Theranos: Incapable Technology

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Table of Contents

Introduction
Theranos’ Incapable Machines
Poor Elizabeth Holmes (CEO) and Sunny Balwani (COO) ‘s Management
Conclusion
Reflection
References

Introduction

Theranos was supposed to be one of the most significant medical discoveries in the United States but failed terribly after being associated with fraudulent practices. Elizabeth Holmes sought to change the blood test process by increasing speed and efficiency. The CEO promised to use a cartridge-based medical machine to run blood tests and immediately send the results to the lab for interpretation. However, the technology could neither work as expected nor revolutionize the blood test process. Holmes and Sunny Balwani, through threats, intimidation, and master manipulation, managed to receive billions of dollars in funding for the project and kept it going for years. In 2018, Theranos was investigated and shut down for medical fraud practices and multiple laboratory inaccuracies. One part of the essay covers two significant causes of the firm’s failure alongside their supporting points and arguments. The other parts of the paper conclude and reflect the writing process. Theranos Company failed due to the use of incapable technology and poor management which resulted to inaccurate blood tests and fraud charges.

Theranos’ Incapable Machines

The Innovative Technology

Holmes promised to revolutionize blood testing by speeding up the process and ensuring more efficiency. The innovation would cut down the hours of laboratory testing, patient pain in blood extraction, and the cost of blood tests (ColdFusion, 2019). Traditionally, blood tests involve drawing a syringe full of blood from the vein and sending it to the laboratory, which takes several days to test. Collecting vast amounts of blood is painful for patients, especially those with chronic diseases or conditions (ColdFusion, 2019). Blood tests are also expensive because of the time and resources incorporated to attain accurate and conclusive results in the laboratory. Theranos technology promised a softer and faster process to transform blood testing for Americans and the rest of the world. However, biotechnology would only be viable if it could perform blood tests as expected.

Capabilities of the Technology

Holmes indicated a blood testing machine (Theranos) that could ease the testing process. The technology would be a cartridge-reader system that would use a few drops of blood to detect marks of different diseases (ColdFusion, 2019). A patient would place a finger toward a cartridge to collect a few drops of blood. The cartridge would then be placed in a cartridge-holding machine for blood processing (ColdFusion, 2019). The device was said to be the size of a personal computer with multiple sections to perform different processes needed for blood testing. The testing process was expected to be immediate, and the results were sent to the lab for analysis. Unfortunately, Theranos had several problems, which made its functionality impossible.

The Reality of Practice

Multiple functionality problems made it difficult for the innovative technology to operate as anticipated. One of the problems is that components of the machine would interfere with each other following factors such as light, heat, and electro-reactivity (Couzin-Frankel, 2018). These interferences made it difficult for the device to operate effectively. Another issue is that the available drops needed diluted to have enough blood for tests. According to ColdFusion (2019), diluted blood gave inaccurate results; hence more blood is always required for such tests. The testing processes were to be approved by Holmes, who lacked the needed knowledge about the technology. The engineers hired to design Edison in 2006 proved that the technology could not perform its assigned functions (ColdFusion, 2019). Furthermore, there would be no Theranos machines capable of delivering what Holmes had promised in the future. Holmes, alongside the company president Sunny Balwani pushed the engineers to make the technology a reality, a move that would later stain their managerial skills.

Poor Elizabeth Holmes (CEO) and Sunny Balwani (COO) ‘s Management

Over-ambitious Leaders

Holmes and Sunny were determined to make the tremendous medical discovery a reality. The duo worked tirelessly to deliver the medical changes and make Holme’s dream come true. Holmes had little to no knowledge about Theranos, yet she dropped out of the University to develop it. In 2009, Sunny joined the company and had no biotechnological knowledge (Couzin-Frankel, 2018). Within no time, employees realized that Sunny did not understand the technologies and processes in the laboratory. While he operated as the firm president, Sunny revealed his fiery temper, making him an “enforcer” in the business (ColdFusion, 2019). Holmes and Sunny worked together to push Theranos engineers to make it work. For example, Holmes hired a parallel team of engineers to develop Edison, where the losing team would be fired (ColdFusion, 2019). This move was an example of Steve Jobs’s ambitious tricks he plays with his teams. Holmes and Sunny emulated many of Job’s strategies as they intended to be like him.

