Wow. It feels like a miracle whenever anyone takes a principled stand despite the hype and pressure of Silicon Valley and startup culture, never mind the usual corporate pressure. But this kid stood up to his own family, and lawyers hired by his family.
Fairly or not, Stanford will always have some association with the legend of Elizabeth Holmes, but the engineering school can feel proud that they produced a graduate who showed real ethical backbone. It's fairly easy to imagine oneself bravely standing up to Theranos after reading the WSJ investigation last year. It's another thing to be the guy who launched it despite legal and familial pressure.
If an ordinary employee tried to take such a stand, he would be ignored, shut up, fired, sued, or perhaps jailed, depending on how firmly he was willing and able to take it.
FYI: "As household staff served them dinner in the formal dining room, the elder Mr. Shultz said Ms. Holmes had told him Theranos’s blood-testing devices worked so well that they were being used in medevac helicopters and hospital operating rooms, Tyler Shultz recalls. He and his colleague knew that wasn’t true."
> The decision to confront the CEO personally was his own, he could've chosen the anonymous path all along.
It's worth pointing out that Shultz seemed to have acted in good faith initially, and apparently didn't think anonymity was justified:
> Mr. Shultz says he took his concerns directly to Ms. Holmes. When they met in early 2014, she encouraged him to talk to Daniel Young, a Theranos vice president in charge of biostatistics.
He seemed to have acted with optimistic intentions for Theranos. It was only later that he sent a more scathing email, after which he waited for a few days, got the arrogant reply from the Theranos president, and then quit.
Given all of the professional and personal reasons he had to hope the best for Theranos, he had plenty of excuses to just let things go with a it's-above-my-paygrade mentality. Because it was, on paper, above his paygrade, and his boss and coworkers have the prestigious degrees and engineering experience to argue that Tyler is just mistaken.
It's not easy in a cult-like company to call out shit even as/after the shit hits the fan. But it seems rarer to be the frog that jumps out of the warm water, when all the other frogs feel fine and are also threatening to sue the fuck out of you if you do jump.
An anonymous whistleblower is likely to be ignored however. I edited my reply to include this most likely option.
Schultz Jr was contacted in LinkedIn by a WSJ reporter, he did not hide his identity because he likely (empirically) realized that his anonymous complaint would be ignored.
He didn't have to hide his identity from a WSJ reporter because journalistic sources are protected by similar set of laws. To the readers of WSJ he was just a "confidential source".
In the article it says "In March 2014, he anonymously emailed his complaint to New York officials.."
Then the article says: "In March 2015, Tyler Shultz was contacted by a Journal reporter through the professional network LinkedIn."
Something doesn't match up here. I can only assume that his anonymous complaint did not reach the desired effect in a year, and he went via other channels, using his own renouned last name.
It would also seem rational for the investigative reporter to ping 20-30 LinkedIn contacts who listed Theranos as their employer in hopes that 2-3 would reply, so maybe he wasn't the only one the reporter contacted.
So your theory is that after Tyler's initial complaint, the regulators waited for a year, and then leaked the anonymous complaint to WSJ, which randomly contacted a bunch of employees, including the original anonymous tipper?
Alternatively, another employee tipped off the WSJ (Instead of, or in addition to a regulator,) and the WSJ started contacting current, and former employees, to see if their story had any legs.
You're right, he's not a federal employee. There are protections in place for private employees as well, though it varies by state, employment situation, and a lot more details I'm ignorant of.
Integrity is a costly thing, rarely appreciated by the people who should. Over the years I've discovered that the scummier the management the more it costs so in that way what it will cost you is sort of determined by your manager (or maybe their manager as well). I've also asked people who were looking to hire me how highly they valued integrity. Sadly both bad managers and good managers say they value it highly, but bad managers will work to get rid of you as soon as they realize you really meant it :-)
Integrity is costly, but only if you view financial loss as the sole cost, and ignore the upside of being able to live with yourself.
I'd love to believe that being honest and ethical will one day provide some kind of reward, but the reality is that it doesn't - in fact in this world you are indeed punished for it - so you just have to accept that being good is its own reward.
