Theranos was promised to be one of the most revolutionary medtech companies of the century. However, Theranos eventually got liquidated and deemed as a failure, and thus provides essential lessons for the dos and don’ts of a Silicon Valley startup, especially in the tech industry. John Carreyrou’s Bad Blood is written about the upcoming Silicon Valley unicorn gone bust: Theranos. Founded in 2003 by Elizabeth Holmes, Theranos had one goal: to be able to test blood with the prick of a finger using a hypodermic needle and receive results instantly (Lowenstein, 2018). While the idea was extremely smart, the technology behind Theranos was far-reached with little possibility of being produced within the decade. At its peak, Theranos was valued at nine billion dollars, higher than Uber and Spotify at the time (Carreyrou, 2015).
There are two lessons which I ultimately believe we can learn from the downfall of Theranos. Firstly, the lean startup method is recommended to be used in the technology industry as it is an efficient way to gain customer feedback and test your product. While the prospect of the Theranos minilab was alluring, it never became functional. This may largely be due to the fact that Holmes did not adopt any concepts of the lean startup method, and instead went against it by rigid planning and lack of customer feedback. The second lesson is with regards to the importance of trust in the startup world. Whilst trust was betrayed in Theranos as Holmes made false promises and never followed through on her word, one of the reasons Theranos survived for so long was ironically trust. As Holmes gained investors such as Rupert Murdoch, they evidently placed trust in her and her company. What we can learn from this is to consistently question what we know and ensure that all information given is backed up by facts, even when considering the most innovative ideas in the world.
References
Carreyrou, J. (2015). Hot Startup Theranos Has Struggled With Its Blood-Test Technology. [online] WSJ. Available at: https://www.wsj.com/articles/theranos-has-struggled-with-blood-tests-1444881901 [Accessed 24 Jan. 2019].
Lowenstein, R. (2018). ‘Bad Blood’ Review: How One Company Scammed Silicon Valley. And How It Got Caught.. [online] Nytimes.com. Available at: https://www.nytimes.com/2018/05/21/books/review/bad-blood-john-carreyrou.html [Accessed 24 Jan. 2019].
Hi Nelly! Very interesting post. I also happen to read Bad blood when it came out a couple of years ago and I agree with your finding about Theranos. Another point which I found interesting is that she was a female entrepreneur in Silicon Valley which is why it is pity that her startup was ultimately a failure as she could insured many other young women around the world.