The top executives lacked originality and copied the business strategies of Steve Jobs. Holmes and Sunny’s ambition to become the next Steve Jobs blinded the realities of their start-up project. Holmes would decorate her office with Job’s favorite furniture, hire his former employees, and assume some of his behaviors. For example, like Steve, she wore black turtlenecks and never vacations (CNBC, 2018). Holmes would demand her employees be as productive as herself. She would ask Sunny to monitor employees’ arrival times and working hours (CNBC, 2018). Furthermore, Holmes fixed dinner time to 8 pm to ensure employees work longer hours (Couzin-Frankel, 2018). Although these are excellent job traits, Holmes misused them by failing to listen to employees. The executive management also promoted questionable practices that led to the project’s failure.

Promoting Unethical Practices

Holmes and Sunny practiced unethical behaviors through sexual relationships and procedural dishonesty. Holmes was in a romantic relationship with the company’s president but kept it a secret from employees and investors (CNBC, 2018). Their relationship negatively affected business decisions because Sunny mostly agreed to Holmes’s demands without question. For example, Sunny knew that Holmes lacked the biotechnology knowledge to develop Theranos yet kept quiet about it. The duo also continually lied to the investors about the capabilities of the technology (ColdFusion, 2019). Even after the engineers proved that Theranos could not perform the blood tests as promised, Holmes and Sunny assured the investors that it would deliver. These top executives ran blood tests from outside the company and lied to have them performed by Edison machine. Indeed, out of the 200 blood samples tested, only 12 were done using Edison and were flawed and unreliable (Couzin-Frankel, 2018). Holmes tried tests for different diseases and gave inconsistent results, diagnoses, and treatments that would worsen patients’ health. Holmes and Sunny would succeed in such practices by manipulating investors and employees.

Manipulations, Threats, and Intimidations

Theranos operated for over a decade by manipulating investors and intimidating employees without being caught. Although she dropped out of school, Holmes convinced Stanford’s professor Channing Robertson to be her mentor, thus proving her reliable (ColdFusion, 2019). The professor was later made a Theranos board member and paid a lavish salary. In 2004, Channing vouched for Holmes and got $ 6 million in funding from different capitalists (ColdFusion, 2019). Holmes entered into a partnership with Walgreens promising to deliver drug tests in their more than 40 shops (Couzin-Frankel, 2018). Being in business with such a large business helped the CEO to win other investors’ hearts and invest in Theranos. To make it more believable, Holmes lied that the blood tests were being used by military medivac helicopters. Holmes and Sunny constantly lied about the success of Theranos technology to earn investors’ funding.

When Theranos’s success went public, Holmes quickly gained several contracts with large investors. Following the pretentious success of Threnos, the company secured different partnerships. For example, the Walton family of Walmart invested $150 million, Safeway $350 million, Rupert Murdoch $120 million, and Betsy DeVos $100 million, among many others (Couzin-Frankel, 2018). Although Theranos rose to a net worth of $9.9 billion before its fall, these investors lost all their money when it collapsed. In 2017, Wall Street Journal investigator started investigating Theranos technology and testing (Couzin-Frankel, 2018). It is from this point that law enforcement agents began investigating the company. In 2018, Holme and Sunny were charged with financial and medical fraud and conspiracy (Couzin-Frankel, 2018). Before then, Holmes and Sunny succeeded in this fraud for years because they threatened and intimidated employees.

The duo managed to conduct the fraud by silencing their employees. Holmes would threaten and fire anyone who questioned her decisions or the functionality of Theranos. For example, when the company’s CFO asked Holmes about lying to investors, he was immediately fired, and his position was never refilled until the company collapsed (ColdFusion, 2019). Holmes would critically protect the company’s secret to the point she sued three employees under claims of misused trade secrets. Employees and visitors were forced to sign a non-disclosure agreement forbidding them from revealing any Theranos-related information. Theranos management, under the leadership of Holmes and Sunny, was at fault for the project’s failure.

