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> Clinical labs are not regulated by the FDA, but fall under a far less arduous regulation known as Clinical Laboratory Improvement Amendments, or CLIA. I know

> Clinical labs are not regulated by the FDA, but fall under a far less arduous regulation known as Clinical Laboratory Improvement Amendments, or CLIA. I know a bit about the clinical laboratory environment through a close relation. In fact, that person was the first clue I had that Theranos was BS. (This was before the WSJ article or any of the whistle blowers had come forward.) Clinical laboratories are so resource constrained that FDA regulation would literally kill them. And many may not realize this, but 75%+ of any diagnosis is actually done by the lab. Care teams make hypotheses and labs reject them. I feel somewhat sympathetic to this article's thesis, that these "fraud" laws are meant more as a bailout for rich and powerful people as a way to pin blame on a scape goat. A regular person defrauded by a bank or some other professional would have no hope of bringing their abuser to a criminal trial. But demonizing then CLIA loophole as if it is some ghastly deviation only fixed by the Powerful and Mighty FDA seems short-sighted. Again, keep in mind that basically all lab scientists, all medical researchers who investigate lab procedures and all of the academics who study this and teach the next generation said Theranos was BS long before the government or press. No one listened to them.

simonh 5y ago
I suspect one reason why professionals in the industry were not listened to is that we are very used to hearing experienced voices in an industry in the process of being disrupted explain why the disruption can't happen and won't work, right up until it does both. The most famous example is the "PC guys are not going to just figure this out" quote regarding the iPhone. A lot of VCs will see people they regard as 'incumbents' being witheringly critical and think that's a good sign. Clearly there's a big difference between a businessman saying such things and professional scientists and clinicians.
- thathndude 5y ago
  This seems to be the most plausible explanation. I can remember Steve Ballmer, an undeniably intelligent and capable professional, laughing away the idea of the iPhone doing even single digit percentage market share. I don’t think it was just competitive posturing. He genuinely was down talking what is arguably the most successful consumer product of the last 50 years.
  - disgruntledphd2 5y ago
    I dunno, the PC itself has probably had more overall impact, but on a consumer level, smartphones are probably bigger I guess.
    - piyh 5y ago
      Smartphones have more impact. Smartphones are shipped in the billions each year and for most people on the planet it's their first and primary computer. PCs only ship in the 150 million per year range.
      - disgruntledphd2 5y ago
        Again, agreed on consumer. On society, definitely the PC as they've transformed pretty much every business and almost every home in the world. Like PC's have been shipping my entire life (approx 40 years), while smartphones (touch screen iPhone like etc) have only been around for the last 14. And how are all smartphone apps developed?
  - bildung 5y ago
    The difference seems to be that Ballmer definitely was an expert for all things commercial/enterprisey (he made MS quite a bit of money during his reign), but not an expert for consumer products.
    - sangnoir 5y ago
      > The difference seems to be that Ballmer definitely was an expert for all things commercial... That's exactly what Ballmer was commenting on - the iPhone's $500 price (IIRC) was going to cause sticker shock, had it not been spread over a 24-month contract period. When Job's announced the price, he didn't mention carrier financing.
  - xnyan 5y ago
    Steve Ballmer was making sales projection claims. His biggest objection was cost of the phone, and apple overcame that with carrier financing. He never claimed that was Apple was trying was not physically possible according to our understanding of technology, just that it was too expensive and too different to be popular. Professionals panning Theranos were not doing so because they thought it could not sell, or the cost, or other market-based concerns. They had "what you're saying is not possible based on my understanding of the physical world" concerns, and those questions were never answered at any point because it was a fraud and there was no answer.
- colechristensen 5y ago
  Scientists have exactly the same behavior, bias against the paradigm breaking new. Of course this does a good job most of the time filtering out crap, but any big changes that are legitimate are going to have a whole lot of pushback. “a new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents die, and a new generation grows up that is familiar with it.” listen to reason, not authority
  - matthewdgreen 5y ago
    I think it’s important to understand the difference between product/engineering skepticism (eg, it will be hard for a new entrant to build a great smartphone; it will be hard to break into the taxi industry with an app) and fundamental scientific skepticism based on a claim of some major scientific breakthrough. These are vastly different things, and (in my understanding) experts correctly realized that Theranos would have needed the latter for their product claims to be true. This is what the investors failed to internalize. I know it’s popular (and sometimes true) to blame scientists for failing to adopt new ideas, but I don’t think you get to play that card in a situation where the alleged ideas are being kept secret. And yet many do play that card. As a scientist if someone arrives with a product that implies a massive (but unpublished) scientific breakthrough, then I’m going to express polite skepticism until they publish their results. If for whatever business reason, the startup wants to keep their breakthrough secret (rather than publishing and patenting it), well that rings alarm bells — but even then surely the investors can hire outside experts to review the science under NDA. If the startup refuses even that, then I think you need to accept that the most likely possibility is fraud rather than someone figuring out how to bypass the laws of thermodynamics or whatever.
  - simonh 5y ago
    Are you suggesting the scientists in this case didn't give good reasons?
- baryphonic 5y ago
  I agree to an extent. The criticism was more like, "that seems physically impossible," like many of us might react if a story claiming someone had invented warp drive got to the top of HN. However, most of the knowledge about such things is "siloed" inside the lab science community itself, without much awareness from the outside. That being said, I think so few Valley VCs got duped because they actually did the due diligence and determined this was in the "not physically possible" realm.

