A few months ago I started blogging about my experiences in Silicon Valley and at startups, with a focus on the way the startup ecosystem actually works, and how it encourages the appearance of success to raise future funding or sell, rather than on actual technology and business progress. I drew heavily on my experience as VP Engineering at uBeam, and pointed out a strong similarity with another media darling CEO, Elizabeth Holmes of Theranos.
I've watched all the recent publicity surrounding Theranos, about a young, media-darling, Steve Jobs idolizing female CEO, who defies the skeptics and without any training in the field apparently makes strides that promise to change the world. Who raises millions on promises of ground-breaking technology that's just around the corner, yet never makes public demonstrations or subjects their technology to third party audit. A CEO of a company that never answers substantial questions raised by veterans in that field, or criticism that they are doing nothing but playing a smoke and mirrors game to fleece the next round of investors, but is more than willing to speak to the press on their 'vision' (and nothing more).
Well as of later today, all that will change for Theranos as unlike uBeam, who still have not released any details on their technology despite promises for both demonstrations and mass volume product in 2016, the company will finally present data to the public during the American Association for Clinical Chemistry’s (AACC) 68th Annual Scientific Meeting & Clinical Lab Expo in Philadelphia, PA.
This presentation comes at a difficult time for Holmes and Theranos, with the Centers for Medicare and Medicaid Services recent ruling resulting in the company having its licence to operate their main testing lab in California revoked, and Holmes herself banned from the blood testing business for 2 years. Earlier in the year, Theranos revised many test results it provided to patients based. Given this is the entire business of the company, it places them in great jeopardy, and normally would result in the immediate removal of a CEO who not only got them into this position, but whose continuation in that role would result in the closure of all other remaining lab testing components and effectively end the business.
But this is Elizabeth Holmes and Theranos, and the mentality here is one that mere mortals cannot comprehend. To Holmes, she is not the CEO of Theranos - she is Theranos. There is no company without her, there is no considering anything else. No matter the consequences she will not waiver, she would rather the company die with her at the helm than live under the guidance of another. It's the perseverance VC's say they look for in founders, that's more important than technical or business skills, to stay the course no matter the consequences, that's backfiring on them in the hands of a founder who has a plurality of stock and a majority of board seats. No matter what they think, what they say, their money is now tied up in the hands of someone who they have no control over, and who has decided they don't have to play by the normal rules.
If normal people's jobs and pension fund returns didn't depend on it, it would be hilarious watching the VC's deal with that monster of their own creation. And understand that people of this mentality care only for their 'vision', and the jobs or savings of others are simply tools for them in what is often considered their 'destiny'.
This mentality is partly why I am very much looking forward to seeing the presentation at the AACC. Founders with this type of thinking do not need facts or evidence to know what the truth is - their belief in what they are doing is so strong that they have convinced themselves it is fact, and that the engineers and scientists they employ are simply there to uncover that truth for others. Failure for systems to work or results to show them right are not evidence of their belief being wrong, but rather that their staff are not working hard enough, or aren't smart enough, or are even out to sabotage them.
They are used to setting arbitrary goals and deadlines that their teams scramble to meet, despite the workers knowing the impossibility of it and the pointlessness of trying to explain it to their CEO, who considers those who question based on reality as heretical and to be fired or driven out. When the deadlines are missed and goals not met, the CEO fires those who failed and new goals and deadlines are set, and the cycle continues.
These CEOs are not technology and business leaders, they act more like prophets of a new religion, where bringing their imagined technology to the masses is their destiny, their role in life. They believe their own press that they are technology geniuses, even when others did all the actual work in developing and implementing the products, and know in their hearts that if they present the information (rather than those incompetent scientists and engineers) then the public will finally understand their true genius.
It's this thinking that likely propelled Holmes to volunteer to present to the AACC - something the lead engineers in her company probably despaired at when they were told, and tried in vain to prevent happening. They probably understand that the data the public expects to see will not match with what the company can show, and that there will be one of two outcomes - that the public see data that shows the inadequacy of their technology and methods, or the public will see that someone is trying to present data in a way to hide the inadequacy of their technology and methods.
When presenting a product for the first time, particularly a ground breaking one with extraordinary claims, companies in the medical field collect years of meticulous data, yet it was as late as May this year that Theranos began collecting data for this presentation. As John Carreyrou of the Wall Street Journal reports
The company didn’t have sufficient data to present. The Food and Drug Administration had deemed studies Theranos had submitted—other than one for a blood test to detect herpes—inadequate, two people with knowledge of the matter said. Theranos needed to collect new clinical data to present at AACC, one of these people said.
Theranos started new studies in May and still is in the process of collecting and analyzing data from them, this person said.
I'm imagining the poor technical team from Theranos, up at 1am the night before the presentation, exhausted from weeks of desperately trying to massage the terrible data they have into something that's semi-presentable, and hoping to maintain some shred of professional credibility, yet being scolded by their CEO for the poor quality of the work and the lack of dedication.
And what do I expect to see in this presentation? Well, having been the Associate Editor in Chief of a peer reviewed scientific journal for many years, I can say I've grown accustomed to the various attempts people make to massage or hide bad data, and I am no longer surprised at what some expect they will get away with. I fully expect that's what will be done here.
They will fail to meet standards typically expected of peer reviewed papers - insufficient information to allow reproduction by another, no statistical data on all tests run and whether they are showing the cherry picked best results, showing results from the easiest tests, deliberately poor labeling of data or systems used to prevent direct comparisons, results from blood drawn in the normal manner and not finger-prick tests, changing the meaning of standard terminology to their benefit, and hiding behind 'company confidentiality' to name a few. Throughout this, the thread that will tie it all together will be an arrogance from the presenter that she is right and the 30,000 years of combined experience in the room are wrong.
But no matter how badly this presentation goes, even if utterly rejected by the scientific community of experts, I don't expect to see Holmes change one little bit. After all, these experts are just trained so much they can't "think outside the box" like she can. It'll just be another hurdle for her to overcome, and that history will prove her right, she just needs to persevere.
Sounds crazy? Yes, it does, but remember, CEOs like that don't live by the same rules as you or I. And then remember that the money that lets them act this way, might have come from your pension fund. But whatever happens at the presentation, the circus that is Theranos is going to provide interesting reading for many years to come, at least your retirement funds bought us all that.