April 4, 2019
March seemed to be “Theranos month” on U.S. television, as network, premium cable, and streaming channels ran stories on the stunning rise and fall of the Silicon Valley company helmed by Elizabeth Holmes—who claimed she had found a way to test for a full range of diseases with a small blood sample and a “magic box.”
Now, Erika Cheung and Tyler Shultz—two former employees who blew the whistle on Theranos—have launched a new organization called Ethics in Entrepreneurship, which seeks to help other entrepreneurs from suffering the same fate as Holmes, CNN reports.
Cheung, who lives in Hong Kong, is the former Theranos lab worker who tipped off the Centers for Medicare and Medicaid Services to look into the blood testing startup.
Shultz, who is the grandson of Theranos board member and former Secretary of State George Shultz, was an ex-research engineer instrumental in helping Wall Street Journal investigative reporter John Carreyrou expose the company, according to the news outlet..
Theranos had a reported $9 billion valuation and employed hundreds of workers who bought into its mission to create a cheaper and more efficient alternative to traditional blood testing methods. After Carreyrou’s initial investigation into the company in 2015, its technology and testing methods started to unravel.
In March 2018, the Securities and Exchange Commission settled charges against Theranos and Holmes, over “massive fraud “involving more than $700 million raised from investors. In September, Theranos announced plans to dissolve itself. The company remains the subject of an ongoing criminal investigation by the Department of Justice.
Ethics in Entrepreneurship, which is seeking non-profit status in the United States and Hong Kong, according to CNN, wants to make talking about ethical practices the norm in the startup world. The founders plan to help connect early stage entrepreneurs to ethicists, seasoned entrepreneurs, and other relevant industry experts who can guide them on how to make ethical decisions when building a company. It also plans to make available tools and frameworks for ethical decisions that benefit businesses, employees and consumers.
“There were so many instances, even for someone like Elizabeth Holmes, to turn back and say, ‘I’m taking things a little too far here,'” Cheung told CNN Business. “She had many opportunities to — even at the very end, she could have said, ‘OK, I’m sorry. I messed up. I’ll stop processing patient samples and I’m going to get my team together, we’re going to work on this and we’re going to make a good product.’ I don’t think she’s ever said that, until she had to go to court and say those things.'”
The organization is accepting donations on its website to help support the development of resources guides and workshops.
“I do think entrepreneurship can empower people and empower society but we also have to not let things escalate to this degree,” Cheung said.
Research contact: @saraashleyo