Our compliments to the Wall Street Journal for exposing the mess there is at what could be a blockbuster company.
It appears Ms. Holmes ignored all or most of the tenets of starting a company, which we’ll repeat here, for the new year:
1. When you come up with the idea, indicate in your business plan how you’re going to get to market, and any approval processes that you might have to go through. And then do it that way, if you raise the money.
2. Everyone has competitors, so explain in your business plan how you’re going to market around them (It appears that Theranos never did this, despite raising over $600 MM in venture capital funds).
3. Don’t get your hype out in front of what you can actually do, at the time you can do it. It appears that Theranos got out way over its skis on both the test itself and the equipment to evaluate the blood tests. They should have done a smaller beta test with Safeway and Walgreens in their physical area, so they could work bugs out.
4. Watch your first hires. It’s clear Theranos should have made a technologist with medical background and operating experience its first hire, as Chief Operating Officer. Those people are available, but probably very expensive. We’re surprised Stanford didn’t offer to lend a hand on this, as a well known technology repository. It’s also surprising that venture capitalists didn’t install their own people in this highly touted startup, or do the hiring, since their money’s at risk.
5. Don’t start touting your company in speeches and symposia unless you’re at least sure the technology works, and the machinery surrounding the technology works. Do the early demos in your office or lab, in front of friendly folks. Bring your distribution partners into the mix.
6. If you’ve got truly disruptive technology, as it appears that Theranos has, take it slowly, and by the numbers. Don’t try to jump the shark; in this case, the company might be eaten by the sharks, along with Ms. Holmes.
7. At this point, with your company one step away from completely flaming out, evaluate whether you should go back to square one and prove the process and technology. The idea is so good, that it could be done the right way and succeed. It still appears that there are no challengers.
8. Call us; we’ve done this before, as we hope the post above illustrates. We’ve love to be involved in a high profile startup for the New Year.