It's something I really struggle with - the fact that the more dishonest you are, the more willing you are to lie, cheat, steal, kill, mislead, destroy, hurt, insult, and all the rest, the more successful you will be. I've seen it over and over in business - retail magnates practically eat children for breakfast. I remember "do you employ any n-ggers" lady, who runs a major UK fashion label, and "I know we said we'd pay but what the fuck are you going to do about it, my brother's the local magistrate" with particular fondness. The worst part about the former was watching others in the business not care and still want to do the deal - I had to torpedo it, as there was no way I'd be able to work with this inhumane individual.
I mean - look at the PeOTUS - he's a shining example of what this world now holds as good. Hell, I remember posting 18 months ago about how Holmes wasn't all she seemed to be and HN calling me every shitty name under the sun (I was a misogynist, jealous, rageface, you name it), and yet now that it's the majority view that she's not all she seemed to be, that opinion is fine.
Tribes who blindly support the strong angry man, rather than the honest man. We'd rather go stick heads on poles over a yam theft than admit we didn't plant the yam in the first place. Nothing has changed.
>>I'd love to believe that being honest and ethical will one day provide some kind of reward, but the reality is that it doesn't - in fact in this world you are indeed punished for it - so you just have to accept that being good is its own reward.
What you are saying is true. Trump got rewarded the presidency for his lack of integrity. The lesson seems to be that only morons allow their sense of integrity to rule them.
Trump would have won, for the simple reason that he can slip between incongruent realities seamlessly - he is so well practiced a liar that speaking two contradictory untruths in a sentence doesn't cause him pause, and his audience selectively hears the truth they wish to hear. Honestly - watch interviews with his voters - he is all things to all men, often contradictory things. He projects his realities outwards, and his followers reflect them back to him, amplified by their own perceptual filters, and it reinforces.
Take a straight man like Sanders. He's consistent. When you only work with one reality, as he does, you limit your ability to slip and feint between narratives as trump does, and as a result your appeal is limited to people in that or similar realities.
In short, if you're prepared to cheat, any move is legal, and an opponent playing by the rules cannot win - particularly if you are also the adjudicator.
It doesn't really matter. Trump would just have made up lots of stuff about Sanders and people would have eaten it up. I mean, most people think that Trump is more honest than Hillary. Once you've gotten to the point where people are too stupid to distinguish between the two you are fucked. You even see it here in HN with supposedly smart people(maybe). They like to suggest or imply that Hillary's flaws are at the same level as Trump's. This country is doomed.
Or maybe you mean people in Macedonia would have made up a lot of stuff and Trump would just have ran with it! The one thing with narcissists is their lack of creativity (there are a few exceptions, but Trump isn't one of them). So they rely heavily on others to do anything.
I went digging but it's a long way back in my comment history, when breathless stories about their revolutionary technology were hitting the front page. Nobody really appreciated me picking holes in the makeup of their board, or the rather contrived mutual star vehicle setup they had her in.
I do have a tendency to be cynical, but I do so based on experience, both first hand and from history.
> But this kid stood up to his own family, and lawyers hired by his family
If I'm reading the article correctly, the lawyers who harassed him were hired by the company and not by his grandfather. The only lawyers his family hired were the ones fighting for him.
Ah yes, you're correct. The lawyers were at his grandfather's home, but not directly hired by him:
> His grandfather asked if he would sign a one-page confidentiality agreement to give Theranos peace of mind. According to Tyler Shultz, when he said yes, his grandfather revealed that two lawyers were waiting upstairs with the agreement...Tyler Shultz says his grandfather protested to the lawyers that this wasn’t what he and Ms. Holmes had agreed to earlier, but that Mr. Brille kept pressing the younger Mr. Shultz to admit he had spoken to the Journal.
Still, the grandfather was working in concert with Ms. Holmes, and I imagine at the time, it would've been difficult for Tyler to give his grandfather the benefit of the doubt, assuming that Tyler was not expecting lawyers to jump out at his grandfather's command.
I actually missed the paragraph where it's mentioned that his parents "pleaded with him to agree to whatever Theranos wanted" and told him that they might sell their house to deal with the legal costs. Add that to the checklist of things I'm not sure I could do if I were in his shoes.
