The Fall of Theranos

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Elizabeth Holmes is the founder of Theranos. Theranos is a healthcare technology for consumers that has brilliantly changed the way of performance of blood tests by the diagnostic-lab industry (Fiala, jalm.2018.027474). The company derives its name from therapy and diagnostic. The company has invented a technology for the performance of blood tests using a single blood drop.  The technology offers a cheaper solution for blood testing despite being substantially faster in blood testing (Plebani, 2015). There has been an increase in the number of diagnostics performed annually with the records in America reading close to ten billion tests on a yearly basis. The increment in the number of consumers who want access to the personal data of Theranos, it has risen at the perfect time. Holmes, the founder, states that her ambition was the creation of a technology that would ensure that they redefine a paradigm for diagnosis away from the technology in which there must be a presentation of symptoms for a patient to be able to access information about he or she is suffering from. Theranos provides timely diagnosis so that patients can know what they are suffering from promptly for much quicker medical attention and ensure that the patients can get access to the testing at meager costs compared to the previous medical technology.

 Theranos had gained a lot of international attention as the technology offered a much faster and cheaper solution to diagnostic of patients. It was enjoying a significant market share as it was the best of the revolutions. It used the policy of confidentiality to ensure it continued enjoying the market by not disclosing their technical know-how. The major competitors to Theranos included Atomo Diagnostics and Blaze. Founded in 2010, Atomo Diagnostics offered the most significant competition to Theranos. It had slightly fewer employees than Theranos. Apollo Medical Services is the second nightmare to Theranos.

The Structure of the Business      

            Theranos Inc. is managed through a board of directors. The current CEO is David Taylor while the founder, Elizabeth Holmes is the chairman of the board. They have several directors such as Fabrizio Bonanni, William Foege, and Daniel Warmenhoyen. The company practices the principle of confidentiality among the employees and the board to ensure it maintains the lead in bio-medical technology. The company enjoys the annual revenue of about $100 million. Among its top ten competitors, its revenue is ranked second. It has an estimated number of employees of about 675. It is ranked the first in the number of employees among the top ten competitors. The company has done participated in five rounds of funding since its inception (Couzin-Frankel, 720). The last round which was in December 2017, the company managed to raise $100 million as debt from the Fortress Investment Group. In May 2017, it received funding in the form of equity amounting to $582.2 million. However, the company refused to reveal the source of the funding. In June 2014, it received $400 million, $45 million in June 2010, and unattributed equity of $28 in Dec 2006. The company had received investments from the world business giants. The major investors in the company included the Walton Family who had a shareholding of $150 million, Murdoch Rupert who is the executive chairman of News Corporation and 21s Century Fox who had shares worth $121million, and the Betsy DeVos, the Education Secretary.

The Downfall of Theranos

 The downfall of Theranos began when the Wall Street Journal exposed the filth within the company. Wall Street Journal posted on 2015 questioning the integrity of the company's owners and the reliability of the technology (Ioannidis, 389). In the article, there were serious concerns about the threat the company posed to the wellness and health of the people (Diamondis, 2015). There were claims the technology was inaccurate and produced faulty reports.

            The article also questioned the reputation of Elizabeth Holmes for her deception to the stakeholders (Couzin-Frankel, 720). She made them believe that using the technology; it was possible to conduct close to 200 regular laboratory tests without any external assistance in the form of analyzers. In reality, the company sourced analyzers from outside as it had no analyzers (Lackner, 1396). The external analyzers analyzed the blood samples using the traditional methods. They would then distribute the results to the customers who had the impression that it was done through the technology. The company conducted fake demonstrations of technology as a way of creating partnerships with pharmaceutical companies and raising capital.

            There was a great deal of secrecy in the company which also raised suspicion. Free conversations among the various employees were prohibited. The employees could only be informed of their roles upon employment but not during their interviews. All visitors to the company had to sign the non-disclosure agreement before being allowed into the company premises (Fiala, 1445).  There was a total lack of medical experience among employees such as Bulwani. The board of directors did not have the medical knowledge to understand what exactly the company was building clearly.

 The most notable reason for the failure of the company was the lack of the plan for crisis management. After the article by Wall Street, the company began scrambling. There was no strategy in place to salvage the social media critics and the impending downfall.  There was also no delegated spokesperson by the company to answer the allegations made against the company. The company failed to take responsibility for its shortcomings but rather defended its position. There was no data to defend the position of the company over the allegations made against it.

 

The Response of the Company

Elizabeth Holmes and Bulwani declined the several interview requests. Holmes, however, in a speech, stated she was willing to make things right and take the company to where it belonged. Initially, she indicated the willingness to take responsibility for her actions. After the exposition, she was caught in fear as she felt that it was impossible to mitigate the situation. She called for a series of advisors to give directions on the fate of the company. The company met with threats any of its employees who spoke with the journalists in exposing the filth.

Elizabeth Holmes: A Visionary or a Villain

            Many could have thought of Elizabeth Holmes as one of the most visionary people in the world, not until her downfall. She dropped school at 19 as she had the vision of making it big by offering a technological solution to the conventional methods for testing blood. As she pursued the right intention of doing away with the painful syringes that health workers used in the testing of the patients’ blood, she secretly performed several professional errors which endangered people’s lives. In the name of fame and legacy, she followed the wrong practices. In the end, the company went to zero. It is clear that Holmes cannot be considered a visionary but rather a villain as she did all manner of unlawful practices to achieve her dreams.     

                                                                  

Works Cited

Couzin-Frankel, J. (2018). The rise and fall of Theranos. Science, 360(6390), 720.

Fiala, C. (2018). The meteoric rise and dramatic fall of Theranos: lessons learned for the

diagnostic industry. Clinical Chemistry and Laboratory Medicine (CCLM), 56(9), 1443-1446.

Plebani, M. (2015). Evaluating and using innovative technologies: a lesson from Theranos?

            Clinical Chemistry and Laboratory Medicine (CCLM), 53(7).

Loannids, J. (2016). Stealth Research and Theranos. JAMA, 316(4), 389.           

Lackner, K. (2018). The Theranos saga and the consequences. Clinical Chemistry and

            Laboratory Medicine (CCLM), 56(9), 1395-1396.

Fiala C. (2018). Theranos: Almost Complete Absence of Laboratory Medicine Input. The

            Journal of Applied Laboratory Medicine, jalm.2018.027474.

Diamondis, E. (2015). Theranos phenomenon: promises and fallacies. Clinical Chemistry and

            Laboratory Medicine (CCLM), 53(7).

January 19, 2024
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