'For too long, fledging companies promoting technological and scientific advances have relied too much on style and not enough on substance,' writes hholdenthorp in a new ScienceEditorial.
The rise and fall of Elizabeth Holmes, former chief executive officer of the high-flying, privately held, American medical diagnostics company Theranos, has riveted the public for years. A bestseller, a documentary, and a seemingly endless stream of news stories have chronicled the drama, which came to a climax last week when a jury decided that Holmes committed fraud.
Although a verdict has been rendered, it’s worth examining how the culture of science innovation contributed to the problem. For too long, fledging companies promoting technological and scientific advances have relied too much on style and not enough on substance. An exciting and robust technology is generally only part of the picture in creating a successful life science business. Investors—especially venture capitalists in Silicon Valley—are also looking for a compelling CEO who can dazzle other investors and eventually Wall Street. It’s often said that to succeed, a venture-backed company needs a CEO who is a “force of nature”—someone who can raise money for a promised new technology even when the supporting data are not great. This person should be someone who the investors believe will “get there or die trying” and who has the ability to “fake it till you make it” to keep the company going through the inevitable setbacks along the way. None of these traits have anything to do with developing a robust technology that saves lives. Pushed too far, the exaggerations become fraud, and the Holmes case shows that can be a crime. As venture-backed companies grow, investors usually insist on “milestones” that show the steady improvement of the technology. The temptation to misrepresent the progress increases with each step. If the technology is not actually advancing, then the executives in the company are committing greater and greater acts of fraud. There is also a burden on the investors to carry out due diligence on the claims, but they only have financial and not criminal liability. When attention is too focused on charisma and a certain amount of fakery is considered acceptable, reality can be overcome by hype. That is what happened with Theranos. Holmes was more obsessed with her personal impression and less so about whether the company delivered on its promise to provide small, automated devices that required very small amounts of blood to perform numerous diagnostic tests. Her boyfriend and business associate Ramesh “Sunny” Balwani—who awaits his own trial—presumably provided instructions on her personal style and conduct, but nothing about how to make the technology work. Maybe reading some scientific papers about diagnostic technologies would have been a good thing. Instead, investors happily followed the 19-year-old Stanford dropout down an entrepreneurial path paved with dishonesty, not reality. With information technology companies, the stakes are not so high. If tech CEOs overhype their shiny new idea, venture capitalists will merely lose money that they knew full well was at substantial risk. But fakery involving new medical tests can lead to life-threatening harm. Interestingly, the jury found Holmes guilty of defrauding investors, but not defrauding patients. The latter verdict may have been influenced by the fact that physicians who used the Theranos blood tests followed up with other lab tests, thereby limiting the potential damage to people’s lives. The implications of this for the commercialization of science are enormous. Being optimistic that the science might work is one thing, saying it works when it doesn’t is another. In Theranos’s case the distinction was clear-cut, but the efficacy of many other technologies—particularly in the life sciences—is not as easily deduced. If it works in cells, will it work in animals? If it works in animals, will it work in humans? Can you produce it at scale? “Get there or die trying” sounds snazzy, but the Theranos case is a reminder that more than money can be at stake. What happened to Holmes should be a warning for future start-ups. Instead of forces of nature, how about companies led by highly accomplished scientists who give dull and boring PowerPoint presentations full of outstanding data?
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Attack on Titan Star Hypes Eren's Big Moments in Season 4BThe voice behind AttackOnTitan's Eren is hyping up what's coming for the character in the rest of the final season:
Read more »
Opinion | Time for AG Garland to Create Corporate Crime DatabaseTo properly face the major threats posed by corporate crime, it is important that the Department have more specific and timely ways to measure the incidence and severity of corporate crime.
Read more »
Chick-fil-A's plans for New Jersey restaurant at rest stop face pushbackChick-Fil-A's plans for a restaurant at a rest stop on New Jersey's Garden State Parkway is facing some political pushback.
Read more »
Buzzy Beauty Ingredient of the Moment: Cica'The science shows that the hype is warranted.'
Read more »
Storm Reid's Next Role Has Her Bringing a Video Game Character to LifeAnd she's 'beyond excited' to get to work.
Read more »
Under the skin: new battery tech is self-healing and fast-charging | AutocarStoredot’s new extreme fast-charging technology can be applied to existing lithium ion battery technology
Read more »