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].

The saying “team work makes the dream work” has never been more true. But the context in which it applies may be slightly different than what we are used to. Having played football from a young age, you often hear the phrase being said in the context of the sport. Scientifically and philosophically, it is the direct translation of emergent properties: When individual parts come together and characteristics which would not have been formed on their own arise (O’Connor, 2020). In an era defined by technological advancements, the phrase must now be applied to the companies which are leading our world economy. Because I believe that if companies can truly work as a team with their stakeholders, the dreams, or more realistically the necessary achievement of economic, social and environmental goals can be done. This is exactly what Iansiti and Lakhani (2018) argue in their HBR article, “Managing our hub economy”. In brief, the writers describe that the world’s leading tech firms, including Amazon, Google, Microsoft and Facebook in the USA and Tencent, Alibaba and Baidu in China have the ability to shape economies, as well as social stability.

As I started off with, “team work makes the dream work” was something I learned from football growing up. Using football as an analogy to the work which these tech companies do may seem highly obscure, but I believe that every business derives from a group of people with a goal. In principle, this is exactly what the sport of football is. The first lesson is, never neglect members of the team, no matter how little they may be contributing to the goal of winning. According to Iansiti and Lakhani (2018), all members of the ecosystem must be taken into account in order for technological hubs to succeed. The second lesson is to understand that a win is a combination of physical and mental training, as well as an element of luck. I believe that big tech companies need to compliment their innovative solutions with values of a higher purpose. Lastly, teams should understand that winning the game is only one step to becoming a successful team.

References

Iansiti, M., & Lakhani, K. R. 2018. Managing our hub economy. Harvard Business Review, 96(1), 17-17.

O’Connor, T. 2020. Emergent Properties. Stanford Encyclopedia of Philisophy.