Everything I've heard about this company is just weird. A biotech company started by a 19 year old Stanford dropout. She didn't even finish her second year in college, so she never made it past the intro courses.
I can understand a 19 year old starting a software company, but this is more like a 19 year old starting a semiconductor fab. Someone just gave a her millions of dollars and a decade to run what was basically an r&d lab with almost no relevant experience?
Then the company's board is composed of 2 former Secretaries of State, a former Secretary of Defense, 2 former Senators, a retired admiral, and a retired general. They only have one currently licensed physician (who also happens to be one of the former Senators), and no current CEOs [1].
My guess is that in the beginning it had something to do with VC's being desperate for an attractive, brilliant, successful female founder with world-changing ideas that could be slapped on magazine covers to show everyone that yes, they do invest in women. After the first round it's much easier to raise subsequent rounds, and the whole thing may have fed on itself - investors throwing good money after bad, both to save face and to chase the glimmer of hope that they were getting somewhere with this. Elizabeth Holmes has somehow kept the money flowing for a decade from extremely credible people, which means she is far better at placating investors in the face of slow progress than perhaps anyone in recent Silicon Valley history.
Yes. In 2003, when she started the company at 19, Draper etc invested & other well known SJWs like Henry Kissinger & George Shultz joined her board because of her gender. They both knew & give a shit that a decade later people would be talking about diversity. For 12 years, she flipped her blonde hair & the men were fooled-& the money just kept pouring in.
Do you really think VCs would invest $400 million & Walgreens & Cleveland Clinic would do deals with this company, that put people's health at risk & create massive liability, without diligence because she is a woman?
Maybe Theranos will fail. Obviously fraud is unacceptable. And the lack of peer review helps no one. But, the idea that she was funded because of her gender is absurd. If anything, given all the data on this topic, she was funded in spite of it- because she was trying something very difficult & potentially revolutionary--not some dumb app.
I hope you'll reconsider your thinking on this. Its hard enough for women to get funded; maybe it's worth giving them the benefit of the doubt when they do.
> Do you really think VCs would invest $400 million &
> Walgreens & Cleveland Clinic would do deals with this
> company, that put people's health at risk & create
> massive liability, without diligence
Yes.
One way to help yourself swallow a bad decision is to look at all the other people also making it, and convince yourself that if they're doing it, it must be all right.
Investments in companies mostly make money evaporate as a standard practice.
Large-scale investors gravitate towards big risk/big reward ventures which require significant capital because it's saves having to make a zillion angel-scale deals. Plus, it seems sexier with extra-awesome brownie points to go after something which may be r/evolutionary.
PS: Color was a snausage clusterfuck of dbag, hubris behaviors that ruined the team (and the venture). Hopefully, that elicited a corrective learning experience.
You bash him because he had the audacity to wonder and have an opinion about how gender could have related to the publicity and valuations.. considering how we are constantly bombarded by p.c click-bait articles on female founders and such stuff, it does not seem so silly after all. Then you use the gender card to have us give her the benefit of the doubt just because she is a woman... well played :)
To raise another, less misogynist, possibility: she does indeed appear to excellent at selling her idea. So maybe that let to her success in VC circles. There's also a lot of precedent in people dropping out of college and being success. Not just with software but also, for example, hardware – which is more similar to biotech. Considering the Wozniak/Jobs success with hardware in the 80ies, I don't find it entirely implausible that a smart hacker could be successful in biotech even without a doctorate these days.
Biotech is nothing like computer hardware in the 80s, for one you can't do it out of a garage with a few hundred dollars worth of equipment. You need money and credentials just to get started for practical and regulatory reasons.
It's more like starting Intel than Apple.
I do agree with you though that it's probably her sales ability rather than her gender that led to the investments. I think it's likely the investors thought she'd make a great cover story, and that contributed somewhat to her success, but I doubt her gender was anywhere near the defining reason.
Welcome to modern medicine. Starting with the Reagan administration, oversight over medical devices has been greatly reduced. You have a lot of leeway with medical devices, even moreso than with drugs.
Lots of billion dollar medical companies have leading politicians on their board. Donald Rumsfeld was on the board for Gilead Sciences. It is vital for these businesses that to be on good terms with the government, as it is the government helps define what is allowed.
Some would argue that this is just a form of corruption which endangers the lives of patients worldwide.
Donald Rumsfeld was on the board for Gilead Sciences
Donald Rumsfeld was a biotech CEO before he got into politics! Why wouldn't you want him on the board of your biotech?
You seem to be twisting the facts here. I would also argue that the most drastic change with the FDA wasn't during the Reagan years, but during the Clinton years and Clinton himself wasn't really leading the effort.
