[palakchokshi]

This explains to some extent why investors might have given the company that valuation of 9 billion. If the company faked demos and portrayed results obtained on non Theranos tech as Theranos tech results, most investors can't be blamed for believing the tech worked and it was only a matter of time before all tests could be performed by the tech.

What is baffling to me is unless the data was doctored why didn't any one of the medical consultants or partners bring this up sooner? Why did it take a deposition to reveal this? I'm sure whistleblower protections would have been provided to anyone working there with this knowledge who chose to make it public.

[inetknght]

> why didn't any one of the medical consultants or partners bring this up sooner?

Outside of direct "I physically see this patient", people can forget they work in medicine where their answers can mean life or death decisions.

In that situation people end up not wanting to bite the hand that feeds.

When you have automated stuff that has high throughput with little or no human interaction, you seriously limit the opportunity for humans to raise questions.

[_Codemonkeyism]

Totally agree, not sure why they've killed your karma.

Between taking a pay cheque and whistle blowing, the large majority of people will always not rock the boat and take the money.

[epmaybe]

I think you're referring to the people working for theranos itself. However, investors generally try and do their due diligence before investing. Did none of the investors seek an expert to verify the claims made by Theranos prior to investing?

[rdtsc]

There is a concept of self-deception. During a con, a successful conman does very little, they "just" have to prime the mark. After they bite, then they fool themselves so to speak.

Just because VC have money doesn't necessarily imply they are more rational or better thinking. Everyone involved here wanted this to be real and true. So while on paper due diligence was done, unconsciously nobody wanted to lift the curtain too much and peek what's behind.

This is also very common with software testing. Often when developers are testing their own software, they are not very good at discovering bugs and so they end up in production. This happens because even though rationally they want to ship a better product, irrationally it is hard to get into a mentality of proving that the product you just sweated months on is broken, or bug ridden or unstable and so on. So tests are written but they are written to show make them pass and show that stuff and unconsciously avoiding the trick or edge cases that would reveal brokenness.

[Nanite]

Yes, and this is why you won't find any reputable biotech VC on the investor list of Theranos ( Mostly a mix of private equity, family funds and informals) . Biotech VC's have domain experts in house or in their network who won't take the narrative at face value and do ask the hard questions.

[inetknght]

I write software which analyzes DNA. It's pretty interesting to hear the varied responses from lab staff when questions are asked. Many times, however, questions (or sometimes answers) end up being overridden by business needs (aka deadlines). Being a business, that's rather expected to happen now and then.

But it bothers me that many of the questions that end up being unanswered are typically some of the more fundamental questions I ask.

[manigandham]

> investors generally try and do their due diligence before investing

They don't, especially in SV. Several of them have written about this. Beyond some cursory checks, they don't do much since it's often too expensive and time consuming to investigate every possible deal. A strong team with good connections and referrals is usually enough.

[verulito]

I recall reading on Quora that the CEO used family connections to land her initial funding from some reputable investors. They may have glossed over the due diligence. The rest just piggybacked on the reputation of the early investors. There may have been some or many which did that diligence but since they didn't speak up, we'll never know.

[charlesdm]

Herd mentality? Later stage investors probably assumed the early stage investors did their homework, while ultimately no one really did (or the early investors weren't at home enough in the space to realise the product wasn't properly working, or results were being faked, etc)

[epmaybe]

I think that's a more accurate reason. And it's equally likely that theranos just turned down investors that tried to dig too deep.

[eastWestMath]

Any chance those physicians will be facing investigations?

[inetknght]

I'd be willing to bet that it's not just physicians though. Lab staff on the back-end who actually do the work don't have the same rigor of training as medical doctors do.

[fittingin]

Did you notice what happened to the original whistleblower that exposed Theranos in the first place?

[drspacemonkey]

I didn't - what happened?

[slimsag]

I was curious and googled a bit. Relevant part:

> In the past year and a half, the grandson and grandfather have rarely spoken or seen one another, communicating mainly through lawyers, says Tyler Shultz. He and his parents have spent more than $400,000 on legal fees, he says. He didn’t attend his grandfather’s 95th birthday celebration in December. Ms. Holmes did.

> “Fraud is not a trade secret,” says Mr. Shultz, who hoped his grandfather would cut ties with Theranos once the company’s practices became known. “I refuse to allow bullying, intimidation and threat of legal action to take away my First Amendment right to speak out against wrongdoing.”

https://www.techdirt.com/articles/20161117/15475936076/thera...

