> This is the same kind of bullshit I see in academia, where a new technology is promised to replace an old technology that works fine, but now they have a 9 billion dollar valuation!
I am not sure it is bullshit, maybe it's just competition?
Over time, companies within an industry become complacent, cut costs, and decrease quality of service. Somebody (a young idealist perhaps?) comes along and says, hey, we can do better! And because she believes in free markets, it must be that old technology (and indeed newer technology may have marginal benefit) is the culprit, not human greed or laziness or other deadly sin. So she goes, touts, implements and there is some success. However, then the giants will wake up to the threat. They will magically find the way to be more effective, as they always could have been, and they may even grudgingly implement some parts of new technology. And so the margin for the disruptor quickly disappears, and things will return back to the normal state of affairs, where companies can lazily collect fat paychecks for doing the necessary minimum. It's actually win-win for everybody, customers get a small technology/process upgrade, and she is now in the club!
The only minor problem is that this economic model is far from being optimal, but no one really worries about that except academic economists, since no one really knows how to attain the optimal model in the human society anyway.
Theranos' area of interest, diagnostic microfluidics, is nothing exotic or new to the giants in the diagnostic industry.
I spent a number of years with one major company in this field, and back in the 1990s they already had a decade of R&D, and countless millions of dollars, invested in this area. It was a difficult area of research back then and it continues to be.
The idea that one scientist could come up with a concept to outsmart those companies is certainly possible and makes a very compelling investor story. But the reality is probably a little bit different.
Worst case is that their technology has a few percentage points better outcome, perhaps by selectively sampling candidates during clinical trials or combining it with an existing method, and everybody gets charged a ton more money.
I am not sure it is bullshit, maybe it's just competition?
Over time, companies within an industry become complacent, cut costs, and decrease quality of service. Somebody (a young idealist perhaps?) comes along and says, hey, we can do better! And because she believes in free markets, it must be that old technology (and indeed newer technology may have marginal benefit) is the culprit, not human greed or laziness or other deadly sin. So she goes, touts, implements and there is some success. However, then the giants will wake up to the threat. They will magically find the way to be more effective, as they always could have been, and they may even grudgingly implement some parts of new technology. And so the margin for the disruptor quickly disappears, and things will return back to the normal state of affairs, where companies can lazily collect fat paychecks for doing the necessary minimum. It's actually win-win for everybody, customers get a small technology/process upgrade, and she is now in the club!
The only minor problem is that this economic model is far from being optimal, but no one really worries about that except academic economists, since no one really knows how to attain the optimal model in the human society anyway.