Theranos – Silicon Valley’s Greatest Disaster

Thera nose began as a startup of almost mythical proportions and goals in 2003. It is simply an incredible morality tale. A woman once hailed as a Silicon Valley visionary faces federal fraud charges tonight. Athena founder Elizabeth Holmes has now been officially indicted on federal wire fraud charges. The US Attorney's Office accused her of imagining building a company that everyone thought would change the world but which ended up being one of the biggest frauds in history. Thera knows that the company founded in 2003 by Stanford dropout Elizabeth Holmes was just that they cheated everyone who received more than six.

One hundred million dollars in funding in the process What Farah Naaz promised was a revolutionary blood analyzer that could perform hundreds of tests with just a finger prick in the comfort of his own home. However, this story is not one of great success or inspiration. about deception, fraud, manipulation and a CEO who would stop at nothing to achieve her goal. This is the story of the thoroughness of a company once worth nine billion dollars and the story of how it all collapsed in one of the worst

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s in the history of Silicon Valley. exactly what Thoreau knows and how it went so horribly wrong Elizabeth Holmes was born into a well-connected family with a rich history from an early age Elizabeth knew what she wanted in life: to be a billionaire at 18 she went running at Stanford tour China where she met a man 20 years her senior named sunny sunny, emigrated from Pakistan and had some success in the 1999.com boom, pocketing $40 million in the process.

He got what she wanted: money and the status of a successful businessman. She would later play an important role in Elizabeth's company during another trip to Asia Elizabeth witnessed the SARS outbreak from that moment she returned home determined to change the world upon returning home she did not leave her room for five days and slept for two hours and nights while working on a patent idea, the idea was to create a wearable patch that could continuously analyze the user's blood and deliver the correct dosage of medication in real time. Filtered determination. She dropped out of Stanford at age 19 and started her own company in the early days.

They were not glamorous. The new company's office was in a part of the city known for shootings. One day, while in her car, Elizabeth was shot with a bullet that barely missed her. Despite this, she received an initial investment of 1 million dollars from her former neighbor, who had made some money investing in hotmail from the beginning Elizabeth wrote about the reputation of her investors, however, when it came to investors who specialized in medicine, she had a hard time convincing them as the Lack of knowledge started to show which was no surprise because I had only spent a few semesters in college so for most tech entrepreneurs this kind of thing is not a big deal, for example Mark Zuckerberg just needed to master coding as a child and could have succeeded with little college knowledge, on the other hand, medicine and chemistry.

They are fields that require decades of knowledge and research to find a breakthrough, regardless of the fact that at the end of the year Elizabeth had almost 6 million dollars in funding and her idea had changed now that the blood test would be performed using a cartridge system and reader. was supposed to work, patients would prick their fingers storing blood in a small cartridge pushing this cartridge into a machine would run the tests the imagined equity machines would perform tests on the spot and transmit information over the Internet to a laboratory where staff would interpret the results. and submit a report Traditionally, the current industry procedure was to draw a syringe full of blood from a vein and physically send the sample to an old-fashioned laboratory, using large machines the size of several commercial photocopiers and the results would take a few days. to return from a doctor, Thera would try to explore the components of these enormous machines so that they fit in a box the size of a personal computer.

Thoroughness would make this process faster, more convenient, and would completely avoid the need for a doctor in this In a particular medical field, there are many components used to analyze blood, each of which performs a different type of test, for example, one test shoots a beam of light at the blood sample and measures the reflected light, while other tests require chemical reactions. Now this is the big liar and the problem of justice, there were several problems that made the thorough machine almost impossible: firstly, the components would interfere with each other when placed in close proximity due to a magnitude of problems including heat, light and electrical activity, in addition to having enough volume of Test samples with just a finger prick, the blood drops had to be diluted over diluted samples, gave inaccurate results, and were outside the hardware's detection capability, so that, in short, for technology to be possible, equity had to make great strides on all fronts. of blood tests, they had to do all this while only reporting to Elizabeth, who didn't really have the knowledge, skipping ahead to 2006, nurse 1.0 of the anastomosis era.

Elizabeth recruited engineers to design a new version called the Edison, however no equity machine would ever exist. accurate or capable of performing the full range of tests Elizabeth claimed Elizabeth began pressuring the engineering team manager to perform Edison development around 24/7 when the manager refused claiming that the engineers were overworked, as Elizabeth hired a parallel engineering team and pitted the two teams against each other in a race for survival of the fittest. This sort of thing was actually a tactic that Steve Jobs also used with the original Mac on the iPhone, but to be fair to him, the losing team would be fired.

