Lessons of Theranos
The Bottom Line
BBC
4.6 • 615 Ratings
🗓️ 18 July 2019
⏱️ 28 minutes
🧾️ Download transcript
Summary
What can we learn from how one medical start-up fooled Silicon Valley and the world? Elizabeth Holmes dropped out of Stanford University at 19 to start Theranos. She promised investors and the public a revolutionary blood diagnosis machine which would be less painful, accessible and affordable than ordinary lab tests. She managed to raise $9 billion in funding. Now the company is worth nothing. Holmes and her business partner may face up to 20 years in prison for fraud. How did she manage to deceive some of the world's cleverest minds - and is there something about start-up culture and the cult of the visionary leader which encourages charlatans? Evan Davis and guests discuss.
GUESTS Rebecca Jarvis, chief business, economics and technology correspondent, ABC News Margaret Heffernan, author and entrepreneur Jos White, entrepreneur and partner, Notion Capital
Producer: Julie Ball
Transcript
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| 0:00.0 | BBC Sounds, Music, Radio, Podcasts. |
| 0:04.8 | Hello and welcome to a special edition of the programme. |
| 0:08.1 | We are going to look at one business story today. |
| 0:10.5 | You might call it a fairy tale or perhaps a cautionary tale. |
| 0:13.9 | It is certainly a spectacular tale. |
| 0:16.2 | It's the story of a company called Theranos, established by a young university dropout, Elizabeth Holmes. |
| 0:22.4 | She took Theranos to a multi-billion dollar valuation. She had grandees like Henry Kissinger |
| 0:28.2 | on the board. She had the best venture capitalists behind her. She had other shrewd investors like |
| 0:33.7 | Rupert Murdoch. She was fated in the business press. The only thing she never had was a product |
| 0:39.9 | that actually did what it was meant to do. Theranos got a very long way before the Wall Street |
| 0:46.1 | Journal reported that the Emperor had no clothes in 2015. Now there's a court case pending in August |
| 0:53.7 | 2020, which could mean up to 20 years in prison for Elizabeth Holmes and her co-defendant, Sunny Balwani. |
| 1:01.5 | But today we're going to recount the story and in particular pick out the lessons, both lessons in business and in life. |
| 1:09.2 | And I have three guests with me, who I hope will help |
| 1:12.3 | unravel the tale. Let us just meet them now. And first of all is Margaret Heffernan, |
| 1:17.4 | entrepreneur, businesswoman and author. Margaret, I'm less interested in your own business career |
| 1:22.4 | today. I'm interested in one of your books, Willful Blindness. Just tell us what the book was about. |
| 1:27.9 | The book was about how organizations often go spectacularly wrong or for very discernible |
| 1:34.8 | reasons. So why do they ignore the obvious? And Theranos is a fantastic example of this |
| 1:40.7 | in the sense that, you know, part of the willful blindness thesis is if you have a lot of |
| 1:45.1 | like-minded people, they'll all agree with each other. They won't see the kind of counter-arguments. |
| 1:51.1 | If you all agree on a similar business model, you might not see where its flaws are. If you have a |
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