(That his parents only responded to the WSJ reporter via a prepared statement suggests that there's still tension.)
I just want to point out that Theranos is involved in lawsuits with nearly everyone now. Former employees, investors, its pivotal business partner Walgreens, the federal government, state governments and they've threatened legal actions against journalist and news outlets. Their product turned out to be sham. They covered up the evidence. They threatened everyone. They resorted to intimidation tactics. All while people's health were on the line.
Theranos is without a doubt among the worst companies to ever come out of the Bay Area. They're like a real life UNorth (Michael Clayton film). I hope their collapse is complete, utter and thorough. Everything and everyone in their leadership team painted with that brush for the rest of their career.
The WSJ and their journalist John Carreyrou ought to be commended and probably win a pulitzer for their coverage of Theranos.
> Theranos is involved in lawsuits with nearly everyone now.
Good. They were playing games with people's lives. It is one thing to play startup when it is Uber for Dogs and puppy ended up not seeing its friends at the park that day, it is another thing to mess up blood test results.
If someone who got hurt can come forward and wants to press criminal charges, they should get all the support needed. I can understand mistakes happening, but lying and going forward after they knew was abhorent.
Careful, some/most(?) of the lawsuits aren't because of risking patient's lives. They're for things like defrauding investors. They're not somehow more guilty because they also happened to do some other wrong thing at the same time.
I understand and saying maybe there should be some criminal investigations as well. Someone dying or getting injured is not out of the realm of possibility when they had known bad test results and continued anyway.
"The only reason I have taken so much time away from work to address this personally is because you are Mr. Shultz’s grandson."
--Theranos President Sunny Balwani to [Theranos employee/whistlblower] Tyler Shultz in a 2014 email
Ouch.
(Tyler is the grandson of fmr Sec. of State/Treasury/Labor George Shultz, who was also a Theranos board member)
Edit: Another quote from the email:
"We saw your email to Elizabeth. Before I get into specifics, let me share with you that had this email come from anyone else in the company, I would have already held them accountable for the arrogant and patronizing tone and reckless comments."
> "As household staff served them dinner in the formal dining room, the [95 year old] elder Mr. Shultz said Ms. Holmes had told him Theranos’s blood-testing devices worked so well that they were being used in medevac helicopters and hospital operating rooms, Tyler Shultz recalls. He and his colleague knew that wasn’t true."
I'm absolutely against ageism, but when you're 95... maybe it's not the period in your life where you should be attempting to vouch for groundbreaking biology on the basis of someone else's claims.
If I'm trying to convince my grandson not to talk to federal regulators, I'd say that passes the bar of being complicit in the scheme.
And absolutely agreed, but at the same time I've heard biotech VC firms gave Theranos a pass. But I guess that speaks more to "If you don't have in house expertise, hire someone to perform your technical/scientific due dilligence."
This kind of stuff makes my blood boil. I work at a medical device manufacturer that does it right, and when such shoddy products and process get passed off as viable, like they did at Theranos, it's never not on purpose. Everyone in charge there is a hack fraud and well aware of what they did. But I doubt they'll ever experience any negative consequences beyond temporary business setbacks.
Shultz seems alright. Too bad it takes someone fresh out of school with little to loose and not yet jaded to blow the whistle.
I ask myself would I have had the balls to do this, to stand up to the lawsuit, which I clearly couldn't afford? In my 20s maybe. Now probably not. It seems wrong that you can threaten whistle-blowers with stealing trade secrets. There really needs to be a solution to this problem. Obviously a company has a right to trade secrets but an employee thinking they faked results is hardly a trade secret. Maybe we need a special court to examine such things. Do the whistle blower statutes have any solution for this like extra penalties for trying to intimidate whistle blowers with lawsuits?
I think there are laws covering intimidation/threats/etc of whistleblowers; I'm not sure what their status is, or whether they are federal only, and/or if states (etc on down the pyramid) have their own statutes...
...at least, that's what I understand currently - for all I know they've been so gutted to be completely useless.
There are plenty of laws that protect you, but using them to defend yourself can be incredibly expensive. It's never a good idea to piss off a vindictive person with money (Or a retired lawyer.)