Elizabeth also started doing some things. ethically questionable things, such as conducting a pilot test on cancer patients with the company Pfizer. She knew the product didn't work yet, but she insisted on doing real tests on people who had serious illnesses to highlight the seriousness of this. Blood tests are generally used to increase or decrease a patient's medication dose or diagnose conditions that may require immediate action Doctors your lab results today 70% of their decisions about whether the results are false could be fatal of course The only reason the cancer trials went ahead is that Elizabeth had been blatantly lying to investors and customers about how well the product really worked the same year the company's CFO discovered that Elizabeth had been lying, He told her to stop instead of accepting that she fired him on the spot.

After this, Elizabeth never hired another CFO again. Leaving the position vacant for a decade in 2007, there were no bigger stars than Silicon Valley and Steve Jobs. Elizabeth began to develop an obsession with jobs. One employee even found a newspaper clipping on a desk where someone called her the next Steve Jobs. The obsession bordered on. madness, for example, after finding out that Steve scheduled marketing meetings on Wednesdays, he would do the same with the same marketing company that Steve used, he would even recruit some Apple employees, one of them included one of Steve Jobs as his closest friends. former senior vice president of software at Apple AV2, Vania even came out of retirement to join the board of Fairness.

The Fairness board was made up of a star-studded panel. day Elizabeth once a restructuring occurred the shares in the company that would give her the majority of voting rights With the information he had received from employees about the problems during testing, he felt he had to do something, he spoke to Don Lucas, the president, but this resulted in AV resigning after feeling that his advice fell on deaf ears. Elizabeth had the board around her finger, she was a master manipulator, speaking in a low baritone voice so she could To be taken more seriously, the question was, when you were nineteen, how do you go about the process of convincing people do you know what you're doing?

It's about finding people who believe in you because the worst possible thing in the world is to have someone who doesn't believe in you supporting you because it's not going to result in a good situation, sometimes she forgot to put her voice on and was caught using a natural voice before realizing it and going down several tones, he does well if I use the traditional voice. It is difficult to describe in words what we are doing because people associate it with conventional processes for a supposed drug. Shortly after the company moved to a prime location in Silicon Valley, a new member of the sales team soon discovered that the financial projections were based on After pilot tests that were not honest, the issue was brought to the board, who organized an emergency meeting and decided to fire Elizabeth two hours after they brought her in to tell her the decision that had convinced them to reverse it.

This incredible power of persuasion is Another reason why justice went this far without real working technology. Shortly after the meeting, Elizabeth fired those who raised the alarm at this stage, employees leaving or being fired was common, in fact, all the employees who came from Apple would be gone in just a couple of years. This time, an old family friend, Richard Foolís, created a patent for a method of transmitting information from blood testing machines to doctors. He did it out of spite for not asking her for advice when Elizabeth started the company in her field of expertise.

He was a doctor. He sold his medical demonstration video company for $50 million in a few years. Richard will fairly go to court over the patent he made, which he privately called the thoroughness killer. Richards' patents would not bring justice, but his actions 2009 Sonny, the millionaire Pakistani immigrant, was now Elizabeth's boyfriend and had joined the company as second in command. Sunny had a background in software and had little knowledge of the inner workings of a medical company. She claimed to have written 10 million lines of code while at Microsoft. but the average Microsoft developer only writes a thousand lines a year.

She also boasted of being extremely wealthy and coming to work just because she wanted to. She also had a habit of latching on to buzzwords and using them despite having little knowledge of the subject that engineers would use. He used terms out of context to see if we would continue using them, he did, but Sonny knew how to control the people he feared within the company, constantly firing people and letting his temper flare. In 2010, he invested a lot of money in Silicon Valley. Facebook Twitter and Eber were taking off while Walgreens and Safeway had entered into talks with farah naaz to partner and create wellness centers.

These were sections in their stores where patients could get blood tests. Theron Oz presented Walgreens with one hundred and ninety-two different tests that could be performed with their Edison machine, however only about half of them were theoretically possible. The only proof that the technology worked was a review by John Hopkins School of Medicine. The document was only two pages long and summarized a meeting in which Therenear showed university representatives some data results. No actual tests were performed on the machines themselves, but thoroughness was important and Walgreens was afraid of missing something. and let their competitors get a partnership.

Elizabeth also made such an impression on Walgreens and Safeway executives that they trusted every word she said. Safeway and Walgreens combined gave Theranos $105 million in loan investments at the time. Elizabeth realized that Edison wasn't good enough, so she commissioned the mini lab to make the third version of the blood testing product, while Sunny bullied the employees and watched CCTV. She pictures them to see exactly how long people worked once she told an employee she would fix it after finding out she had only worked eight hours a day. Elizabeth backed the decision stating that two employees quote if anyone here thinks you are not working on the best thing humans have ever built or if you are cynical then you should leave the quote basically, anyone who agreed with Elizabeth was promoted and those who doubted were fired in2012.

