In addition to the potentially devastating credibility problems yesterday's Wall Street Journal report on Theranos may stir up for the biotech startup company, there's another question the ensuing uproar is raising — does healthcare tech startup culture need to fix how it creates and sustains hype?
"It's hardly unusual for a startup to over-hype its potential in its early days," wrote Issie Lapowsky in a post for Wired. She points to examples of the huge promises made in the early days of companies like Uber, Facebook and Tinder. Startup leadership will typically make grandiose reassurances and suggestions about the enormous potential for growth and disruption their companies will surely bring to fruition.
Usually, these promises are necessary for attracting investors and are overall harmless, Ms. Lapowsky wrote. "But Theranos is a cautionary tale of what happens when that mentality creeps into sectors other than software, such as medicine."
Overexposure and rapt industry attention at a young age, like the kind that Theranos and Elizabeth Holmes, its CEO and founder, experienced, are difficult to handle. Biotech and medical startups have a particularly difficult time managing overexposure and attention as the burden of proof generally is on the inventor and company to demonstrate the efficacy of their services or technology, before going full-bore into funding. Startups outside of healthcare can often invert this process, raising money and seeking backing in order to fund their proof of concept.
For Theranos, these difficulties and pressures could have been a contributing factor to the WSJ claims, namely that the company allegedly took steps to conceal information that contradicted their medical and scientific claims.
While it may be natural for the the tech world to apply its standards to startups in science and medicine, it only makes sense to an extent, according to Ms. Lapowsky.
"But there's an equal and opposite argument to be made: Not every industry can or should move fast," she wrote.
It may be that companies like 23andMe — which faced Food and Drug Administration backlash similar to Theranos in regards to unsubstantiated medical claims — can survive so long as they take the time to seek proper FDA approval and reign in their promises. It hasn't hindered 23andMe's ability to fundraise.
Read the full Wired post here.