How did Theranos get started?

[Elite Engineer]

Theranos started was started in 2003, by a 19 yr old Standford freshman named Elizabeth Holmes. Apparently, using research from her college professor, she claimed to have an idea or theory of revolutionizing blood tests. Now in 2016, she's a billionaire, with a company that has virtually no results and no product.

 

My question is, how did this company ever get off the ground, by a 19 yr old college freshman, that had no answers, no solution and no product? I know right now, the company is going through some major scrutiny, and maybe fraud.

 

~ee

[StringJunky]

She's probably holding investors money... it's not hers. She likely offered shares based on a promise..

[Sato]

Reading the history of the company, some I've read to be very sharp people and firms have invested a lot of money into Theranos. I think it's most reasonable to consider that they had their own expert advisors review the work. In any case, I don't think it's so out there that a private research company is being accused of skewing results, more so that they're trying to keep specifics hidden. We'll have to wait and see until they release their data, or not, if they're BSing or legitimate, otherwise I'm not so sure the valuation ought to be so big.

 

It looks like at the beginning, more than a decade ago, there were promising results. Her professor / research advisor at Stanford and other academics later joined in on the venture, so they must've seen something in it too—other than green. With this professional backing and the hype of a 19 y/o Stanford drop out "visionary" to present it, I don't think it's surprising that they didn't have trouble getting backing.

 

As for her research ability as a 19 year old freshman, I've been acquainted with three separate individuals, now in their early 20's, who are running companies doing biotech research, who either dropped out of or didn't go to college. The trend is they learned most of the standard biology and chemistry material, had access to labs to get physical familiarity, began reading papers, generating ideas, and working on them in high school. Each of their projects had been accepted and reviewed in getting funding by scientific and technical organizations, and others in the industry, usually with a handful of academic advisors on board. However, I distinctly recall one of their girlfriends griping that he would never share any results, data, or proprietary information with her.

[Elite Engineer]

Reading the history of the company, some I've read to be very sharp people and firms have invested a lot of money into Theranos. I think it's most reasonable to consider that they had their own expert advisors review the work. In any case, I don't think it's so out there that a private research company is being accused of skewing results, more so that they're trying to keep specifics hidden. We'll have to wait and see until they release their data, or not, if they're BSing or legitimate, otherwise I'm not so sure the valuation ought to be so big.

 

It looks like at the beginning, more than a decade ago, there were promising results. Her professor / research advisor at Stanford and other academics later joined in on the venture, so they must've seen something in it too—other than green. With this professional backing and the hype of a 19 y/o Stanford drop out "visionary" to present it, I don't think it's surprising that they didn't have trouble getting backing.

 

As for her research ability as a 19 year old freshman, I've been acquainted with three separate individuals, now in their early 20's, who are running companies doing biotech research, who either dropped out of or didn't go to college. The trend is they learned most of the standard biology and chemistry material, had access to labs to get physical familiarity, began reading papers, generating ideas, and working on them in high school. Each of their projects had been accepted and reviewed in getting funding by scientific and technical organizations, and others in the industry, usually with a handful of academic advisors on board. However, I distinctly recall one of their girlfriends griping that he would never share any results, data, or proprietary information with her.

I can see a "19 yr old visionary" as a nice sell to start a company, and maybe interest investors. But what investor is going to get behind such a "company". Theranos in it's early days had no product or even prototype. Even at this point, I could excuse a few million dollars in investing, but the company is worth $9 Billion dollars...and Holmes alone is worth a billion..with no physical product or even close to promising results. The NYU student who made Medi-Gel isn't even worth a fraction of a fraction of Holmes net worth, and he made a product that is actually being used and works. I've read that her parents had congressional connections, and that Henry Kissinger is on her board of directors.