Rumsfeld was not a biotech CEO before he got into politics, he was a pharma CEO about 30 years after he got into politics, a few years before coming back as SecDef ~25 years after holding that job in the Ford Administration.
OK, poorly worded. He started in politics early. However, did have a long career in business as the CEO of Searle. It shouldn't be surprising that he was on the board of directors of another biotech.
> Starting with the Reagan administration, oversight over medical devices has been greatly reduced. You have a lot of leeway with medical devices, even moreso than with drugs.
To be fair about having only one currently licensed physician, they do have Bill Foege on the board and he is a world renowned physician credited with coming up with the strategy that eradicated small pox. Just because he is retired doesn't mean he isn't still sharp. The man is brilliant and very thoughtful. The makeup of the board is pretty strange though.
He is an epidemiologist.
I would have expected haematologists, chemical pathologists, cytopathologists, clinical biochemists, histopathologists and other relevant specialists on the board.
At the moment, there is just a trophy, retired epidemiologist.
You don't know what her coursework was a Stanford. She may well have skipped the intro classes.
I don't think the makeup of the board is that weird. Yes, it may mean they're shady and are trying to leverage political connections as much as they can. But even if they had a great product, dealing with regulators would still be a huge problem/pain for them, and they would still ideally want a board with lots of politically influential people.
There are many reasons to be wary of Theranos. I don't think the board makeup and Holmes being a dropout are among them.
>I don't think the makeup of the board is that weird.
There's not a single person on the board who is an expert in anything close to their core technology. I can understand wanting some politically influential people, but only politically influential people. How is that not weird?
> You don't know what her coursework was a Stanford. She may well have skipped the intro classes.
I'm fairly certain Stanford some curriculum requirements. Even if they didn't, no matter how smart you are, you can't just hop in and start taking upper level Chemical Engineering classes because you took AP Chem in high school. There's too much prerequisite knowledge that you just won't have.
You do realize that boards of companies are not involved at all in the day to day operations of companies? Boards are useful for 1) meta governance (e.g. hiring CEOs, setting CEO compensation) - presumably Elizabeth Holmes has control, at least moral authority as founder if not voting control, so this is somewhat moot; and 2) connections.
And you definitely can start taking upper level chemical engineering classes. It's very common in college to ask to pass out of a requirement by taking the final. I passed out of the required intro computer science course in college (and not with AP Computer Science), for example.
>You do realize that boards of companies are not involved at all in the day to day operations of companies?
Pretty much everyone thinks this board is weird. There have been multiple articles written on how odd it is, and most companies tend to have multiple domain experts on the board. You won't find many companies outside of the defense industry with 7/11 board members who are retired political and military leaders.
For an example of a normal board of directors just look at a competing company's board--quest diagnostics--and notice the number of MDs, PhDs, financial experts, and CEOs of other companies, and the lack of former cabinet secretaries, senators, and retired generals. http://ir.questdiagnostics.com/phoenix.zhtml?c=82068&p=irol-...
>And you definitely can start taking upper level chemical engineering classes.
You can't walk into Stanford and start taking junior and senior level chemical engineering classes as a freshmen, you would have a complete lack of prerequisite knowledge.
>It's very common in college to ask to pass out of a requirement by taking the final.
It is not very common, in fact it's pretty rare these days to find a department that will allow this.
Even if they did allow this, there are stacks of prerequisite chemistry, math, physics, and general engineering classes before a student can even touch classes in the chemical engineering department (other than special classes like freshmen seminars).
Just because the media likes to talk about it doesn't make it true.
It is totally common to skip prereqs. When I say common, I don't mean everyone does it. I mean every year a handful of students do it. In fact, it's probably more common at the top science/engineering colleges (MIT, Stanford, Caltech, Berkeley, etc.). I mean, every year these schools have a couple of geniuses that won gold medals at the IChO/IMO/IOI/other olympiads, have been taking college (not community college) courses while in high school, and/or did legitimate research while in high school (and I'm not talking about the "research" volunteerships that many high schoolers try to get), etc.
I went to Berkeley, and the EECS department let you skip any prereq by taking the final.
I can understand a 19 year old starting a software company, but this is more like a 19 year old starting a semiconductor fab. Someone just gave a her millions of dollars and a decade to run what was basically an r&d lab with almost no relevant experience?
Then the company's board is composed of 2 former Secretaries of State, a former Secretary of Defense, 2 former Senators, a retired admiral, and a retired general. They only have one currently licensed physician (who also happens to be one of the former Senators), and no current CEOs [1].
[1]. http://fortune.com/2015/10/15/theranos-board-leadership/