The Story of Theranos: A Bloody Failure Written by Max Zhang ‘22
I
magine the classic story of a Silicon Valley
which was to test the machine on patients with cancer,
startup. An aspiring student, set on an idea for
with full knowledge that her machines did not work.
a product that could change the world, drops
Despite this, the company barreled forward, eventual-
out of college to start their own company. As
ly making deals with Walgreens and Safeway to place
this idea grows, they gain traction and receive
Theranos testers in their pharmacies.
funding from investors in order to grow their
Up to this point, Holmes had been able to pres-
company to massive proportions, making millions in
ent Theranos as a viable company through a combina-
the process. This seemed to be the path that Theranos,
tion of half-truths and mild deceit; however, Holmes
a biomedical technology company founded in 2008, was
eventually began having to flat-out lie to keep Thera-
bound to follow. Theranos developed a family of prod-
nos afloat. She presented her investors with financial
ucts designed to conduct blood tests at home. The com-
reports that predicted profits ten times more than what
pany was indeed founded by a college student, named
documents inside the company predicted. Theranos
Elizabeth Holmes, who dropped out of Stanford to start
even presented lists of hundreds of tests to Walgreens
her own business. The company did indeed receive mil-
that they said could be run on their machines, when
lions from investors and grow to make million-dollar
in reality, none of those tests could be run with any
deals with the likes of Walgreens and Safeway. However,
measure of reliability. Eventually, the sheer number
looking back, Theranos is regarded as one of the worst
of lies that Holmes produced gave way to the fact that
disasters in the history of Silicon Valley.
Theranos was in reality, an ailing company with no
viable product. Following an article published in the
In order to understand more about how Ther-
anos came to be regarded as the worst failure in the
Wall Street Journal, those lies came back to bite her.
history of startups, it is important to understand the
Hundreds of millions were lost by both Holmes and the
central figure around its downfall, Elizabeth Holmes.
company as investors, patients, and companies sued.
Theranos was started in 2002, when Holmes, motivated
The important question to ask here is what to learn
by an idea for a wearable blood tester, dropped out of
from this. It seems there were two factors on Homes’
Stanford in order to start her own company. Eventually,
part that led to the eventual downfall of the company.
Elizabeth pivoted to the idea of an at-home blood tester
The first factor seems to be a lack of experience. The
that could carry out a suite of tests, tests which tradi-
fields that Theranos worked in, medicine and chem-
tionally would require machines the size of a printer to
istry, stand in stark contrast to the field of computer
carry out. Armed with this idea, Holmes used her own
science that traditional software or technology start-
personal connections to gain a sizable seed investment.
ups work in. These days, even teenagers can begin to
Eventually, a prototype was created that could run a
grasp the elements of coding and software engineering;
small number of tests with dubious results. This was
however, medicine is a field that is only really delved
when Elizabeth made her first morally questionable act,
into deeply at colleges and universities. Since Holmes
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