[swansont]

I can see a "19 yr old visionary" as a nice sell to start a company, and maybe interest investors. But what investor is going to get behind such a "company". Theranos in it's early days had no product or even prototype. Even at this point, I could excuse a few million dollars in investing, but the company is worth $9 Billion dollars...and Holmes alone is worth a billion..with no physical product or even close to promising results. The NYU student who made Medi-Gel isn't even worth a fraction of a fraction of Holmes net worth, and he made a product that is actually being used and works. I've read that her parents had congressional connections, and that Henry Kissinger is on her board of directors.

 

!

Moderator Note

 

You have no knowledge upon which to base any speculation at all. Whatever they are doing is undoubtedly secured by NDAs, so all you have is guesswork and argument from personal incredulity. And on top of that, you throw conspiracy into the mix. (along with absolutely no links to anything)

 

Sorry, that's not going to fly. You need to back up your argument.

 

[Endy0816]

My thinking is that you might simply miss something with too small a sample size. I'd be curious what the researchers among think is reasonable in their own labs.

 

 

There have been a number of articles recently,

 

http://www.wsj.com/articles/fda-inspectors-call-theranos-blood-vial-uncleared-medical-device-1445967607

http://www.wired.com/2015/10/theranos-scandal-exposes-the-problem-with-techs-hype-cycle/

http://www.wsj.com/articles/u-s-probes-theranos-complaints-1450663103

 

Overvaluations aren't really unusual. You need a few people to get it going, but then things can snowball. I think a lot of it is just the appeal of not having blood drawn.

 

Henry Kissinger being only one of a score of prominent names. Incidentally several have distanced themselves.

 

https://en.wikipedia.org/wiki/Theranos

[koti]

On 1/1/2016 at 5:21 PM, Elite Engineer said:

Theranos started was started in 2003, by a 19 yr old Standford freshman named Elizabeth Holmes. Apparently, using research from her college professor, she claimed to have an idea or theory of revolutionizing blood tests. Now in 2016, she's a billionaire, with a company that has virtually no results and no product.

 

My question is, how did this company ever get off the ground, by a 19 yr old college freshman, that had no answers, no solution and no product? I know right now, the company is going through some major scrutiny, and maybe fraud.

 

~ee

I just watched "The Inventor: Out for Blood in Silicon Valley" which was amusing to watch. There is a very potent explanation in the film for the reason why this massive fraud went unnoticed  and prominent people baught into it making Elisabeth Holmes a billionaire. One of the spin doctors in the documentary explains research they did on people who were given dice and were asked to throw them. Whenever the dice stopped they were told that they will be payed an amount in dollars that the die gave and that they can choose either the top or the bottom value so if a 1 comes out you can choose the 6 at the bottom and get payed 6 dollars. The testers weren't looking at the results and deppended on what the people who threw the dice told them. Obviously the 6's were coming up far too often than what proabability suggests. Then they repeated the experiment but hooked the people to lie detectors, the results were obvious - people lied about the results and the lie detectors were clearly showing it. They repeated the experiment again for the third time including the dice and the lie detectors but this time the people were told that everything they get payed will go to a charity they choose. The results were exactly the same, people still lied about the results but a "small" exception occured - the lie detectors showed nothing, people were not lying. Apparently when you are convinced youre doing something good and useful, your conscience is clear and you feel you are in fact not doing anything unlawful or deceitful. I think this is exactly the mechanism behind the mind of Elisabeth Holmes and the whole "Theranos" charade. She believed so much in her doings that she was able to convince prominent people of it. Even the lab chemists and engineers who knew exactly what was going on and that the whole project is a scientifically not viable farse were believing in her. Interesting case of sociopathic behaviour combined with various skills, factors and circumstances that enabled her to ride this wave. She comes out of this to me as a Deepak Chopra of the silicon valley character, its unbelievable how far you can go with high emotional IQ, deception, lying straight up to everybodies face while having nothing as a product and nothing as far as scientific evidence while walking a highly sophisticated path of medical testing and claiming to revolutionise it.

Short answer - She's a master of deception. 

Edited April 20, 2019 by koti

[CharonY]

Tbf, this is true for a lot of those folks. Investors are rarely interested in the technical stuff. It is telling that she targeted tech investors and not do much pharm.