The story of a unicorn
By Teamspirit on Thursday, 12 January 2017
If there’s one thing financial services is known for, it’s regulation. Some say it has too much, others say not enough.
Whatever anyone’s individual view of how much regulation is the right amount, the story of biotech startup Theranos shows the value it can have within particularly sensitive industries.
Less than a year ago, Theranos was valued at $9billion and employed 790 people. Today, the business has undergone a major pivot and has shed 570 employees.
The company’s journey from unicorn to uncertainty is one all fintechs and financial services companies looking to innovate should pay attention to.
Bursting onto the scene in 2014, Theranos promised to revolutionise blood testing with a new, proprietorial technology. However, throughout 2015 questions and rumours swirled, and a Wall Street Journal investigation suggested that only 6% of Theranos’ blood tests used their own tech and that results were inaccurate.
It took until January 2016 for US medical industry regulators to step in and announce that Theranos’ tests “pose immediate jeopardy to patient health and safety.” In July, Holmes was banned from operating laboratories in the US for two years. The company then pivoted from blood testing to building lab equipment, and laid off 340 people in October, ahead of further downsizing this month.
The drive and enthusiasm behind Theranos is the stuff startup dreams are made of. But this story highlights the importance of both proactive regulation, and the need to engage with regulation early and be willing to evolve transform because of the challenges and opportunities that it offers.