The Great Unicorn Unravelling, Hello, Theranos

Elizabeth Holmes, founder of Theranos. No doubt she is brilliant. It's not easy to get into Stanford, much harder to start a biotech company and receive $88 million+ in funding. However, questions on the relative secret nature of the company's technology(using finger pricks to conduct a wide range of blood tests) have been raising eyebrows for quite sometime. 

In particular, the decision to not subject data from the supposedly revolutionary medical device caused concern in the medical community. 

It appears that indeed, we should have been more skeptical all along about a medical device startup that only had filled its board with mostly highly influential political figures. 

The business press had initially failed to do the required due diligence required.  She was the next Steve Jobs, Inc. Magazine crooned. 

Theranos may well turn out to be revolutionary and all this brouhaha will be a small roadbump towards a brave new, needless future. Or not

Troubling signs all is not well:

  1. Partner Walgreens seems to be surprised by recent revelations is "reviewing" its relationship with Theranos. It's also halting any further expansions of testing centers.
  2. GlaxoSmithkline denies having worked with Theranos, despite assertions to the contrary by Theranos.
  3. FDA declares the company's "nanotainers" an "uncleared medical device" and blasts quality control. Finger prick technology approved for only one test. Read full FDA documents here
  4. Furious denunciations by Ms. Holmes aimed at the WSJ, without actually presenting any evidence to disprove the Journal's expose.

To Ms. Holmes credit, she finally relented on providing data for peer review. 

Worship the unicorn

Perhaps what has made this particular story so sensational was the flood of positive P.R. the media showered on Ms. Holmes. The stories seemed to feed on each other in almost an infinite positive feedback loop: each cover story gave birth to numerous other breathless articles, which led to more cover stories etc. Being the youngest female billionaire lent her a legendary, almost mythical quality in a day and age obsessed with wealth as the ultimate barometer of success. Hype seems to be the name of the game during this reign of unicorns. 

I guess the lesson I take away is to question everything: whether its a billion dollar company or that pre-launch startup.  Best to look beyond the hype and see whether everything adds up.

UPDATE:

Theranos apparently has decided to restructure the board and replace it with three! new boards: including one focused on medical component(finally!).