—https://www.bbc.co.uk/news/business-58494912
Background on Theranos & Elizabeth Holmes.
Holmes started Theranos in 2004 and dropped out of Stanford at 19 after raising $500,000 from Tim Draper.
Concept was being able to do all the blood test needed for tests such as cholesterol, STD’s, certain forms of cancer and basically any disease a person can imagine with a single drop of blood.
Go into a store, get a finger prick similar to a blood sugar test for diabetes and get blood test back with that, easily and cheaply.
No struggle to find a vein.
No fear of needles.
No fainting, which happens to about 1% of people during a blood test.
To give some info on the blood and blood test.
The human body has 5 litres of blood it on average.
1.3 gallons
A blood test on average is 3 millilitres.
0.06% of a humans blood goes into a test.
That doesn’t sound like a lot, but can actually be a big deal for a person.
Anything to reduce that would be a big deal.
Elizabeth Holmes & Theranos sold that pitch and sold it big.
Walgreens partnered with her to get it in every store.
724 million dollars was raised.
The company valuation hit 10 billion.
800 employees
Joe Biden, Bill Clinton and many more in politics, medicine, business and media went big on praising Holmes.
Elizabeth Holmes owned 40% of the company and was worth 4 billion.
Problem though and this is where Theranos success raising money gets weird.
9.2 million doctors exist on earth.
28 million nurses.
Biotech is 1.1% of all college degrees granted yearly.
Tens of millions of people have jobs that actively involve drawing blood.
Why didn’t anyone before Elizabeth Holmes think to ask “Hey, can we do this with less blood?”
And they actually all have.
Why every countries FDA’s have done a mountain of research into blood test and trying to get the proper amount of blood for accuracy on a test.
They all did that and the decision to use that amount of blood came from decades of research and testing.
Why it’s really strange a company started by a 19 year old with an average level of biology would solve this.
And Elizabeth Holmes raised the money, but never really had to prove what she created worked.
And this is shockingly really common in Silicon Valley.
People invest over hype, but don’t actually do much research.
uBeam raised money for a wireless electricity concept which was basically fraud.
Clinkle raised millions for a product which never existed.
Hello raised millions based on Kickstarter success and no actual proof of sales in retail.
Elizabeth Holmes belongs in jail, but every VC firm and angel investor should apologize to their investors for getting into this.
Kevin O’Leary from Shark Tank actually showed the communication with Theranos he had for investing 5 million into it, which was the minimum to invest. He asked if he can go see it work and bring an engineer. Was told no and that investors are fighting to get in and it’s an honor to be considered to give 5 million.
No live demonstration ever done
No third party confirmation
No explanation of it working
Just a concept basic common sense would call far fetched.