Monday, December 28, 2015

Some thoughts on Theranos

WSJ has followed up on its October 2015 article about Theranos with a new piece (I assume in response to Theranos's own response to the original article.

 (These pictures are ridiculous. Via Business Insider, The New Yorker, USA Today)

Having been in the medical device (specifically blood testing) industry for only a few months, I have limited experience in the development of these types of products, but thought I'd share a few thoughts:

1. I'm sure Theranos has developed the fundamental technology for the "nano"-scale (it's not really nano) blood testing methods they're touting to have, but I'm also sure that it is still many years away from full production and reliability/accuracy.
As with any new technology, its development will take years to reach any sense stability. When developing a water distiller with efficiencies unheard of before, we were able to achieve the desired results, but our prototype machines were far from manufacturable in high quantities, delicate, and very temperamental.

2. Elizabeth Holmes is supremely confident in her technology, but may be arrogant to a fault.
As I said, I'm sure Theranos has some successes and breakthroughs in the lab, which are cause for celebration, but this could be a false sense of accomplishment in terms of bringing it to market; there is a long way to go. Hubris has been the downfall of many leaders, but new technologies would not be developed without that confidence and determination. (See: Nikola Tesla, Steve Jobs, Elon Musk, etc.).
Musk was touting the success of Tesla long before the Model S began rolling off the line. I'm sure Holmes is following suit in this respect, but considering how long medical devices take to develop, I wonder if Theranos is even as far along in comparison to Tesla.

3. Theranos's Board was constructed to expedite the regulations process, not for innovation.
This interesting article in Fortune, makes a good point that its board was "assembled for its government connections, not for its understanding of the company or its technology." The article came out shortly after the original WSJ article, so it could be seen as a case of just piling it on while a company is knocked down, but I'm inclined to agree 100%.
As pharmaceutical companies can attest to, FDA and other regulatory processes take a long time and are influential enough to determine a company's success or failure before a drug/product even hits the market (if it is allowed to do so at all). Having insiders to hasten this process would be a great benefit before commercial launch, but the company may have gotten ahead of itself. Having too few members in medical devices (or even technology at all), hurts the development process and there are few to push back on decisions based on regulatory or financial constraints.

4. Theranos using other instruments to perform tests is not a big deal.
Something that surprised many from the WSJ article was the fact that Theranos was using other companies' machines to perform tests while it was perfect its own devices. If this was stated in any diagnostic agreement, this is not an issue. Fake-it-til-you-make-it is common practice in technology startups and all that matters is that patients gets accurate results.

5. The WSJ is taking things personally.
While investigative reporting should be unbiased, the WSJ's latest article takes this a bit too personally and adds anecdotal or misleading facts that are meant to portray Theranos in a negative light.
For example the inclusion of the fact that Tim Draper, who led the first $1M round of funding, was the father of a "childhood friend" of Holmes. This is meant to imply that this connection could be a reason for the funding, not the fact that two firms vetted and approved funding for the startup; and it is highly unlikely a personal relationship would allow for an investment of that size.
While I don't doubt that Theranos is stretching the truth in many instances and may even be participating in fraudulent activities, this commentary does little to support the main argument of the article.

6. Whistle-blowers are still not being given enough attention.
Whether internally or externally, employees trying to bring issues to light are still, more often than not, being swept under the rug. That doesn't mean these employees were fired because of speaking up (I assume there are various reasons for leaving the company), but with cases like Volkswagen, Takata, and others, you'd think companies would do more to address executive-level concerns.

7. Finally, while technology flubs and bad publicity are self-imposed, Theranos is also a victim of the current Startup Valuation Bubble.
As has been discussed ad nauseam the past few months, "unicorns" are losing the rarity of their moniker and this may be to their detriment. I believe this is for a number or reasons but, in short, there is too much money in Venture Capital and this is inflating the valuations of startups.
The high valuations place more pressure on startups to perform quickly and go public to give a return to the investors. I assume this has put Theranos in a tough spot to continue to somehow show progress in a traditionally slow-moving, slow development industry.


Other thoughts on Theranos, the industry, or startups in general?

Tuesday, December 22, 2015

How I've come to hate Website Contact Forms

I recently took over managing my family's restaurant website. Along with managing the technical aspects and content, I now receive all the messages received through the website contact form.
(Note: I don't have any website development experience and have relied heavily on Wix and its add-ons to build the site. My experience with this may become another post in the future).

