By now, you probably know the story of Theranos, the medical start-up that promised a revolutionary new blood-testing technique built on a foundation of distortions and misrepresentations. Theranos is a shining example of Silicon Valley’s attitude that hindsight is 20/20, and that problems only appear in retrospect.
To that end, Vanity Fair’s exhaustive chronicle of the downfall of Theranos and its founder, college dropout Elizabeth Holmes, provides many memorable anecdotes on how to build a billion-dollar company on big promises and obfuscation. But one of the most darkly funny moments comes early on, when the article describes how investors vetted Holmes’s sales pitch.
When Google Ventures, which focuses more than 40 percent of its investments on medical technology, tried to perform due diligence on Theranos to weigh an investment, Theranos never responded. Eventually, Google Ventures sent a venture capitalist to a Theranos Walgreens Wellness Center to take the revolutionary pinprick blood test. As the V.C. sat in a chair and had several large vials of blood drawn from his arm, far more than a pinprick, it became apparent that something was amiss with Theranos’s promise.
This is an amazing detail. Theranos promised that its technology could test for hundreds of ailments with just a finger-prick amount of blood. Instead, a venture capitalist went to Walgreens and ended up literally surrendering far more blood than intended. From a certain viewpoint, one might say that Theranos tricked someone out of their blood. It is an incredible scenario: an investor having their bodily fluids pumped and simultaneously coming to the realization that maybe that’s not what’s supposed to be happening.
Imagine expecting to pay $1 for something, and then the store charges you $100. Theranos did that, but with someone’s blood. Silicon Valley is wild.