It makes me wonder how the grandfather Schultz could REMAIN ON THE BOARD as all this happened and even invite Ms Holmes to attend his 95th birthday.
That's a very sad thing for Tyler to have to get through. At 95, one can drop dead literally any minute. The fact that elder Schultz is not prioritizing family over the board makes me think the guy is mentally checked out.
It's incredible to think of all of the harm that Elizabeth Holmes has created through her desire to be the next Steve Jobs.
She has very probably killed people, ruined families, and caused at least one suicide [1].
And all for what? The company will probably be bankrupt. She'll suffer few consequences, as her connections will probably be enough for her to get a job as, at the very least, a VC or as an entrepreneur-in-residence at a VC firm.
From the article: "the elder Mr. Shultz said Ms. Holmes had told him Theranos’s blood-testing devices worked so well that they were being used in medevac helicopters and hospital operating rooms, Tyler Shultz recalls. He and his colleague knew that wasn’t true."
At that point it was an internally known failure yet she lied with a straight face. I'm full of contempt for such a creature and full of admiration for Tyler Shultz.
>elder Mr. Shultz said Ms. Holmes had told him Theranos’s blood-testing devices worked so well that they were being used in medevac helicopters and hospital operating rooms
wouldn't a CEO telling material lies about company's product to board members constitute some kind of felony fraud?
She is like Steve Jobs only in a superficial way. She has a privileged background while Steve Jobs grew up in a middle-class family which could not afford his college. She dropped out because she wanted to be like a dropout like Steve Jobs. She lied about her revolutionary products while Steve Jobs did create revolutionary products with others. She wears a turtle neck because Steve Jobs did.
Steve Jobs said (in the Stanford commencement address) that he couldn't tolerate seeing his parents spend their life savings on his college and so he dropped out.
Like most sociopaths, she will no doubt reappear in a few years. She'll show up with some well-honed, vague expression of regret and implication that she was overwhelmed by her duty as a woman do accomplish whatever.
If that's what she wants (...and does anyone on Earth doubt it?), she will need to produce and star in a few adulatory-yet-irreverent reality shows. She can develop an asshole-with-a-heart-of-gold persona in a safe unchallenging milieu, and then recycle that persona on all the social and political bloviation platforms. Can't miss!
> "When Rochelle called Holmes's office to explain what had happened, the secretary was devastated and offered her sincere condolences. She told Rochelle Gibbons that she would let Holmes know immediately. But a few hours later, rather than a condolence message from Holmes, Rochelle instead received a phone call from someone at Theranos demanding that she immediately return any and all confidential Theranos property."
Her father's with USAID, which does help explain the foreign policy connections.
USAID is much more powerful than is commonly recognized, with an unclassified budget about twice that of the CIA, and is frequently involved in international strategic matters.
This is probably a naïve question, but what were they hoping to get out of it? Holmes gets catapulted to a position of power and does favors for them in return, the satisfaction of being a mentor, ...?
Money. If Theranos were financially successful (At getting an enormous DoD contract, even if they were, technologically a failure), they would have become very wealthy.
A note to anyone who ever works for a CLIA or FDA regulated company: disclosing that a company is falsifying test data is NOT violation of a trade secret and in most cases a company that takes action against you for doing so is in violation of the False Claims Act.
It's time now for all the VCs and entrepreneurs who supported Holmes to now come out and say that this behavior is abhorrent and should not be tolerated.
My understanding is that the board of fellows for Harvard Medical School is more relate to fundraising than an endorsement of the members' life achievements
So has Theranos fully collapsed yet? Is it still a thing? I keep hearing how it's this big house of cards that has collapsed but then... it's still going on?
It still has a ton of cash, and the share structure is such that (as I understand it) Holmes still has voting majority. It can survive in "zombie mode" for a long time depending on how long the lawsuits take.
It seems to me his family was ultimately incredibly supportive (granted, they were initially skeptical) and are doing their best to balance their interests. His parents were willing to sell their house to cover legal fees. His grandfather referred him to a lawyer and supported his grandson in the meeting with company lawyers. Also their statements regarding him were very heart felt and positive. They mention the relationship with the grandfather being strained but that could very well be a result of PI surveillance and impending litigation making discussions risky, so it's not necessarily anything personal.
