/JeremyKonyndyk/status/998998156661706753