As a personal preference, and if I cannot meet face-to-face, I like to communicate via messaging since it becomes documented and I can then reference it later. Email/texting also makes it easier to respond when you have time and not be disrupted when you're in the middle of something, so I understand looking for a contact form over calling. However, I'm definitely seeing the ramifications of this move towards text-based communication and the annoyances that come with it.

I used to use Contact forms on websites all the time to get in touch with small businesses (larger corporations have entire Support departments to deal with online requests), but I now understand how annoying they are and apologize to the poor staff on the other side. From now on, if a number is provided, I will call.

Anyway, here are a few examples of why I now hate Website Contact Forms!:

1. People trying to make reservations when the site clearly say to call. 

I included a note on our site that says calling is the fastest way to get an immediate response, but at least once a day we get messages like this:

I wish we had an electronic reservation system, but we don't so everything is still physically written down in a reservation book.

Not the worst, but a bit annoying when the website clearly states that you should call to make a reservation.

2. Everyone wants a donation.

If you have to resources to give, I'm all for donating to charities and other good causes, but we're still a relatively small local business that can't donate to every single request.
We definitely help out when we can, but the paperwork involved with a corporation donating is not inconsequential and we usually need documentation from the charitable organization for it to be tax-deductible. The annoying cases involve people making a request, then not following up when we ask for the required documents.

Also, I find it very interesting that people are much more likely to ask a local restaurant for donations and gift certificates than most other businesses.
Restaurants often have some of the smallest margins of any industry. Why don't you go to your local hardware store, grocery store, car wash, or bank for donations?

More after the break...

Sunday, December 20, 2015

Gone Galt

Originally, I had wanted to include this train of thought in my previous post, but I'm trying to cut down on the length of each post.

Anyway, as I was thinking about Mike Rowe's post criticizing Bernie Sander's calls for free college and about other eloquent posts by the former opera singer (yes, you read that right), I started to compare him to our current candidates for president. All the choices, on either side of the aisle, seem terrible (and generally the same if you actually look at their positions); so I began to wonder, why couldn't Mike Rowe (or people like him) run and win the race for the presidency?

Of course, it comes down to the fact that Mike Rowe doesn't want to run for president. Next came the realization that there are probably hundreds of people who would be "qualified" to be president and be excellent ones at that, but they don't want to run. Why?

Unfortunately, I think most of these people have also reached a certain enlightenment about this country, the political process, and the bureaucracy that makes even the simplest thing take twice as long and cost ten times as much as it should. As government continues to punish the rich and successful with higher taxes and regulations, there will be increasing talks of successful entrepreneurs and industrialists "Going Galt".

For those that aren't familiar, the phrase is derived from Ayn Rand's momentous book, Atlas Shrugged. (If you have not read it, I highly recommend doing so. Named after the protagonist, John Galt, "Going Galt" refers to the self-exile of many of the successful "movers" of the U.S. (and world), removing themselves and their beneficial contributions from the economic system and greater society. Imagine people like Elon Musk, Bill Gates, Mark Zuckerberg, Warren Buffett, Peter Thiel, Oprah Winfrey, Jeff Bezos, Larry Page, Sergey Brin; all disappearing and taking with them their knowledge, influence, and ambition.

While that full scenario seems unlikely, I would argue that it has manifested itself in other ways already. These people have purposely avoided the political system and are fabricating their own world, technically within the physical borders of the US, but only just barely in its bureaucratic grasps. Gates, Buffett and Zuckerberg have all pledged to donate the bulk of their wealth at the end of their lives, but have all ensured that it would not be impacted by the influence of government or politics.

Even the average citizen is doing their best to interact with government as little as possible while still creating great societal value in the form of products, services, and philanthropy.

So rather than the fear of losing our best and brightest of Going Galt, I believe it's already started and most have already Gone Galt.

Friday, December 18, 2015

Mike Rowe 4 President!

I was reading Mike Rowe's recent Facebook post criticizing a Bernie Sander's tweet that suggested there were only two options for developing citizens: Go to college or you'll end up in jail.

Here's a snippet, but definitely read the full post.
Bernie Sanders tweets, “At the end of the day, providing a path to go to college is a helluva lot cheaper than putting people on a path to jail.”
I wonder sometimes, if the best way to question the increasingly dangerous idea that a college education is the best path for the most people, is to stop fighting the sentiment directly, and simply shine a light on the knuckleheads who continue to perpetuate this nonsense. This latest tweet from Bernie Sanders is a prime example. In less than 140 characters, he’s managed to imply that a path to prison is the most likely alternative to a path to college. Pardon my acronym, but...WTF!?
Historically, universities have promoted themselves at the expense of many other forms of “alternative education.” The implicit suggestion, reinforced daily by a generation of well-intended guidance counselors and misguided parents, is always the same - get yourself a four-year degree, or accept one of the many “vocational consolation prizes” that result from all other forms of “lesser knowledge.” (Mike Rowe)

He goes on to reiterate the fact that many people should not be going to college just for the sake of having a degree, but should explore the potential of trade schools and other skilled positions.

