Why were they even doing labs already anyway? If they can actually make the technology work, they can relatively easily print money. Focus on that.

They had a combination of non-working technology, and semi-working labs. They were using the labs partly to hide that their tech didn't work, and to tide them over until they could make it work.

They had to run their own labs in order to take advantage of the laboratory developed test (LDT) regulatory framework. Selling their devices for others to use would have required FDA clearance.

http://www.fda.gov/MedicalDevices/ProductsandMedicalProcedur...

They could go to Europe or elsewhere like many do.

The EU strategy can solve regulatory problems seen in the US, but it introduces other problems to be solved: funding can become more difficult (although the normal rules wouldn't seem to apply to this group), import/export and taxes become complicated, management from a distance is hard, etc. Keeping in mind that Theranos was trying for a US government contract, their US focus makes sense and the LDT pathway was a good idea. It's a shame that their corporate culture and management were wholly inadequate.

Sometimes you guys are after blood, what do you want them to say?

"We're the worst, we'll never try at anything anymore, sorry for existing."

Would that make you happy?

From an ethical standpoint, I think they should've just wound down the company. If there are parts of the business that still have value, sell them. Otherwise, give employees decent severance and try to help them find new jobs. Return any remaining money to investors.

Nah, it would have been this:

"Our foray into nanotainer tech was too early for the market. However, we've established that there is a market for disruptive tech in the stodgy lab biz. In terms of leadership, we're moving on from Ms. Holmes who saw this from the start, and she's agreed that the best for the stakeholders is to step aside due to the misunderstanding around her tech, but the company itself will persevere in breaking the stranglehold Big Lab has on healthcare costs, while Ms Holmes moves to an role in charge of disruptive R&D use of nanotainer and other disruptive tech in the lab/testing biz."

Damn that's full buzzword compliant.

You should work for Monsanto (a sustainable agriculture company) :-)

You mean Bayer, a "we pretty much just make asprin, don't worry about it" company.

This reminds me once again to re-watch "Thank You For Smoking".

Eh, no, but actually owning the wrongdoing would be a start.

Theranos fradulently conducted their business on a wide scale over a long period. Literally nothing they've said in public since the revelations (which just keep getting worse) have ever truthfully addressed the matter.

But regardless of the scale of wrongdoing, the bare minimum expected of both companies and individuals when they've done wrong is:

- An acknowledgment and admission of the wrongdoing, without equivocation or deflection. No "it was wrong but..." or any such thing. Own the wrongdoing, it's the least you can do to respect the people who you've done wrong by.

- Demonstration of self-awareness and introspection as to what led to the wrongdoing. Again, without equivocation or deflection. Neither corporation nor individual can be trusted not to commit the same wrong if they can't openly demonstrate why they did it.

- A plan to both prevent reoccurrence of the wrongdoing and, if applicable, a plan to make whole those who were harmed in the original wrongdoing. This doesn't need to be monetary, but may be (especially when businesses are involved).

These are the bare minimum prerequisites before anyone can be granted even the tiniest shred of credibility back.

This statement (like all other statements by Theranos) demonstrates literally no component of the above, so yeah, we'll keep (rightfully) raking them over the coals until they do.

"We are closing our clinical labs."

or to mirror the original statement "We have been forced to close our clinical labs."

It's not that they need to grovel, it's that the phrase "we decided" is not an accurate representation of the situation.

Sure they decided. They could fight back with legal challenges. They could spin off the labs into an independently run entity. There are lots of choices besides shutting them down.

"Due to regulatory pressure, we have decided to..."

"We decided to" devoid of any qualifiers makes it sound like it was a decision made with full autonomy, and not a decision made because you were backed into a corner.

Are your inferences really the important thing? Does it ultimately matter to anyone on any timeframe beyond a two minute hate?

The typical press release doesn't matter at all to most people at a timeframe beyond two minutes.

But to the extent that it does, it should be based on an accurate representation of reality and not misdirection.

Technically, it was Theranos that was after our blood.

No, they really only rolled dice to determine their results anyway, so there was in fact no blood needed.

Beyond not wrestling the letter of the language of the letter to Theranos's best but inaccurate presentation, I would suggest Elizabeth Holmes live the next half-decade with a much lower profile. Step away from the medical devices industry, and upper management in general, either to study or work in a different field/within a different authority structure. If she has any aspirations towards family and children, now would be the time to pursue those particular goals. She is visibly intelligent and ambitious, and I would be very interested to see her return after an extended recollection of her prowess, tempered by some character-building not profit motive oriented experiences. Given the evidence thus far, I fear for her further march into a high-time preference mode, and ultimately burn-out.

Almost every day we have people who ran startups that didn't work out who end up here posting legitimate and honest thoughts about what went wrong and how they can move forward.

Contrast that with this, where instead of owning literally any responsibility for the farce that their product was, she continues to go on this same distortion tactic: Never say anything that's actually a lie, just say a whole lot of things that aren't the truth.

The only thing she seems to have learned is a lot of regulation that her company ran into, and how to work around it.

