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It's a company with a high valuation, that's raised a lot of money and has been in the industry for 11 years (if I recall correctly) by now. Investigative journalism raised concerns that the company is a sham, which the company exacerbated by reacting in a secretive and defensive way - unorthodox approach for a company working in a field where scientific testing and results are the norm, and where breakthroughs are patented and (eventually) shared somewhat openly. Imagine if a search company like Google had been founded 11 years ago, and claims to have revolutionized web search, but then a reporter exposed that they don't actually use any of their own search technology at all (!), and instead they pay to license Microsoft's search technology Bing instead (!). And a major industry regulator has claimed they're operating outside regulation (FDA in this case for Theranos). When challenged about whether their technology works, they respond with what amounts to hot air and empty claims. That's where Theranos is right now. I was inclined to side with Theranos initially, since I've seen my own share of reporting hit-pieces where my insider knowledge made it clear the reporting was highly biased and essentially nothing but an all-out attack on the company. However, my opinion of them has been turning toward skepticism since I've seen them respond to criticism in a secretive way and by failing to substantiate their claims about their product. The cynical part of me is beginning to believe that Theranos is refusing to share real details because the data doesn't look good for them. If Theranos has not developed any commercially viable breakthrough technology for fingertip blood draws, and will continue to operate indefinitely by conducting regular venous draws using other firms' equipment, then their investment value cannot be sustained, because that's a substantially weaker business model, and different than what was claimed. Selling fingertip testing on breakthrough technology would make them highly differentiated (unique, only ones to do it), whereas reselling other firms' venous draw technology is minimally differentiated (they'd just be a lab, same as any other). Hacker News is a forum of entrepreneurial and hacker-minded folks, and I think we're all worried about what it means for that sector of the industry, or the tech industry as a whole, if the company turns out to have been a sham. It would not be good for Silicon Valley if Theranos turns out to be anything close to a Ponzi scheme. If in the end it's discovered that Theranos' technology does not work, that's how they may be viewed. It's an interesting story that concerns people. |
Theranos has nothing to do with the tech industry. Recent concerns in the tech industry regarding valuations have to do with the viability of business models, not the viability of technology. No one's questioning whether Uber's technology is feasible - they're interested in things like the unit economics and other factors that impact long-term profitability.
> It would not be good for Silicon Valley if Theranos turns out to be anything close to a Ponzi scheme.
Ponzi schemes are a specific type of fraud involving unsustainable recursive financing. If there's any impropriety at Theranos, that would probably be (another type of) fraud.