Seriously, props to his parents. None to grandpops, though - seriously, if your kid is an undergrad at Stanford and dreamed of working at a company, and then comes and tells you that the entire thing might be a sham? It would take a lot of evidence to sway someone's mind like that.
It's trivial by comparison but I can't help but imagine all of the people who are pressured to do unethical or questionable things by their managers who can do little but quit. This probably happens across corporate America on a daily basis where the stakes are much smaller.
> Former Secretary of State Henry Kissinger, former Secretary of Defense William Perry, and former Sen. Sam Nunn, all fellows with Mr. Shultz at the Hoover Institution, joined the Theranos board around the same time
Quick heuristic: if a startup all of the sudden needs secretary of defense and secretary of state on the board, there is probably shady stuff going on and they need some powerful people with connection to cover it up.
You have to admire him for standing up to them and not folding under pressure. Sending that initial email just painted a target on his back. I wonder if things would have played out differently if he quit first, then leaked the information in secrecy.
Pretty brave man. 400k legal fees...yikes. I can't wait for Theranos to be over.
As an aside:
"""One validation report about an Edison test to detect a sexually-transmitted infectious disease said the test was sensitive enough to detect the disease 95% of the time"""
I'm assuming this is reported wrong and it was actually 5% alpha/95% confidence and they were basically p-hacking?
John Carreyrou at WSJ did a masterful job of making sure it wasn't a mystery that the risk to the family was how profoundly connected and wealthy they are. Holmes eating thanksgiving, etc.
I feel the email from the president was enough to justify the title by saying 'you're connected, which is the only reason I'm responding' but the other comments like 'staff served dinner' and 'lawyers hiding upstairs'.
It would never be a mystery in majority of homes if there was someone waiting in the wings to present papers.
What's missing from all this discussion is how everyone (including this forum) was full of nothing but lavish praises for Theranos when it was the darling of Silicon Valley. It took an employee who was related to a senior official of the company whistleblowing it and then investigative journalism by WSJ for this company to be exposed.
How many other Theranos-like companies is the "Change the world" culture of the valley who refuses to bow down to scrutiny still praising I wonder?
This is one of those times when I wish HN comments sections allowed to embed images... [1]
Let this be a lesson, when a company goes mainstream due the eccentricity of its CEO instead than the quality or proved innovation of its services/products that's a red flag, even more so when respected professionals on the area claim the progress such company claims to have made is not feasible...
I have a hunch that Magic Leap will end up being some kind of epic disappointment along the lines of Theranos.
I don't think the comparison is apt. Magic leap is attempting something that many think is impossible, but if they don't succeed, they're not faking blood tests and putting people's health diagnoses on the line. Yes, if they don't succeed, some investors will lose a lot of money, but the risk isn't falling on users.
"Director Adam McKay, fresh off his Oscar for The Big Short, has even signed on to make a movie based on Holmes, tentatively titled Bad Blood. (On the bright side for Holmes, Jennifer Lawrence is attached as the lead.)" [1]
"The elder Mr. Shultz joined Theranos’s board of directors in 2011. Former Secretary of State Henry Kissinger, former Secretary of Defense William Perry, and former Sen. Sam Nunn, all fellows with Mr. Shultz at the Hoover Institution, joined the Theranos board around the same time. They couldn’t be reached for comment.
The unusually high-profile board gave Theranos an aura of power, connections and gravitas as it raised money from investors and developed the blood-testing devices Ms. Holmes touted as revolutionary."
Why would such an array of smart people come on board against their best judgment? Then it hit me, they must be a cabal of vampires that use the blood in furthering their immortality experiments.
"web link" != the link with the title of the article. It's literally the link with the text 'web' on the line below. That goes to a Google search for the article. Clicking the first hit takes you to the article, no paywall.
It's ok to post stories from sites with paywalls that have workarounds.
In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic."
please stop forcing your views of how this site should work on everyone else. this site doesn't exist solely for you and your views. Others, perhaps, have alternative views