[bambax]

> what the hell is wrong with Theranos that they seemed so focused on attacking anyone who questions them, rather than focusing on actually fixing the problem

The problem is unfixable because it's a complete fraud. There is nothing. They're holding the fort for as long as possible, and it's amazing they've been able to hold it for so long.

[dhimes]

You see this behavior in politics also.

[DonHopkins]

<s>You don't say? Can you cite any recent high profile examples of that kind of behavior in public officials?</s>

[blaincate]

"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

a legit company will only go to certain extent to defend. They can still survive.

An illegit company will go all / full lengths to attack and defend. illegit company life depends on this !

[bspn]

Off topic: he's 95 years old?! I don't care how well connected he is, who thought it would be a good idea to have a nonagenarian on the board of a (supposedly) cutting edge health-tech company?!

[SophosQ]

Could you state reasons to support your assertion that a nonagenarian shouldn't be on the board of an innovative tech. Company ?

[aaron695]

95 years old do not have their full faculities.

Even if they were part if a very very small minority that did (if any exist), it would be hard to test for legally I'd imagine.

We judge people by their pasts, in extreme old age this is no longer applicable.

I do think it's a little sad the obvious has to be pointed out.

If not now, in the future you will have to deal with people getting old, hard truths will have to be dealt with at some point.

[ncallaway]

And what evidence, besides your random agism, do you have to argue that a 95 year old person shouldn't be on the board of a company?

[smohare]

To suggest that mental acuity is uniformly distributed with respect to age seems a bit "post-truth". The priors at play most definetly suggest much greater scrutiny of a 95 year old, but by no means should they be preclusive.

[toomuchtodo]

For the same reason an auto insurance company charges my 86 year old grandmother thousands of dollars per year more than myself; your faculties degrade with age.

[jstanley]

If nothing else, he'll almost certainly be dead soon.

[deepnotderp]

Lmao Morris Chang would like a word with your ageism.

[bronson]

Theranos and Boies teamed up to make his life hell.

https://www.techdirt.com/articles/20161117/15475936076/thera...

One might imagine what they'd attempt if he wasn't related to a boardmember, or if his parents didn't have $400K for legal fees...

[jacquesm]

Yes, that David Boies:

https://www.forbes.com/2003/05/28/cz_vm_0528sco.html

[themgt]

I remember in the 90s being a teenager reading Boies brilliant work shredding the Microsoft monopoly with such overwhelming skill, and he was almost a hero of mine. Since then I've realized he's just a hired gun, a genius with no morals or integrity who's in it for the money and nothing else. What a disappointment.

[ghaff]

If you only want lawyers to take cases on popular sides you're going to be disappointed. And, in fact, I'd argue that you're effectively arguing that only popular opinion should have good representation--which is pretty much at cross-purposes with the function of the judicial system.

[watertom]

ah, David Boies the champion of illegal, deceptive and awful business's.

[Svexark]

They called and threatened his mother. Private investigators followed him. He had $400,000 in legal fees from the layers they hired to harass him.

[kevin_thibedeau]

If ever there was a clear cut case of barratry this is it. Too bad it would take an act of God to get the state prosecutors to enforce that law.

[gyc]

And they probably would've done much worse if he wasn't the grandson of one of the board members at Theranos.

[lend000]

> I'm sure whistleblower protections would have been provided to anyone working there with this knowledge who chose to make it public.

From the Vanity Fair piece which brought a lot of this house of cards into the public light, it's mentioned that the teams were hyper-segmented and the secrecy even pervaded the organization. Nobody really knew what anyone else was working on.

[Shivetya]

One could have asked the same of the VW engineers involved in Dieselgate or the GM engineers who worked on the ignition switch and simply changed the part without changing the part number.

There are those who want to be part of the team and there are those who can really play on that feeling. Then there are those who just want that buck.

[Buge]

How often are parts changed without changing the part number? If it's a common practice, it doesn't have to be seen as malicious. Are there major/minor/patch level part numbers like there are version numbers of software?

[return0]

> most investors can't be blamed for believing the tech worked

in medicine, you need to be reviewed and mostly provide proof of your methods and results etc, just to publish a single paper.

Are you saying that investors are willing to not only be fooled, but give millions to the one who is fooling them without even checking if their claims are real? Sounds less like investors and more like gamblers tbh.

I don't understand why investors should be absolved from responsibility.