simonh 5y ago

I suspect one reason why professionals in the industry were not listened to is that we are very used to hearing experienced voices in an industry in the process of being disrupted explain why the disruption can't happen and won't work, right up until it does both. The most famous example is the "PC guys are not going to just figure this out" quote regarding the iPhone. A lot of VCs will see people they regard as 'incumbents' being witheringly critical and think that's a good sign. Clearly there's a big difference between a businessman saying such things and professional scientists and clinicians.

thathndude 5y ago
This seems to be the most plausible explanation. I can remember Steve Ballmer, an undeniably intelligent and capable professional, laughing away the idea of the iPhone doing even single digit percentage market share. I don’t think it was just competitive posturing. He genuinely was down talking what is arguably the most successful consumer product of the last 50 years.
- disgruntledphd2 5y ago
  I dunno, the PC itself has probably had more overall impact, but on a consumer level, smartphones are probably bigger I guess.
  - piyh 5y ago
    Smartphones have more impact. Smartphones are shipped in the billions each year and for most people on the planet it's their first and primary computer. PCs only ship in the 150 million per year range.
    - disgruntledphd2 5y ago
      Again, agreed on consumer. On society, definitely the PC as they've transformed pretty much every business and almost every home in the world. Like PC's have been shipping my entire life (approx 40 years), while smartphones (touch screen iPhone like etc) have only been around for the last 14. And how are all smartphone apps developed?
- bildung 5y ago
  The difference seems to be that Ballmer definitely was an expert for all things commercial/enterprisey (he made MS quite a bit of money during his reign), but not an expert for consumer products.
  - sangnoir 5y ago
    > The difference seems to be that Ballmer definitely was an expert for all things commercial... That's exactly what Ballmer was commenting on - the iPhone's $500 price (IIRC) was going to cause sticker shock, had it not been spread over a 24-month contract period. When Job's announced the price, he didn't mention carrier financing.
- xnyan 5y ago
  Steve Ballmer was making sales projection claims. His biggest objection was cost of the phone, and apple overcame that with carrier financing. He never claimed that was Apple was trying was not physically possible according to our understanding of technology, just that it was too expensive and too different to be popular. Professionals panning Theranos were not doing so because they thought it could not sell, or the cost, or other market-based concerns. They had "what you're saying is not possible based on my understanding of the physical world" concerns, and those questions were never answered at any point because it was a fraud and there was no answer.
colechristensen 5y ago
Scientists have exactly the same behavior, bias against the paradigm breaking new. Of course this does a good job most of the time filtering out crap, but any big changes that are legitimate are going to have a whole lot of pushback. “a new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents die, and a new generation grows up that is familiar with it.” listen to reason, not authority
- matthewdgreen 5y ago
  I think it’s important to understand the difference between product/engineering skepticism (eg, it will be hard for a new entrant to build a great smartphone; it will be hard to break into the taxi industry with an app) and fundamental scientific skepticism based on a claim of some major scientific breakthrough. These are vastly different things, and (in my understanding) experts correctly realized that Theranos would have needed the latter for their product claims to be true. This is what the investors failed to internalize. I know it’s popular (and sometimes true) to blame scientists for failing to adopt new ideas, but I don’t think you get to play that card in a situation where the alleged ideas are being kept secret. And yet many do play that card. As a scientist if someone arrives with a product that implies a massive (but unpublished) scientific breakthrough, then I’m going to express polite skepticism until they publish their results. If for whatever business reason, the startup wants to keep their breakthrough secret (rather than publishing and patenting it), well that rings alarm bells — but even then surely the investors can hire outside experts to review the science under NDA. If the startup refuses even that, then I think you need to accept that the most likely possibility is fraud rather than someone figuring out how to bypass the laws of thermodynamics or whatever.
- simonh 5y ago
  Are you suggesting the scientists in this case didn't give good reasons?
baryphonic 5y ago
I agree to an extent. The criticism was more like, "that seems physically impossible," like many of us might react if a story claiming someone had invented warp drive got to the top of HN. However, most of the knowledge about such things is "siloed" inside the lab science community itself, without much awareness from the outside. That being said, I think so few Valley VCs got duped because they actually did the due diligence and determined this was in the "not physically possible" realm.