Obviously, that post wasn't very popular with proponents of the "everyone should go to college" school of thought or the Bernie Sanders crowd.

Rowe posted a follow up post defending his, which I think is even more admirable in an age where most public figures fold under pressure and scrutiny of the masses (wrong or right); and he goes on to tell his personal story of higher education:
(Again, just an excerpt of the full post that you should read).
Back in 1980, my high-school guidance counselor told me the local community college was “beneath my potential.” Mr. Dunbar wanted me to apply at James Madison or Penn State. He said a two-year school would put me on the wrong path, and lead to a life of “wrench-turning.” He then pointed to this poster, part of the “Push for College” campaign in the late seventies, hanging on his office wall. “Which one of these guys do you want to be, Mike?” I still remember the caption on the poster - “Work Smart, Not Hard.” 
My decision was easy. Even with my parents help, there was no way I could afford a four-year school. I didn’t qualify for any kind of scholarship, and there was no outside financial aid. But even if there had been, I was not a good candidate for a loan. I was just 18, for crying out loud. I didn’t know my ass from a hot rock, much less what I wanted to major in. So, I stuck to my plan. I spent the next two years at Essex Community College. There, I took dozens of unrelated courses, and started to get a sense of what I wanted to do. (At $26 a credit, I could afford to be wrong.) 
Eventually, I earned an AA degree. A few years later, when I had saved some money, I transferred my credits to Towson State, and with my parents help, got a BA in Communications. Total cost for all of it? Less than $10,000. Point is, I was able to start working in my chosen field at 23, free from the crushing weight of a student loan. (Mike Rowe)

While I fully believe that education is a key to success, I don't believe that "Education" (the institution) or "higher education" is necessarily the only way people become educated and can pursue a successful career. I share Rowe's advocacy for more people to pursue work in "skilled labor" (welders, electricians, machinists, etc.).

Not only do these jobs also require months and/or years of training to become experts (or even simply proficient) in their field, but because of the shortage of workers, they also pay well. (On average, they earn more than $15/hour... Whaddaya know?)

There is no shortage of articles that outline this problem and, if the trend continues, things will only get worse as Baby Boomers age and the next generation of college-aspirants continue to neglect trade schools.

Friday, December 11, 2015

Chipotle: When too much help is worse than none at all

With the E. coli contamination in the Pacific Northwest and now a Norovirus outbreak in Boston linked to a local Chipotle, I started to wonder about the root cause of all this.
Were they isolated, coincidental incidents? Or are they the result of a common denominator?

Chipotle had a large hiring spree back in September where they had the goal of hiring 4,000 new employees in one day, which would increase their headcount by about 6.7%.
While it makes for good press (much needed for the food service industry as there is a nationwide staff shortage), I had serious reservations about the execution.
Gradually working in staff, particularly for a job that requires a lot of training, is preferable because existing staff can only train so many others at once, while also keeping up with their existing duties.

Most recently:
"Boston inspectors have temporarily closed the restaurant. It had passed inspections in April and last summer. But on Monday, inspectors found under-heated food. And they said the restaurant failed to comply with policy when a sick employee worked a Thursday shift. It’s not clear whether the worker or managers were at fault, or whether they even knew."
"Whatever the reason for this case, Webster said the food preparation model at Chipotle raises the risk of spreading illness. Burritos are filled and rolled assembly-line style.
The Cleveland Circle restaurant is not the only local Chipotle to be cited recently."
"Brookline Health Director Alan Balsam says his department recently found improperly heated food at the Commonwealth Avenue location. He says there was also no worker certified in food safety on staff, as state law requires. Balsam says the violations were not serious enough to close the restaurant immediately, but eventually he threatened to by setting a hearing."
"Balsam stresses that norovirus outbreaks are not uncommon here and can sicken dozens of people very quickly. But this Boston outbreak is adding to public concerns about Chipotle. In August, norovirus was blamed for nearly 100 cases at one of its California locations. In October and November, at least 52 people across nine states were sickened in an E. coli outbreak linked to the chain." (WBUR)

Obviously there was contamination of some sort, but I wonder if this was all linked to improperly trained staff.
From my own experience/opinion, the level of service at my local Chipotles has been lower lately and I had also noted the increase in new employees.

