How Theranos changed startup PR forever

Startups are prioritizing data and transparency after the blood-testing company’s mercurial rise and fall.

Elizabeth Holmes

Post-Theranos, startup communications professionals say they field more questions on transparency and data.

Photo: Michael Kovac/Getty Images for Vanity Fair

Theranos CEO Elizabeth Holmes used to attract the kind of press founders dream of. She had a glowing profile in the New Yorker and landed on the cover of Fortune and Forbes.

But now those same articles have been entered into evidence in her criminal fraud case, where she faces 11 charges for fraud and conspiracy to commit fraud. The statements Holmes made to hype her blood-testing startup are now what the government is using to prove she committed crimes.

“At the time, Theranos was an embarrassment for the entire comms world because it highlighted the worst possible stereotype — the evil PR spin doctor with no moral compass,” said Hadley Wilkins, who helps startups with storytelling as VP of Communications at Atomic. “Theranos was so wildly egregious in every aspect, but it did serve in making founders and startup comms in general laser-focused on data and numbers to tell your story.”

Gone are the audacious timelines of solving cancer tomorrow or getting self-driving cars by Christmas. In the years since the Theranos scandal broke, startup communications professionals say they field more questions on transparency and data, particularly those working in life sciences. The health care founders Wilkins works with are now spending more time and resources to bring on experts as board members (unlike the political heavyweights on Theranos’ board) and communicating more with regulators.

“No one wants to make claims before you have proof,” Wilkins said in an email.

Journalists have also become more skeptical. As a comms professional, Wilkins has had to do a lot more expectation-setting with founders so they know upfront that it’s likely a journalist will have to include a quote from an analyst on why a startup may fail. It’s also much more routine for journalists to be talking to former employees, she said.

Startup comms adviser Shernaz Daver has made it part of her job to help educate the media covering life-sciences startups on what questions they should be asking. When she was working for 10x Genomics in 2019, she was still hearing the “Why are you different from Theranos?” question from reporters. Life sciences and health care startups, particularly those founded by women, have faced more scrutiny, she feels.

“If you’re doing an app in the enterprise software business, you’re doing comms the way you’ve been doing comms,” said Daver, who is now CMO for Khosla Ventures and has been attending the Theranos trial. “I would say it’s different in life sciences. The media needed to be educated about what it was to be a legit scientific company.”

Often she’d point reporters to look at whether the startup had a chief science officer or a chief medical officer. Another clue could be the founder’s age: It matters less in the tech world, but for science, most founders stay in college longer and pursue graduate work, so founders tend to be in their 30s, she said. Peer-reviewed papers and patents are also indicators that a startup is doing actual research versus being another case of smoke and mirrors.

Often overlooked in the conversation is internal communications, said Catherine Afarian, who previously worked at 23andMe and is now head of Corporate Communications at health care revenue startup Akasa. Employees want to work on things that matter, and it’s important for there to be transparency and confidence that the leadership team is being honest and running the company with integrity, she said.

“The transparency and communications and scientific rigor is exponentially more important than I think it ever has been,” Afarian said. “It’s been fundamental, but now you can’t afford to discount it or downplay it.”

Theranos was infamous for a culture of internal secrecy, former employees testified in the trial. It sequestered its R&D lab, called Normandy, on a different floor from the rest of the company, and didn’t allow for much communication between the clinical and R&D sections. It also lacked the peer-reviewed research that would’ve been expected from a company of its age.

Afarian’s team at Akasa has had explicit conversations about wanting to publish in peer-reviewed papers about its AI models. It drives the internal culture to be research-first, but also helps in communications because it validates the work for employees and potential customers, she said.

“I think pre-Theranos, reporters, business partners and employees were probably slightly more likely to take companies at their word,” Afarian said. “I think now, because of Theranos, you have more employees and more business partners that would say ‘That’s great, but can you show me the data? Where was that published?’”

While the Theranos saga may have pushed more startups into showing their work and being more transparent, there’s still a shadow over female founders.

“It was already harder for them to get funding, and now it’s like, ‘How do we know you’re not going to be the next Elizabeth Holmes?’ And that’s not a question a male founder would necessarily get,” Afarian said.

It’s been tougher for female-founded startups, particularly those in health care, to shake the comparisons, Wilkins said.

“The ghost of Elizabeth Holmes is lurking in the back of people's minds,” she said. “Even if it's at a subconscious level, the comp is still there.”


Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.


Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories