Wagon-Circling Versus Persistence  – 2017

I’ve posted before about the unraveling of medical-diagnostics startup Theranos, and founder Elizabeth Holmes, now revealed as a multi-billion-dollar fraud. See, previously, Theranos as a Cautionary Tale.

The story has useful lessons even for small-town Whitewater. I’ll illustrate one of those lessons today.

There’s a thorough update of Theranos’s dodgy claims now online at Vanity Fair. See, Exclusive: How Elizabeth Holmes’s House of Cards Came Tumbling Down.

The Vanity Fair update describes the work of Wall Street Journal reporter John Carreyrou.

Carreyrou had doubts about Theranos:

Carreyrou came away from [another publication’s] story surprised by Theranos’s secrecy—such behavior was to be expected at a tech company but not a medical operation. Moreover, he was also struck by Holmes’s limited ability to explain how it all worked. When The New Yorker reporter asked about Theranos’s technology, she responded, somewhat cryptically, “a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”

After Carreyrou began to write about Theranos, the startup’s employees predictably – but childishly – circled the wagons:

…the leaders of Theranos stood before their employees and surveyed the room. Then a chant erupted. “Fuck you . . .,” employees began yelling in unison, “Carreyrou.” It began to grow louder still. “Fuck you, Carreyrou!” Soon men and women in lab coats, and programmers in T-shirts and jeans, joined in. They were chanting with fervor: “Fuck you, Carreyrou!,” they cried out. “Fuck you, Carreyrou! Fuck. You. Carrey-rou!”

Holmes and Theranos, however, underestimated Carreyrou’s persistence:

On the Friday morning that they gathered in the war room, Holmes and her team of advisers had believed that there would be one negative story from the Journal, and that Holmes would be able to squash the controversy. Then it would be back to business as usual, telling her flawlessly curated story to investors, to the media, and now to patients who used her technology.

Holmes and her advisers couldn’t have been more wrong. Carreyrou subsequently wrote more than two dozen articles about the problems at Theranos…

Holmes and Theranos chose wagon-circling, Carreyrou chose persistence.

There’s the lesson: the defiant huddling of a few is no match for the persistent inquiry of one. Even among the talented and well-heeled, wagon-circling is futile, if predictable.

That’s why those committed to competitive standards know that there is no single story, no single post. There is only the return again and again to a properly distant, detached, and diligent inquiry.

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