It will be a while before the exact causes of the contaminations are found, but I am leaning towards poor/improper training of new staff and simply not realizing the repercussions of poor hygiene in the restaurant industry.

I'm sure the company got a much-needed boost in headcount in the hiring spree, but there is obviously diminishing returns as the number of hires increases and, in this case, they may be worse off than being understaffed.


And I should know better than read the comments section, but sometimes I can't help myself.

I can't believe these people exist:

Not only do they exist, they are prolific commenters/trolls. (Read at your own risk!)
I am not part of the investigation team, but I am 100% certain the outbreaks are not caused by "disabled workers" or illegal immigrants.

*Also, WBUR is the local NPR station. I was unaware that people like this read the more progressive-leaning site/station.

Thursday, December 10, 2015

Hypocrisy: Consumer Financial Protection Bureau

I thought yesterday's WSJ article on the Consumer Financial Protection Bureau (CFPB) was interesting simply because of the fact that they were using a home-brewed, non-scientific approach to try and determine a person's race based on their names.

I'm not sure what qualifies as "racist" these days, but I think assuming a person's race based on their name may be cutting it close...
(Also reminds me of the study that showed people pre-judge others simply based on their name).

The Republican staff of the House Financial Services Committee has released a trove of documents showing that bureau officials knew their information was flawed and even deliberated on ways to prevent people outside the bureau from learning how flawed it was. 
The bureau has been guessing the race and ethnicity of car-loan borrowers based on their last names and addresses—and then suing banks whenever it looks like the people the government guesses are white seem to be getting a better deal than the people it guesses are minorities. This largely fact-free prosecutorial method is the reason a bipartisan House supermajority recently voted to roll back the bureau’s auto-loan rules
The vote occurred before the release of the House committee report, which shows that the regulators were guessing and knew that they weren’t even making good guesses. A May 2013 draft of a memo for bureau Director Richard Cordray prepared by bureau staff including Assistant Director Patrice Ficklin reported they had “reason to believe that our proxy is less accurate in identifying the race/ethnicity of particular individuals than some proprietary proxy methods that use nonpublic data.”
A draft version of the memo also noted that if the bureau never publicly released the details of how it was guessing the race of borrowers, “our internal methodological deliberations will not be discoverable.” In other words, the law-abiding taxpayers getting sued by the bureau would not be able to learn how bogus its discrimination claims were. A draft memo also noted that a “methods announcement” would “endanger” the work of the bureau in part “by providing fodder to defendants to show how our methods are inferior to other proprietary proxies.”
Unable to sustain its non-transparency policy, the bureau eventually released some information on its guessing methodology, and outsiders have been poking holes in it ever since. The Wall Street Journal recently recreated the algorithm used by the bureau to do its guesswork and tested it with some well-known politicos. The algorithm didn’t know what to make of such last names as “Kasich” and “ Obama.” (WSJ)
This is a perfect example of overzealous bureaucracy-in-action.

The CFPB was created by Obama and championed by Elizabeth Warren (D-MA) to protect consumers against large corporations (specifically banks and financial institutions) taking advantage of them.

However, much like the prosecution of Aaron Swartz, it shows the 'win at all costs' mentality government agencies take when they become politicized tools and are used to target specific people/industries, rather than letting facts dictate what to pursue and is in the best interested of the people they serve.

Despite their crusade against auto loan lenders and charge them for (purported) racist practices, the CFPB has a documented, factual history of racism within its own ranks.
Reports from last year showed rampant discrimination in job reviews and poor working environments for minorities, particularly blacks, with some likening it to a "plantation".

According to confidential internal stats obtained by the American Banker, "CFPB managers show a pattern of ranking white employees distinctly better than minorities in performance reviews used to grant raises and issue bonuses." 
In fact, the agency's own 2013 data show that whites were twice as likely as African-Americans to receive the CFPB's highest job performance grade of "5." Over 20% of white staffers got top ratings — and were held up as "role models" — compared with just 10.5% of blacks. (IBD)
A former employee of the Consumer Financial Protection Bureau (CFPB) on Wednesday compared the workplace atmosphere to a “plantation,” because of how black employees such as himself were treated. 
In the third House Financial Services subcommittee hearing to address claims of discrimination against the CFPB, Kevin Williams, a former quality assurance monitor at the agency, painted a picture where black employees were constantly belittled – even to the point where they were stereotypically offered fried chicken at company lunches. (The Hill)
Hopefully things have changed since those reports come out last year; but considering the unbelievable institutional corruption within another federal department and the inherent nature of bureaucracy to prevent change, I won't hold my breath.