A fallout from the early period (they are projecting a 13-week trial) of the Theranos court case – subsequently the case against Elizabeth Holmes and her COO/boyfriend, Ramesh “Sunny” Balwani, is that it is making the “Silicon Valley” community nervous.
The tech industry is doing all it can to distance itself from the proceedings, though both Theranos and many Silicon Valley startups share a troubling, business philosophy of “Fake It Until You Make It.”
It’s Not the Machine
Whether you are of the mindset that Elizabeth Holmes was controlled by Balwani and was responsible for none of her failures, or that she remains an egotistical, unethical, serial liar, one thing is clear: the technology did not work, it never worked and the company was literally playing with people’s lives.
According to Rebecca Heilweil (September 10, 2021), a business writer for Vox.com:
“Holmes’s lawyers insist that the 37-year-old Stanford dropout truly believed in her company but made ‘mistakes’ in her otherwise noble mission to make faster, cheaper blood-testing.”
The defense will have a long road to walk to convince jurors that the “black box” touted as being capable of running 250 blood tests from a drop of blood was simply a mistake. As Assistant US Attorney Robert Leach stated: “It’s a crime on Main Street, and it’s a crime in Silicon Valley.”
Silicon Valley is distancing itself from the faulty technology by stating a few facts as proof, for example, the Theranos concept was not backed by hi-tech venture capital. That is a bit of a stretch. The lending climate for biotech is now estimated at $27 billion, much of it brought about by the huge payouts that COVID cures promise.
Lawton Burns, business professor at Wharton recently stated: “There is so much money in VC land, and they gotta park it somewhere. And some of the traditional places where they’ve parked it — in, like, Big Tech — those things have gotten saturated, so they had to look for some other place to park it.”
If Theranos had been around now, I have no doubt it would receive VC funding. Then there’s the argument advanced about how most healthcare companies over a certain valuation aren’t publishing much peer reviewed research.
Rebecca Heilweil cites a study published in the European Journal of Clinical Investigation the contention of many experts is that with due-diligence companies such as Theranos could be weeded out.
And it is true, Theranos convinced Walgreen’s to invest $140 million in their scam. But to suggest that there are so many loopholes in Biotech and the FDA that little black boxes and scams run rampant in science is irresponsible. Say what you want about American healthcare, we are still the gold standard
What was irresponsible is that Theranos, with laser-like precision hand-picked their “marks,” no more or less than how some unscrupulous financial advisers went after naïve athletes and celebrities. Said Bryan Roberts a venture capital expert in healthcare:
“It was wealthy individuals, families, people who don’t spend basically every waking hour thinking about business models and problems and breakthroughs in health care.”
The board was stocked with “names” and clowns but not surprisingly, the board was absent of research scientists and healthcare professionals.
Let’s Be Honest
Elizabeth Holmes, whether found to be innocent or guilty, was a child of the Silicon Valley culture. Her idols were Silicon Valley entrepreneurs and she saw much of them in herself. She operated in a world that owes little explanation to anyone, and little justification for her activities. She followed their model, right down to the Steve Jobs black T-shirt costume.
Silicon Valley will attempt to impress us with the obfuscation of so many biotech companies applying for emergency use authorizations during this period. However, the tests are often variations of diagnostic tests, not major treatments or pharmaceuticals. The FDA has done a pretty good job of regulating the biotech and pharmaceutical industries.
As the Theranos trial continues, like it or not, Silicon Valley will be forced to look at their own failures and practices. It’s all about the ethics. Is Hi-tech willing to say it is without ethical “sin?”
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