Theranos the Silicon Valley Health technology Fraud

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(Edited)

Theranos, the future that never came. You will imagine why I will use that word the future that came, then sit and read this post to the end and you will know what happened to the company looked like the new innovation in the health industry and how it became a house of cards.

Founded in 2003, the company was seen as the change in Silicon Valley and was supposed to be the game changer in the health industry as well as a boost to technology, founded by Elizabeth Holmes who was a Stanford dropout but bounced to come out with something innovative (Did you say a drop out?). A lot of drop outs have done a lot of amazing things like Bill Gates of Microsoft but for Theranos, it was different. The company fooled a lot of people and received over $9 million dollars from investors for funding.

Who wouldn’t want to be a part of an innovative technology of a blood analyzer which can run and analyze blood sample from a finger prick from home? You can imagine what it looks like to be a part of such a great innovation.

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How it started

Elizabeth Holmes, after coming from China and experiencing the SARS ourtbreak decided to do something about it to help the situation. She wanted to create a wearable patch which could test blood of the person wearing it and immediately prescribe the right dose of medicine for the person. Just like most successful tech giants, her passion made her drop out of school and she started her own company.

Do you think someone with little or no knowledge in medicine can do much with medicine?

So doing such a project can be very difficult so the plan changed. The idea completely changed to a using a cartridge reader system, where a patient’s blood sample will be collected into a cartridge by a simple prick and the sample will be inserted into the Theranos machine which will run the test and the result data will be sent to a lab to read the result and the result would be sent back to Theranos. In one year, she had gotten $7 million from investors who wanted to invest in her innovation since it took lot of blood, and days for the traditional test to come out complete and send result to patients.

The company designed the machine to be portable, faster and did not require a medical practitioner to do the test. The machine was going to be designed to allow different components for testing different type of infection in small box so it can run a test on all type of infection. All this would have been through except for the fact that it wasn’t true since machines for running tests of various types were big and set space apart because of issues related to heat, counter function and interference between the components, also the sample taken would not be enough to give adequate result.

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Soon Theranos designed the Edison machine and this got her more investors as being a good marketer can get people to invest even without seeing the product. She knew how to sell the product idea to investors and how to convince them that the product was working. Soon, her employees realized that she was lying to investors and anyone who dared to challenge her would be fired, one of the people who got fired was the company’s chief financial officer who challenged her. There was a time the issue of swindling people of their money on a product which wasn’t working go to the boards and they decided to fire her but she was able to get her position back and immediately fired those against her.

Elizabeth got $140 Million from Walgreens and Safeway who wanted to partner with them as they didn’t want their customers to go anywhere else to get tested as they believed in the innovation. The companies requested for their Theranos machines but didn’t get any so the companies sent tests to Theranos to run them on their Edison machine but Theranos did this testing via traditional 3rd party laboratory machines.

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In 2014, Elizabeth got to fame appearing on so many newspapers and magazines from Forbes, Fortune magazine, Inc, FoX Business, CNN Exclusive, CBS News and also appeared on TED show. She became the US ambassador for global entrepreneurship during Barack Obama’s Tenure.

Theranos saw its loo when family friend who had experience in medicine but wasn’t invited to join the company decided to find loopholes with the machine and the company. He wanted to bring the company down but the company kept on getting investors including the Walmart brothers and at this point, the company was worth $9 billion. A company without a working product worth this much? Employees were unable to talk as they were made to sign a non-disclosure agreement. Her Family friend revealed to the Wall Street Journal, things that were going on in Theranos and Wall Street Journal did their investigations and published an article on 15th Octorber, 2015 after which the FDA came to investigate the machine only to find out that only 12 of 250 test were performed and the 12 results weren’t accurate and with this, Theranos saw its fall as it filed for bankruptcy in 2018.



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