Theranos is an interesting case. Benedict Evans tweeted something interesting the other week [0], how Theranos, unlike virtually every other Silicon Valley startups, was very East Coast in style. Particularly with its board full of old, famous politicians and DC figures like Kissinger and General Mattis.
I didn't really hear much about it until the WSJ blowup, but my perception was that Theranos wasn't in whatever scene that other startups are in when they get coverage from TechCrunch, etc. I know Tim Draper was an early VC backer (his daughter was childhood friends with Elizabeth Holmes), but did other Silicon VC know much about Theranos?
I know Theranos did end up getting TechCrunch-west-coast-style coverage (I mean, before WSJ blew it up). But I'm pretty sure that its very first press splashes were with the Wall Street Journal in Sept. 2013 [1] and then the New Yorker in Dec. 2014 [2].
The WSJ article was very interesting. Not just because it's ironic, given that a WSJ investigative reporter would be taking Theranos down. But because of the setup. It was weekend interview feature assigned to a Pulitzer Prize-winning editorial board member. And, unlike the New Yorker piece, was almost entirely a puff piece. Interestingly enough, though, the author describes the experience of having blood drawn via the fingerstick/nanotainer setup (i.e. the tech Theranos was aiming for).
Having your first public splash in the WSJ Weekend Magazine seems like a very East Coast thing. Amusingly, when Theranos was burning down, it was revealed that Rupert Murdoch had a $125 million stake in Theranos [3]. Which probably explains the WSJ puff piece, since Murdoch owns the WSJ.
This is all to say that Theranos's early years as a startup seems to have been much different culturally than the usual Bay Area startup. I wonder how Theranos would've fared or been different if it had operated like a highly-funded SV startup (Color, Clinkle, or any other high-funded startup that didn't die out) with the same hype and attention.
From what I understand theranos pitched a lot of the traditional life sci and even tech VCs, but these firms were very skeptical. Especially the biotech VCs do a ton of scientific / technical diligence before investing and theranos almost certainly wouldn't have made it through their diligence filter
I think a few notable VCs actually spoke out critically of theranos, can't recall which, but it is saying something if a VC goes on record publicly criticizing a high profile starrtup
The suggestion someone here made is that it was not an attempt to make an actual product, but a scam to defraud the US military. The idea was to get the military to buy the technology for a multi-billion dollar price and later bury that it didn’t work. My memory is some lowly lieutenant refused to sign off on the deal ordered by a four star general and the whole thing fell apart.
This scam was the reason for the board structure and the rather interesting way Theranos went about developing their “technology”.
Theranos tried to get their tech bought by the military and used now SecDef, then Gen. Jim Mattis, then a Theranos board member, to shepherd the product through the military procurement process.
They were stopped because DoD regulations state that medical products used by the military have to be cleared/approved by FDA (or in the process of a clinical trial). And Theranos was not on FDA’s “good” list at the time, having only sent one product through the clearance process out of the dozens they were selling.
That betrays Ben’s lack of understanding of life science startups. The reason pretty much everyone I know from that world was skeptical was because of the composition of the board and the lack of a credible scientific advisory board. I have not seen too many companies in this space without a good SAB.
I take it with a grain of salt when VCs find reasons to no-true-Scotsman failures like this. It's true that Theranos didn't follow the traditional path. But I think it's also true that Silicon Valley energetically built up the myths that made Theranos possible, from the grand scale (Technology is a fountain of miracles! Hard questioning of visionary founders is crass!) down to the small details (like Holmes's Jobsian outfits).
Brushing this off as "East Coast" lets us avoid examining our complicity. And our vulnerability. We could look at uBeam, for example, which is backed by a number of West Coast luminaries, including Evans's own A16Z. An engineer has an extensive set of posts on how dubious it is: https://liesandstartuppr.blogspot.com/
Theranos is different in terms of scale and visibility, for sure. And I do agree that they found a richer class of sucker elsewhere. But I don't think they're culturally any different than a bunch of other overfunded, never-could-have-worked, charismatic-founder failures around here.
I didn't really hear much about it until the WSJ blowup, but my perception was that Theranos wasn't in whatever scene that other startups are in when they get coverage from TechCrunch, etc. I know Tim Draper was an early VC backer (his daughter was childhood friends with Elizabeth Holmes), but did other Silicon VC know much about Theranos?
I know Theranos did end up getting TechCrunch-west-coast-style coverage (I mean, before WSJ blew it up). But I'm pretty sure that its very first press splashes were with the Wall Street Journal in Sept. 2013 [1] and then the New Yorker in Dec. 2014 [2].
The WSJ article was very interesting. Not just because it's ironic, given that a WSJ investigative reporter would be taking Theranos down. But because of the setup. It was weekend interview feature assigned to a Pulitzer Prize-winning editorial board member. And, unlike the New Yorker piece, was almost entirely a puff piece. Interestingly enough, though, the author describes the experience of having blood drawn via the fingerstick/nanotainer setup (i.e. the tech Theranos was aiming for).
Having your first public splash in the WSJ Weekend Magazine seems like a very East Coast thing. Amusingly, when Theranos was burning down, it was revealed that Rupert Murdoch had a $125 million stake in Theranos [3]. Which probably explains the WSJ puff piece, since Murdoch owns the WSJ.
This is all to say that Theranos's early years as a startup seems to have been much different culturally than the usual Bay Area startup. I wonder how Theranos would've fared or been different if it had operated like a highly-funded SV startup (Color, Clinkle, or any other high-funded startup that didn't die out) with the same hype and attention.
[0] https://twitter.com/BenedictEvans/status/972501945813381122
[1] http://archive.is/8dfJ7
[2] https://www.newyorker.com/magazine/2014/12/15/blood-simpler
[3] https://www.bizjournals.com/sanjose/news/2017/03/24/rupert-m...