Someone with a PhD in microbiology explained to me (a layman) why what Theranos was claiming to do was impossible. She said you cannot test only a single drop of blood for certain things because what you are looking for literally may not be there. You need a full vial of blood to have a reliable chance of finding many things.
1. Is this simple but clear explanation basically correct?
2. If so, how could Theranos hoodwink investors for so long when possibly *millions* of well-educated people around the world knew that what they were claiming to do made no sense?
In: Biology
Because investors are desperately looking for what is called an investment *unicorn*. A company that most people underestimate, but that becomes exceptionally profitable and makes its investors a once in a lifetime return on investment.
Someone explained to me that during the Industrial Revolution, there were a lot of opportunities for investors to make fortunes. There were no cars for example, and suddenly there were car makers. You would have made a fortune investing in a product that wasn’t there before but that everybody needed.
The last that we saw something similar was with the GAFAs (Google Apple Facebook and Amazon). There wasn’t anything like them before. Employees who received company shares early on became millionaires once that the company traded publicly.
Anyway, back to Theranos. They presented themselves as a possible unicorn: they were alleging to be creating a revolutionary product that everyone would need. That’s all it was to get investors salivating and throwing money at them.
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