Safeway was not doing well, they had invested $350 million in renovations as store space in all of their store locations in anticipation of the painstaking machines, only to be met with constant launch delays and excuses when equity began accepting samples from Safeway employees. They were tested on existing third party commercial machines in a lab, but Safeway lied to you and gave you the impression that all of these tests were being run on Edison equity machines, they weren't even running most of the tests on the equity devices and most of the tests were running on third party machines.

Did Holmes get lost? The moment that beautiful nose couldn't do all those tests, yes, meanwhile, justice is a demand Richard, the jealous family friend and doctor, was in full swing, he was serious about ending Justice, hired the same lawyer who worked in the case of Bill Gates' statement. and the cost of $1,000 now a fundamental point for justice is the fall came with the subpoena of Ian Gibbons, who had led the chemistry team since 2005, in May 2013, justice notified Ian that in just two days he would be involved in the Richards trial. He feared that anything he said would put the company in danger and expose liars.

Ian wasn't fair and had just been demoted, but he feared that leaving at 67 would make it impossible for him to get another job the next morning. his wife Rochelle found him in the bathroom overdosing on medication, he died a week later at Beckett Theranos hospital in a coldest heart of hearts Elizabeth did not return Rachelle's call about her husband's death Elizabeth informed only a small number of employees about Ian's death. In passing and I vaguely mentioned hosting a service that was never carried out, she seemed to have ignored Ian's death quite casually after spending two million dollars on the case Richard settled a massive blow to her pride, this would fuel the fire in Richard that would eventually bring down justice during this period Theranos was still carrying.

They ran tests on third-party machines and desperately tried to get results. This included stacking six mini labs on top of each other for high testing throughput. The extra heat generated actually further hampered the accuracy of the tests, but their nose didn't have time to work on their technology. They had already promised their machines to the world and had a $140 million contract with Walgreens that required them to release them in February. 2013 and was four months late the lies continued the financial forecasts that Sonny gave to investors were 10 times higher than the company's internal forecasts, these numbers were completely made up, as Theron operated without a CFO for the last few seven years since he was fired.

The enosis board, as always, was still packed with high-profile and reputable names, so no one doubted the company. this included former US Secretary of State Henry Kissinger, former US Office of Management and Budget director George Shultz, and future Secretary of Defense Jim Mad Dog. fundraising for his 2016 campaign the money continued to flow in fun of partners to put ninety-four million dollars in shares Rupert Murdoch contributed 125 million the Walmart brothers contributed 150 million the DeVos family contributed another one hundred million this gave to

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a valuation of nine billion dollars and Elizabeth was worth five billion dollars; The technology's shortcomings were well known within the company, but employees were usually too afraid to do anything for fear of retaliation from sunny Elizabeth or the company's lawyers.

Employees were forced to sign confidentiality agreements when they started and again when they started. left this stopped many people from taking action Tylar shorts concedes to another board member George Shultz was in a more privileged position, noticed the thoroughness problems and after falling on the deaf ears of Sonny and Elizabeth, resigned, tried to speak With his grandfather, George told him about Edison's inaccuracy and constant failures in quality control testing, he told him about how justice had convicted everyone by testing samples on existing third-party commercial machines, not justice on their own. Edison machines. Incredibly, Elizabeth had so charmed George Shultz that he would ignore everything his grandson Tyler told him in mid-2014.

Fortune magazine published a front-page article titled "This CEO Is Out For Blood, This Rockets Elizabeth Is A Celebrity And Since This point appears constantly in the media Forbes USA Today NPR Fox Business CNBC CNN". and CBS News took their turn covering the success story of the youngest billionaire who ever lived. Barack Obama named Elizabeth America's ambassador for global entrepreneurship, and she was added to the board of fellows at Harvard Medical School. Elizabeth enjoyed the fame she acquired. her security team 220 her office was redesigned to look like the president's Oval Office bulletproof glass full wood Elizabeth gave a TED talk about her idea to change the world said soon no one would have to say goodbye too soon and went on to tell it to hearing a heartfelt story about how her uncle had died of cancer but of course the TED talk was just an act, in reality she wasn't even close to her uncle and had simply exploited his death for her narrative as the cracks began to fall apart.

Empire Richard at this stage had created a gang of equity skeptics, including Ian's widow Rochelle, who gathered information and then took it to John Kerry, us at The Wall Street Journal, when John began researching countless sources and the Former employees came out of nowhere, provided information anonymously. about the story Thera no attacked everyone they talked to used their pile of money and threatened to sue everyone else spoke to the Wall Street Journal they even hired private investigators to stalk anyone they suspected several letters were sent to the Wall Street Journal to try to kill the story by threatening defamation lawsuits Rupert Murdoch, the owner of The Wall Street Journal and investor, Elizabeth painstakingly asked him to personally kill the story, he refused stating that he had confidence in the editors to handle the truth, whatever it was. the reaction.

The thoroughness was intense and the story had not yet come to light, the usual continued, to be fair, Elizabeth was making appearances at the White House frequently back then, but under the veneer, the machines were still only able to make a small amount of evidence and, when they were inaccurate, even that thoroughness would continue. To demonstrate to VIP guests of the minilab, they pricked their fingers, then waited until they left, and then used existing third-party commercial lab machines to return the results. Vice President Joe Biden even paid Theron and visited him as well. He was shown a fake lab that was set up.

Just for the visit, he was impressed by saying that the laboratory of the future existed and praised justice. The dark truth about justice was finally revealed in a Wall Street Journal article on October 15, 2015. It was a bombshell, every major news article picked it up. People began to question the thoroughness and secrecy. Elizabeth took it in stride, not shying away from questions, but blatantly lying to the public. It seemed like he thought everyone would just believe him again, but this time it was different now that people were asking serious questions and just This morning, The Wall Street Journal published a rather scathing article about the company's legend about whether patented testing devices of the company may be inaccurate and basically accusing thoroughness of deceptive practices Elizabeth Holmes, the founder and CEO of Thoreau, knows that they give her the opportunity to respond to the charges raised. in the article this house was welcomed to me for money its great to be here thank you what do you think is going on here?

This is what happens when you work to change things and first they think you're crazy, then they fight you and then suddenly you change the world and I have to say that I was personally surprised to see that the magazine would publish something like this right when the story, the FDA did a surprise inspection of her nose, further investigation found that the Fairness Edison blood testing machine only performed 12 of 250 tests and even those produced wildly erratic results now Thera nose was in full damage control Elizabeth snapped with Sonny and fired him. A criminal investigation and an investigation by the Securities and Exchange Commission were underway.

It was also proceeding, investors began to sue Theranos one by one. The partner fund sued for one hundred million. Walgreens for one hundred and forty million. Elizabeth had to close the trial and had to pay four point five million dollars to the state of Arizona, where most of the patients had received tests. thoroughness had overturned nearly a million lab results, ten patients would sue for medical assault, but surprisingly, through all of this, Elizabeth never apologized, apparently her mealy mistake along the way could be fixed so both Elizabeth and Sonny would know. what they were doing lying. investors, her clients, the regulator's patients and even her own board of directors, no one outside can be blamed for not realizing the fraud ahead of time, even the board made up of seasoned professionals was masterfully manipulated to give Elizabeth the ninety-nine point seven percent of the voting rights it seemed.

By all accounts, a sociopath willing to stop at nothing to make her company a success, not caring who or what stood in her way and who knows how far the lie might have gone, continued with all smiles and even after that the truth came to light, Elizabeth's actions could be a microcosm a case of a modern problem in society if the need to be successful or at least appear successful outweighs everything else possibly there is another flaw at play here a flaw in the human condition is the illusory effect where if you repeat a lie enough times people will start to believe it, especially if you have credible names around the product.

The SEC reached a settlement with Elizabeth Holmes in March 2018. She lost voting control, had to give up her share of stock, and was prohibited from being an officer and director of any public company for Ten Years. Sunny has not yet reached an agreement with the SEC. Both Sonny and Elizabeth have been hit with criminal charges in an ongoing lawsuit. At the time of this video, both pleaded not guilty and each faced 20 years in prison. Thera was not dissolved. in September 2018, so one question remains: if justice were to continue, would they have succeeded with their blood testing machinery?

Would they ever have worked well? It's actually a harder question to answer than one might think when they were running out of money, they ran tests on real patients. As a proof of concept to get more funding, which is of course what brought them down in the first place, but they say they got funding without testing on patients, the mini lab presented was only incrementally better than the Edison machine, despite that justice had hundreds of millions. of dollars at your disposal, so, that being said, it's pretty unlikely that any company would have been successful at this, so that concludes our look at equity, so I know you would have lost some of the faith and humanity that you had, but if you want to see some real advances and research in the medical field, things like real-life nanobots being successfully used in mouse trials against cancer or stem cells being injected directly into the brains of stroke victims, you allowing a recovery never seen before and even allowing a man in a wheelchair to walk again This is the kind of interesting stuff that gets lost in the sea of ​​media day to day, but you can find those videos here on ColdFusion.

Anyway, I'll leave a link in the description below, thanks for Watching this has been - go, go, you've been watching Cold Fusion and I'll see you again soon in the next video. The Shia boys had a great time.