Management’s Fault

Theranos management caused the failure of the biotechnology project through ignorance and greed. Holmes and Sunny ignored the need to research for the project. Successful biological discoveries or innovations entail multiple years of study and investigation. None of such experiments were done before the development of Theranos. Holmes and Sunny also needed adequate knowledge about the medical processes but did not. When the top management realized Theranos was ineffective for the tests, they failed to inform the investors and the general public (ColdFusion, 2019). Led by greed and ambition to be amongst the industry giants, Holmes and her close allies mislead the investors about Theranos. Therefore, even though Theranos technology could not have worked as anticipated, the top executive was responsible for the company’s collapse.

Conclusion

Theranos failed due to the application of incapable technology and poor management. The most anticipated biotechnology could not deliver a blood test revolution. Theranos experienced the problem of component interference and a smaller amount of blood, making it impossible to provide accurate and reliable results. The top management kept a positive image of the project, thus attracting more investors. The project succeeded for over a decade because of continued manipulation and intimidation. Inaccurate results and doubts from employees led to the Theranos investigation. The federal investigation revealed financial and medical fraud led by Holmes. Theranos, even in the absence of a fraudulent scandal, would not have worked because it was not well-researched or planned. Although the bioproduct could not operate effectively, the management was at fault for the project’s failure.

Reflection

The essay begins with an introduction paragraph that briefly highlights the subject matter. This section details Holmes’ intentions, delivery, and failure. There is also a highlight of the essay analysis and plan. In other words, the introduction answers the question of how and why the Theranos project collapsed. The essay also entails a thorough exploration of at least two main points. The two main points show the contribution of product and management to the project’s failure. The points are branched into multiple arguments, each taking at least a paragraph. The arrangement of various ideas is supported by adequate evidence and examples from the case.

Each paragraph contains a topic sentence, evidence and examples, and a linkage sentence at the end. The evidence and examples provide more information or explanation of the topic sentence. The essay’s body part begins by showing how the product caused failure for the company. The main point is that supported by three different yet interlinked points. The analysis of these points outlines important while ignoring irrelevant details. The essay applies borrowed information from outside sources as proof of evidence. The sources also provide specific examples widely known to the concerned public. The report uses more than one source, such as YouTube videos and reviewed journals. The arguments are detailed in a well-balanced manner to ensure the flow of information. Interlinkage of paragraphs and using formal English also smoothen the flow of ideas.

The last sentence of each paragraph highlights the next idea for analysis. The topic sentence is then formulated to continue the previous paragraph discussion even when analyzing a different opinion. Proper use of English entails correctly using words, phrases, and punctuations to indicate the formality of the essay. Using formal language entails avoiding slang and non-scholarly tones. The choice of borrowed information, especially from YouTube videos, also requires formalizing the language. While YouTube sources may have informal use of English, other source uses formal. Therefore, applying proper English throughout the essay was not difficult. The last parts of the paper are the conclusion and reference list.

The conclusion sums up the major arguments from the essay and provides implications. The paragraph entails brief highlights of two major points and their various viewpoints. There are also sentences showing who and why the project failed. These sentences answer whether the product or management was at fault for the failed project. Lastly, the essay is formatted in the APA referencing style. The style entails a title page, paragraphs, page numbers, and a reference list. All the paragraphs’ first line is indented, and each page is numbered. Strictly following APA referencing style, the essay also has in-text citations for additional evidence and examples. The page after the title page contains an outline that shows the content table of the essay. Furthermore, the title page includes the title and personal details of the author. The reference page lists all the used sources alphabetically. The paper is generally formatted into Times New Roman 12 and is double-spaced.

References

CNBC. (2018). The rise and fall of Theranos [Video]. YouTube. Web.

ColdFusion. (2019). Theranos – Silicon Valley’s greatest disaster [Video]. YouTube. Web.

Couzin-Frankel, J. (2018). The rise and fall of Theranos. Science, 360(6390), 720-729. Web.

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