Every single one of those founders who come on HN and give honest opinions also wrote press releases just like this.

You have not heard from Elisabeth Holmes because of this, you've heard from the CEO of Theranos, whose name is Elisabeth Holmes. I don't know what she has/hasn't learned, but the audience for this was not HN, and she's not giving her personal experience in this letter.

Writing for yourself is completely different than writing for a company, but you know that. Come on, we can do better.

It's more than "a little odd". It's a blatant lie.

No, it is factually accurate. Instead of firing the CEO, they decided to pivot. Regardless if it was the decision they would have made with no restrictions placed on the company, it is the decision they made, all external factors included.

She's owns it all. They can't fire her. She has controlling shares of everything.

No. Deciding is when you have a choice. They didn't have a choice. This is a lie.

Yes, they did. They had a choice to fire Holmes and keep on with the blood testing what have you, and didn't. It is factually accurate and not defending them nor spin to say that. I'm sure it was considered.

This outcome was not a certainty. I think the feds wanted that choice, to be honest. It's a smart play: we don't like Elizabeth Holmes or the work you're doing, but we maybe sorta kinda want to see you succeed because it's a pretty good idea if you'd get your shit together, so pick one and fix it.

>They had a choice to fire Holmes

According to

http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther...

>Holmes, meanwhile, isn’t going anywhere. As the C.E.O. and chairwoman of Theranos, only she can elect to replace herself.

Technically true but I think it's practically false. Theranos isn't in the black and won't be any time soon. They need the indulgence of investors to continue. My guess is a large fraction of current stockholders preferred this outcome.

Honestly, it hard to see why. She does have name recognition, but it's like Martin "I'll jack up the price of your drug and laugh about it"-type notoriety

I imagine it was because the technology that they were pushing didn't work. So even with Holmes out of the way and the ability to continue doing what they were doing g there was no point, it didn't work they were never going to get it work the way it was supposed to, so they pivot and keep her on as the oonly way they could potentially still make a return for investors. I imagine a lot of people have invested a lot of money and now want to get some sort of product out the door and an IPO or Military Contract to recoup some costs.

CEOs of pre-IPO companies rarely get pushed out?

What is an investor saying if they choose to fire a CEO? Fundamentally they are saying that they misjudged the CEO... they're a poor judge of character.

* CEO gets sued: bending the rules seems to be totally ok. Just another risk factor.

* Company spending years in R&D: Science takes time.

* CEO runs out of money: There's always an element of risk. Was an interesting play but didn't pan out, NEXT!

Here's the best possible exit for a failing science based startup:

* Acquisition with large dollar value in the press release based on "reaching certain technical milestones".

But anyway... I think in Theranos' case the investors are still... invested.

There's still a lot of money coming in from China, maybe they think someone in China will buy them for a huge chunk of change regardless? (does happen, and acquisition and investment often don't reflect how good the basic technology is).

Maybe there's already a private market in Theranos shares, giving them some liquidity?

Maybe they still genuinely think it's a good idea. Honestly, neither you nor I would have invested in them. But they already DID!

Surely there are enough negatives surfacing about Holmes and Theranos in general that... while firing the CEO may admit that they had been a bad judge of character, not firing her indicates that they still are.

Maybe. Or perhaps now they're going to keep her on a very short leash. In their shoes I could see bringing in a strong executive team, people with significant health care experience, while putting her in the role of visionary founder who does a lot of PR and rah-rah but has very low operational control.

Exactly. You have an individual at the head of the corporation that has done fraud. Do you really believe that's going to change from this point? Most people would have enough sense to let shame see them out. That's even more alarming.

Tangential, but what's really bad is even Martin Shkrelli commented that the EpiPen pricing was outrageous. That's kinda like Hitler saying you're too much of a tyrant.

Hmm. Surely under the circumstances, assuming she's somewhat rational and aware of fiduciary duty, she'd entertain the idea with her board. Can always bring her back. Then again...

Is it 100% true that all that would be needed was to fire Holmes?

maybe they would have to have a functioning product also

No, we mean then they wouldn't have had to pivot. She was banned.

They're under investigation for basically lying about the tech behind their core business model. There are fundamental problems not fixed by simply firing Holmes. Pivoting or closing shop seemed inevitable.

yes but to be fair blatantly lying has been their business model from the very beginning

They could still stay open and not accept Medicaid/Medicare payments. It would just be terrible for business.

I love that. In a shop I often go, they sometimes say they "had to remove/recall some food because of probable presence of salmonella". The truth being that the government food security agency forced them to do so because they did find some salmonella, after controlling them on the quality of their operations.

That's what "communication experts" are for, I guess.

> In a shop I often go, they sometimes say they "had to remove/recall some food because of probable presence of salmonella". The truth being that the government food security agency forced them to do so because they did find some salmonella, after controlling them on the quality of their operations.

This is a place that has poor quality control to the point that the government has forced them to do multiple recalls for salmonella and you still go there often?

Are you suggesting that Holmes is distorting the truth???

Ha ha! I see what you did there.

While I totally agree, pure politics is probably not appropriate here.