HOW NOT NEEDED DO BUSINESS
In 2015, Theranos startup was considered one of the most successful in the world. His estimated value reached $ 9 billion, and the fortune of his 22-year-old founder Elizabeth Holmes was estimated at $ 4.5 billion.
However, the project soon burst like a soap bubble. Millions of investments by investors evaporated, the company’s shares depreciated, and Holmes was accused of fraud.
Theranos rapid blood test system has been nicknamed the big scam of our time.
Why this happened, knows American journalist John Kerreiro. He conducted more than 150 interviews with former startup employees and wrote the book “Bad Blood. Secrets and lies of Silicon Valley startup.
We chose the bad advice about doing business from the book.
#1. Do what you don’t understand
Elizabeth Holmes enrolled at Stanford University’s Department of Chemical Technology, but dropped out after two semesters. The family said that she was not interested in scientific work: she just wanted to make money.
And she took up this, founding the startup Theranos.
For a year of study, it is impossible to make a breakthrough in laboratory science. Moreover, to get enough knowledge and open a medical startup.
Mark Zuckerberg, of course, learned to write code on his father’s computer at age 10, but this is not a story about medicine.
According to John Kerreiro, the absence of specialized knowledge from Elizabeth betrayed her performances. For specialists, they sounded like babble of a schoolboy who had not learned a lesson.
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For example, Elizabeth described the principle of the operation of her blood testing apparatus as follows: “Chemistry occurs and a chemical reaction forms.
It generates a signal from the chemical interaction of the reagents with a blood sample, which turns into a quantitative indicator.
They are examined by certified laboratory personnel and produce the result. ” This is too general an explanation, which showed that Holmes is poorly versed in the issue and does not understand the technical side of the project.
True, no one paid attention to this for a long time.
# 2 Promise too much
Elizabeth faced a problem that she herself had created. She told retailers that with her technology, Theranos can do hundreds of different tests using just a couple of drops of blood.
But the system was able to carry out only one type of analysis – immunochemical. This is not enough for the hundreds of tests that Holmes announced. Using immunochemical analysis, only a few tests can be performed.
# 3 Lie and push on employees
Theranos founder for years hid the failure of her startup from investors, partners and employees.
In an interview, she convinced the press of the revolutionary nature of the project, and showed investors fake research results.
Employees who guessed they were cheating never again crossed the threshold of a medical startup’s office.
This happened to Henry Moseley. He accidentally found out that with the help of a device developed by Theranos, it was impossible to achieve accurate results. After that Elizabeth announced this, for which he was called a “non-team player” and dismissed.
The pressure on employees did not end there. They constantly received letters reminding them of the need to maintain confidentiality.
And after updating the security system, startups started to feel like they were in prison.
For example, it was forbidden to insert flash drives into office computers. One of the employees was even fired for this.
#4. Hire inexperienced relatives
In the spring of 2011, Elizabeth took on the position of Deputy Director for Development of her younger brother – Christian. He was not an expert in this field.
Two years before the appointment, he graduated from the university and had no experience at all in working in a biotechnological company. But Elizabeth trusted him.
Christian Holmes was only interested in sports and girls. Instead of work, he read sports news sites. And in order not to “burn”, he inserted the texts of articles into emails without an addressee.
So from the outside it seemed that he was busy studying working correspondence.
Over time, Christian hired five university friends. None of them also had specialized education or experience, but thanks to their friendship with Christian, the young men took higher positions than other employees.
#5. Fall through the deadlines and get out
In 2012, Elizabeth Holmes signed an agreement with the largest pharmacy chain in the United States – Walgreens. Theranos was supposed to start providing blood testing services in pharmacies.