I love a good cautionary tale. Perhaps my medical background predisposes me to “post mortem” analysis – what exactly went wrong and why? There is a risk of the cautionary tale, however, in that it is easy to impose a preexisting narrative onto events. The tale can be easily coopted, and then you are not learning a lesson but just reinforcing an existing belief.
I will try to avoid that trap while discussing the story of Theranos, but I am picking this story because it does support a cautionary tale skeptics like to tell.
Theranos was a hot tech startup based on a “disruptive” technology developed by its young maverick founder, Elizabeth Holmes. The story was perfect for the tech industry, who ate it up. It seemed a little dodgy to the medical industry, however, who viewed it with skepticism.
Here is a good overview of the story, with a list of tech news articles fawning over the new startup. Even some news sites who should have known better, like Smithsonian Magazine, were taken in. Read this article – it reads like a marketing brochure for the company. It overstates the limitations and problems with current technology, and overhypes how revolutionary the new technology will be. It asks, but does not answer, the key question – how is this new alleged technology supposed to work.
The claimed breakthrough of Theranos was a streamlined process for laboratory blood analysis that promised to perform 30 tests on a single drop of blood with same-day results. This would eliminate the need for drawing vials of blood and replace that with a simple finger prick.
For any scientist there are immediate red flags. Each blood test, in a way, is its own technology. You don’t measure sodium in the blood the same way you measure glucose, or test for the presence of antibodies to a virus. Yet Theranos claimed to have revolutionized dozens of standard laboratory tests. This would require a massive amount of research and development, or the introduction of an entirely new technology.
Such technology does not come out of nowhere. Research builds upon other research and then is translated into practical applications. The myth of the lone researcher making breakthroughs in their garage is largely just that, a myth. But that image clings tightly to the public consciousness. This makes it easier to sell the narrative of the lone genius making breakthrough technology.
Perhaps the tech industry is especially susceptible to this narrative. A team of coders with a great idea can create a disruptive app that will change the game. Investors are looking for disruptive startups, nerds with a great idea and the next billion dollar company. Medical technology is different, however. There needs to be a paper trail, years of research leading up to the application.
Now that the true story of Theranos is coming out, it seems obvious in retrospect that the whole thing was a scam. First, their labs were conducting 70% of their blood tests on conventional machines using conventional blood draws. They claim this is just while they were waiting for FDA approval of individual tests, but still they were not delivering on their promise.
Second, Theranos just voided the last two years of study results that were being conducted with their technology, what they called the Edison machine. In essence they just admitted that their technology does not work, and the lab test results they provided were not accurate. The company, essentially, has completely evaporated. The company now faces a class action lawsuit.
Last year Forbes estimated Holmes net worth at $4.5 billion. Yesterday they revised their estimate down a bit – to zero.
If this is a cautionary tale, what are the lessons? The obvious one, of course, is to be skeptical. Treat every new exciting claim as if it is a scam until proven otherwise. Don’t buy corporate marketing propaganda. Ask the hard questions, like exactly how does this work?
There are genuine breakthroughs, but most claimed breakthroughs aren’t. The market is currently being flooded with snake oil and medical pseudoscience, so again, it is a good default position that any new claimed medical breakthrough is probably a scam, or at least overhyped.
Also, be skeptical of nice neat narratives. If a story sounds ready made for movie plot, it probably is just that – a fiction. We love stories of underdogs rising from obscurity by challenging the big boys. We love the lone maverick narrative, the young genius, the rugged individual not afraid to break with convention.
The truth is often much less glamorous and exciting. Progress in science is more often made by various teams each contributing their incremental advance. Ideas rarely come out of nowhere. The big advancements are ones that we saw coming 1-2 decades before they became a reality.
Be aware of common red flags: A company selling a new technology should be able to describe, at least in general terms, how the technology works. You can do this without giving away technical secrets. If they refuse to give a satisfying answer for whatever reason, be suspicious.
If the relevant scientific community is skeptical, you should be too.
If they are using science-sounding jargon but do not really make sense (such as talking about frequencies, or quantum mechanics) it is almost certainly a scam.
Theranos is certainly not a rare case. Companies selling pure snake oil are out there in the thousands. Theranos was perhaps just the biggest one. I also doubt that the tech industry has learned its lesson. The allure of billion dollar disruptive technology is just too great.