Have you heard of Theranos? Probably. The company’s CEO Elizabeth Holmes grew famous in recent years for her signature black turtleneck and her appearances in many magazine features/events praising influential tech executives and young entrepreneurs.
One of those pieces (which appeared in the New York Times Magazine) was written by Laura Arrillaga-Andreessen, whose husband Marc happens to be both a major venture capital investor in Theranos and a condescending tool. NYT public editor Margaret Sullivan later agreed that this article was both an obvious conflict of interest and a perfect example of what we like to call #PRFAIL.
The reason we bring this all up is that Theranos currently employs multiple veterans of the TBWA\Chiat\Day organization, including:
- CMO Carisa Bianchi, former president and chief strategy officer at TBWA L.A.
- CCO Patrick O’Neill, former ECD at TBWA
- Creative director Gage Clegg, former GCD at TBWA
- Director of consumer insights & planning Jodi Shelley, former TBWA planning director and global planning partner at Ogilvy & Mather London
The original Wall Street Journal piece from yesterday is behind a paywall, but The New York Times published a summary this morning.
In short, the federal government will bring its regulatory hammer down on Theranos very soon unless it complies with strict regulations that already apply to every other company in the testing business. From the NYT:
“The government officials proposed a series of sanctions against the company, including the revocation of the company’s certification for its California laboratory, its primary operation, and suspension of its eligibility to receive payments under the Medicare insurance program.
If the laboratory’s certification were to be revoked, Ms. Holmes and Theranos’s chief operating officer, Ramesh Balwani, would be barred from owning or operating any laboratory for at least two years, the letter said.”
The issue here is that Theranos aspires to disrupt the blood testing industry but has not been subjected to the same level of scrutiny/review as the companies whose business models it threatens. In the latest update, Theranos admitted that “deficient practices” have indeed occurred at its primary laboratory in California; it recently moved all of its testing efforts to a different lab in Arizona. The most interesting line in the story has to be this one, emphasis ours: “At the time of the inspection, the laboratory director was a local dermatologist who continued to run his medical practice while also supervising the lab.”
We have no insider knowledge of Theranos’ products or operations and we obviously cannot say whether the company has done anything unethical or violated any existing standards. Holmes and Balwani also stand to lose quite a bit more than any of the TBWA veterans mentioned above.
Still, this is a relevant story to anyone in the Los Angeles advertising community as well as those following the now-common “professionals leave the ad industry world to work at startups” narrative or its alternative, “agencies take steps to try and prevent their employees from leaving en masse to work in tech.”
We have little doubt that some in the business have followed the latest news about Theranos with a side of Schadenfreude.