Humble pie part 2. Elizabeth Holmes charged by the SEC for fraud. So apparently, the deception was deliberate – saying they had $100M in revenue, when they had $100K. Claiming that their blood testers were working, when in reality they were testing them in traditional, competitor devices. Basically, lies. Sad.
Written 07/08/2016
Major humble pie required. So I wrote this post 2 years ago about Theranos and Elizabeth Holmes. Her company is kind of in shambles and she is personally prohibited from running a lab for 2 years here. So that is a fail. However, I argue she will come back stronger and meaner. Don’t count her out. America loves a come-back story, and she is still a powerhouse of intellect, ambition, and connections.
That said – if you want to cast stones about my 2 blog post from 2 years ago, no worries. As a consultant it’s important to 1) have a point of view 2) be open to feedback 3) be thick-skinned 4) look for lessons learned 5) have fun.
Written 09/30/2014
If you don’t know this company, clearly you are not paying attention. Theranos is a biotechnology start up merging biological systems with information systems. Home healthcare monitoring systems to monitor disease progression in real-time. Originally, it was catering to pharmaceutical trials and speeding up the response time, A/B testing of new drugs. Now, it enables you to use just 1 small pin prick of blood to give you advanced test results in 4 hours, with 1/2 the costs of traditional tests.
Elizabeth Holmes was on the cover of Forbes. Here are the highlights:
- Dropped out of Stanford at 19
- Revolutionized the blood test industry
- 27 patents on a disruptive innovation
- 50% ownership of a business that is valued at $9 billion
- One of the youngest billionaires in the world
What more do you need to know? Well look at these Stanford videocasts:
Team:
- Pick investors who share a long-term vision
- Find people who can stand by you to build a business
- The people you choose to work will absolutely determine the the failure and success of your business
- Evaluating candidates is difficult; technically you need to be excellent, but that is only 50%. If you don’t have the hunger to take ownership . . .it will not work
- If everyone in the company who owns what they are working on, then we will be able to solve any problem we face. Look for people who are hungry
- Find people you can trust
- Most fundamental part of business – building a growing business that has cashflow; the market is telling you that you have something of value
- Understand WHY you are doing the business; what is the source of passion?
- Have the conviction to make it work . . not the title, money, or glory. If you do it for superficial reasons, you may end up in the wrong place
- Lived in the basement of some Stanford graduates
- How do you convince people that you can pull it off, when you are 19 years old?
- Michael Dell, Bill Gates, they demonstrated that it is not about age
- It is about dedication and entrepreneurship … to make it work
- You have to find people who will back you, who believe in you
- You have to have the conviction because in the end, it is up to you
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I would like to get in contact with Elizabeth Holmes
Hello, I do not know her personally, so difficult to help you there.
I actually disagree with you on points 2, 3, and 4 (open to feedback, thick skin, and learn lessons). They are very important to doing any analytical work. But I don’t find traditional strategy consultants (McKinsey, etc.) to be very strong on them. Other fields are much better (e.g. engineering). We still have not completely digested the story of Enron for instance (and I was at McK when it was flying high). Huge lack of intellectual curiosity and way too much buzzword saying and image pushing.
Oh…and did you read the latest about Holmes? Less image, less turtlenecks, less BS. More real thinking, analysis and questions please!
Yes, she is being charged with fraud by the SEC. Serious, serious.
Agree that consultants need to BE more rigorous, BE more open to feedback, and BE less full of BS. That’s not always the case, and people do all kinds of wrong things for the wrong incentives.
Yes, Enron was a huge McKinsey house. Agreed.
Look forward to reading (perhaps 5-10 years from now) how Elizabeth Holmes went from superstar to supernova in such a short time. I wonder if it was greed.