How the world's youngest female self-made billionaire is shaking up the health care industry
Adam Rifkin stashed this in Theranos
Elizabeth started Theranos in 2003 but did not have a deal with Walgreens until 2013.
That's a decade of work before any success.
"Holmes had a vision so significant, she didn't want her competitors to catch on until she had the creation of an entirely new market--consumer health technology--well under way," he observes in his Inc.com column. In that time, he points out, Holmes established a real business with 700 employees and prominent investors such as Larry Ellison and VC firm Draper Fisher Jurvetson.
The Authenticity of Awkwardness
To be sure, there are other reasons Holmes has become iconic:
- She is a college dropout, which puts her in the company of famed subversives like Mark Zuckerberg, Bill Gates, Steve Jobs, the Peter Thiel posse, and Kanye West.
- She is taking aim at a process with a global scope. All over the world, whether you're young or old, you at some point will find yourself providing a blood sample. This is not software as a service targeting a business-to-business niche or a regular consumer product hoping to snare some market share. This is potentially as commonplace as medicine itself.
- She owns more than half of Theranos. Which means, based on the company's $9-billion valuation, she is a 31-year-old billionaire. Cue the categorical headlines about how one of America's youngest female billionaires is also a college dropout.
But above and beyond all this, Holmes has earned the veneration of other founders because of the length--and difficulty--of her journey.
Other dyed-in-the-wool founders recognize Holmes as genuine, like-minded, and one of their own. She is no impostor. She was an entrepreneur before movies and television made it cool. She is substance where often there's only flash.
Her TED Talk provides more evidence of this. Watch just 30 seconds of it, and you'll see: Holmes comes across as an awkward techie or scientist, rather than a polished public speaker who knows how to please a crowd.
"For all of her practice at presentation, Holmes still sometimes has an engineer's difficulty in clearly articulating how Theranos will advance the cause of preventive medicine," observes The New Yorker's Ken Auletta in his profile.
He writes it like it's potentially a bad thing. In fact, there's an authenticity in Holmes's lack of polish that other founders respect. And that respect, earned through a decade's journey, is at the heart of her hard-won iconic status.
3. She hates needles. She told CNN Money in 2014, "I really believe that if we were from another planet and we sat down to put our heads together on torture experiments, the concept of sticking a needle into someone and sucking their blood out would probably qualify as a pretty good one."
So... has she actually shipped anything?
Her Theranos website mentions product benefits as:
1) less pain to the client
2) more accurate results (not sure what that means)
3) faster results
No mention of pricing value of these tests relative to current methods, as in is this service at a premium or at a discount to other testing options?
I don't know of many to any doctors left practicing these days outside of jungle settings and Ebola triage tents who can decide what tests to run on their patients because they feel humanistic about it... most lab testing menus and sequences of escalation of diagnostics are determined by insurance companies and their allowable categories.
We presume she's either figured out how Theranos can by-pass them and go directly to the patient or already has a few insurance networks signed up and in her back pocket?
Not sure why I, as a consumer, would give much of a phuck about using Walgreens to do my blood draw at this point except that if the total cost gets me to less than I would have to pay for doctor's office visit for the pleasure of getting the test done. I don't really care enough to pay more so I can know three days earlier what my triglycerides and albumen levels are...
And so then, who is she really disintermediating and how mad as hell are they?
Her service is at a discount to other testing options.
She won't be happy until Theranos is a $1 (to consumers) blood test.
I think even now it's under $10 whereas normal blood tests of today run hundreds of dollars.
That's what she's disintermediating / disrupting.
That's still not clear: I don't pay anything for a doctor ordered blood test when I have insurance. She's not disintermediating my use of those lab services at my doctor's office because he's the one ordering them either at my behest or his own. I still need my doctor to prescribe the tests so they're covered by my insurance.
So as an end consumer of such lab test information Theranos is an added cost (however marginal) unless and until I don't have to go to my doctor's office for the prescription for the test and can avoid that co-pay. And regardless which testing option I choose, I will still have to go back to my doctor's office to review the test results and thereby pay another co-pay. Meh.
If anything, she's disintermediating conventional labs and testing facilities IF she can get doctors to prescribe, and/or accept her unprescribed lab results from a patient's own initiative... that is as far as I can tell.
I think the insurance companies are big players here and they're conspicuously absent among the details about her company ... at least superficially so, and that's probably smart.
so are theranos only helpful to the uninsured? is this more of a minute-clinic sort of thing?
Emily eventually both.
Rob, insurance companies are increasingly refusing to pay for blood tests so that cost is increasingly being passed along to consumers. A friend of mine recently had to pay $500 for blood work to determine an iron deficiency and her insurance company refused to cover that even though it was ordered by the doctor.
That said I think you're right that their primary win is in disintermediating conventional labs.