Attheageofjust 19, ElizabethHolmesdroppedoutofStanfordUniversitytostartherownbusiness. ItwasoriginallycalledRealTimeCures, butElizabethchangedthenameafterworryingpeoplewouldbescepticalofthewordcures, andshecertainlydidn't wanttoattractanysuspicion. SosheinsteadrenameditTheranos, a combinationofthewordstherapyanddiagnosis. Elizabethhad a phobiaofneedles, andhad a visionwhereyoucouldsimplyprickyourfingerandwith a singledropofbloodtestforhundredsofdifferentdiseases. Since
Elizabethcamefrom a well-connectedfamily, shewasabletoraisesomeinitialmoneytogetthecompanyupandrunningtopursuethisidea. Shewasalso a verypersuasivesaleswoman, andinvestorsweredrawninbyhervisionandconfidence.
Thelabmanagerthoughtthiswas a badidea, astheywerealreadysooverworked. SoElizabethhired a secondteamandpittedthemagainsteachother. Theteamthatmadetheleastprogresswouldbefired.
By 2006, theengineershadcreated a prototypemachinecalledtheEdison. Here's howitworked. Youput a dropofbloodon a smallcartridgeandslideitintothemachine, whichrunsthetest. Thedataisthenwirelesslytransmittedviatheinternetto a lab, whereit's analysedandthen a reportissentback. Basically, themachinewouldmakebloodtestsmuchfaster, cheaper, easier, andallfrom a portabledeviceyoucoulduseinthecomfortofyourownhome. Atleast, that's whatthemachineclaimedtodo. Butitveryrarelyworked, andhadanextremelyhigherrorrate. Itwascleartoeveryoneworkingonthemachinethatitneeded a lotmoreworkbeforeitwasready.
Andtomakethingsevenworse, ElizabethneverhiredanotherCFOtoreplacehim, meaningtherewasnobodytoquestiontheabsurdrevenuepredictionsshewasgivingtoinvestors. Soshecouldeasilymakeupwhatevernumbersshewanted. Anditworked, Theranosraisedyetmoremillionsofdollarsinfunding. However, thechieffinancialofficerwasjustoneofmanyin a longlineofemployeestogetfiredfromthecompany.
Forexample, whenElizabethdecidedtostartdoing a trialoftheEdisonmachineon a groupofterminalcancerpatients, severalemployeescametohertotellhersheshouldn't bedoingthissincethemachinewasconstantlybreakingandgivingwildlyinaccurateresults.
Now, theideawiththisdealwithWalgreensandSafewaywasthey'd setupTheranosboothsintheirstorewherepeoplecouldget a bloodtestdonewithjust a prickoftheirfinger, andessentiallychoosefrom a menuofwhichthingstheywantedtotestfor. However, thishadmeanttobeginin 2011, butbecausethemachinesdidn't workproperlyyet, Elizabethkepttryingtostallfortime. Therewasexcuseafterexcusetodelaythelaunchdate, oftenforcompletelybizarrereasons, likesheoncesaidtheywerebehindschedulebecauseofanearthquakeinJapan, eventhoughthathadnoimpactontheirbusiness.
Thiswas a turningpoint. Upuntilnow, Elizabethhaddeceivedinvestors, butnowbylettingthegeneralpublicusethesefaultyTheranosmachines, shewasliterallyputtinglivesatrisk. Ifsomeonegot a bloodtestdoneon a Theranosmachineanditgavethewrongresults, itcouldbefatal. Theycaneitherbediagnosedwithsomethingtheydon't have, orthinktheirresultsarefine, butreally, theyhave a seriousissue.
Butnotjustthat, oneofthebiggestsellingpointsofTheranoswasmeanttobethatyouonlyneeded a smalldropofbloodfrom a fingerprick. Butwhenpeopleactuallyarrivedtogettheirbloodtested, theyoftenhadtheirbloodtakenwith a syringethetraditionalway. Andwhereastheresultsweresupposedtobereadyinjust a fewhours, insteadtheresultsoftentookweeks. Basically, thewholethingwasadvertisedassomerevolutionaryexperience, yetitseemedjustlike a normalbloodtest. Andthereasonforthatisitwasjust a normalbloodtest.