Theranos had an excellent market fit—-people hate having blood drawn—-but the technology did not work and fundamentally could not work. The whole point of being a subject matter expert is to learn about things like that.

It’s true that there are other routes to becoming an expert in something (and proving it). A masters and a stint at a well-known company certainly works for many people; bootstrapping your own company might be an option too, but you’d need to be very successful to establish your bonafides. The advantage of a PhD is that it’s a fairly well-known quantity.