Business Unusual

When unicorns lose their horns

In the technology startup world 90% of projects will fail but investors can’t be sure which will be the one to succeed. When one does, the investment spikes, setting up expectations that a unicorn has been born.

Unicorns are exciting (or at least appear that way) and get lots of media coverage which adds to the hype (See the Hype Cycle) and attracts both those that want to help by getting a job or looking to find if they could copy the idea and try do the same.

Here is the story of a unicorn that may survive the current difficult period or will in time be shown to have never been an actual unicorn in the first place.

Theranos

A medical company that could run over 200 blood tests using the blood drawn from a pin prick and have the results in minutes sounds more like science fiction that fact (more on a tricorder below).

Theranos, a privately-owned medical company, set out to do that and with a $9 billion valuation appeared to have created something amazing. But tests have shown that the results are not as accurate as they needed to be.

The CEO, founder and 50% owner Elizabeth Holmes (32 in 2016), is the youngest female self-made billionaire.

She is an American and was a great student wanting to pursue medicine from early on. She lived for a time in China with her parents and then worked on a bird flu project in Singapore. She had a fear of needles and opted to pursue chemical engineering instead of medicine.

While studying at Stanford University she founded Theranos in 2003 at age 19. She left her studies to pursue the idea of doing extensive blood testing with a process that needed only a fraction of the usual volume of blood and much less time.

The device, called Edison, attracted significant investment (over $400 million, some reports say over $700 million) and partnerships with large companies to manage the blood testing on their behalf.

Holmes and Theranos have 100 patents on their methods and appeared to build on their breakthroughs to capture a significant segment of the medical testing market.

Then, in October 2015, the Wall Street Journal reported that the FDA had carried out an inspection that found the device was inaccurate and only approved its use for one test. It said that the rest of the tests msut be performed using traditional testing systems.

Since then there has been more bad news in the form of a criminal probe to determine if the device is able to do what it claims. The supposed technology and patents have existed for more than a decade now so it is understandable that research papers on the effectiveness and means for doing the tests should be made available (at least to authorities and the scientific community). However, none are currently available.

It would either appear that this unicorn has lost its horn or it is battling a very tough period that one investor claims is motivated by competitors wanting to limit the disruption to the industry.

If it can survive the challenges to its credibility, and demonstrate that it can do the tests accurately with just a pin prick's worth of blood, then Theranos will go on to become as well known as Google and Apple and make Elizabeth Holmes one of the richest people on the planet.

If not, it would serve as a footnote that progress is messy and that medicine, in particular, has had a tough time overcoming challenges to our health.

Time will tell, but as fewer and fewer unicorns are being discovered, venture capital is becoming more circumspect about how it will use the capital. It is significantly down from its high point at the end of 2015. It might mean a slow down for disruption as access to significant capital is a critical part for new start-ups to challenge the incumbents.

Tricorder x Prize

Star Trek fans will recall a device used to determine what was wrong with anyone without touching them. Qualcomm offered $10 million to anyone that could design a device to mimic Dr McCoy's trusted tricorder. It launched in 2013 with 312 teams registering, In May last year that was reduced to seven finalists. The winner will be announced early in 2017 and, assuming the device works, medicine would have boldly gone where no-one had gone before.


Recommended

by NEWSROOM AI
Read More
The businesses that boomed and went bust on Business Unusual

The businesses that boomed and went bust on Business Unusual

Predictions, products and personalities featured in "Business Unusual" in the last three years.

TED, three letters with a plan to change the world

TED, three letters with a plan to change the world

TED talks are like a Wikipedia of transformative ideas. Now they plan to turn ideas into action.

TVs are becoming so good, our eyes may not be able to perceive the improvements

TVs are becoming so good, our eyes may not be able to perceive the improvements

When technology exceeds humanity's' capacity to use it

Surviving disruption - two global brands that dodged the bullet

Surviving disruption - two global brands that dodged the bullet

Disruption almost killed a 70-year-old toy company and a 250-year-old publisher.

Three moonshots that could change the world

Three moonshots that could change the world

A material that could turn friction into fiction; a bee to end our dependence on plastic and a single atom transistor.

To buy or not to buy? That is the question

To buy or not to buy? That is the question

The pros and cons of subscribing to versus buying digital content.

Popular articles
Did Ramaphosa announce a 'cupcake' of a stimulus package? Experts debate...

Did Ramaphosa announce a 'cupcake' of a stimulus package? Experts debate...

Eusebius McKaiser facilitates an economics debate with a panel of economists. about how the state should respond to the recession.

'She says I'm just waiting for this c**lie to move so I can take the photo'

'She says I'm just waiting for this c**lie to move so I can take the photo'

A caller on the Eusebius McKaiser Show, Zeenat says she was called a derogatory word for Indian on Heritage Day.

'This leaked document is calling a spade a spade'

'This leaked document is calling a spade a spade'

Breakfast Show Host Bongani Bngwa shares his views on the leaked report from the Thabo Mbeki Foundation.

Parliamentary manager shot himself over alleged bullying by boss

Parliamentary manager shot himself over alleged bullying by boss

It is alleged that Lennox Garane killed himself as a form of protest.

[WATCH] Vietnam's The Bachelor uproar as female contestants run away together

[WATCH] Vietnam's The Bachelor uproar as female contestants run away together

Khabazela shares some of the most popular tweets, posts, and videos on 'What's gone viral'.

WC DA leader refuses to hand over electronic devices as party probes media leak

WC DA leader refuses to hand over electronic devices as party probes media leak

Western Cape DA leader Bonginkosi Madikizela confirmed that he was asked to hand over his devices but he says that he refused.