Well yes and no. Remember that they have a really well connected board of directors and a lot of people put their reputation out there based on information they believed to be true. The managers at Walgreens don't know how to design, validate, and certify laboratory tests and procedures so they are kind of at the mercy of the folks who tell them they do. And while it would have been within their rights to send an outside pathologist on site to audit the entire workflow, to come up with that idea you have to at least suspect that they might be trying to pull a fast one on you.
I speak from experience when I say that it is easy to be fooled into believing people when those people actually believe they are telling the truth.
Bottom line is this is all on Theranos, and not Walgreens.
Then Walgreens should fail and come to be replaced by a pharmacy chain which one way or another depends on input from a competent pharmacist (whether they are equivalent of "CTO", or board of pharmacist advisors, or whatever works).
But according to a very relevant ArsTechnica article[0], they thought to do due diligence, failed to do so, and then in a fit of unicorn mania did the deals anyway:
Theranos failed to hand over an Edison to researchers hired by Walgreens to kick the tires and ensure it worked correctly, despite initially agreeing to do so. The young company, initially valued at $9 billion, didn’t even allow Walgreens executives to enter its lab or walk around the company’s headquarters without a chaperone, the WSJ reports.
Theranos did provide an Edison prototype and sample testing kits to a Walgreens executive. But the machine only spit out test results such as “low” and “high” so that Walgreens couldn’t compare the results to standard blood testing equipment. Nevertheless, Walgreens moved forward with a deal, partly out of anxiety that Theranos might partner with a competitor.
Having a chaperone for guests just makes sense. At the very least, you can keep them from accidentally breaking something. If you're not escorting guests, you're doing it wrong.
Agreed. I have never seen any commercial scientific lab (bio or otherwise) that let anyone just roam free. It would be a serious liability to let people roam without a chaperone. That has as much to do with biohazard/radiation/toxic/laser signs plastered around as it does company secrets. That said, the chaperone in this case should be very accommodating to the visitor in terms of seeing systems and operations of interest.
It's still surprising that it was possible at all to start doing this without some proof of work. There are better checks and balances for something as mundane as selling lettuce or holding money deposits; why not blood testing?
The board of directors should have someone with sufficient background and subject matter expertise to be able to read the description of a technology the board is considering and say, "wait a minute, this sounds too good to be true." That should trigger due diligence, which can involve, among other things, sending an outside party to audit Theranos.
The fact that Walgreens has no such person on their board is their failing, in my opinion.
>The managers at Walgreens don't know how to design, validate, and certify laboratory tests and procedures
This is why the current company system is a bad idea. It puts incompetent idiots in charge.
This is almost literally the definition of an epic failure. If you're running a health company and someone shows up on your doorstep with some unusual claims about their product, are you going to pay someone to do some independent checking, or are you just going to rely on social proof and the fact that the marketing person seems okay?
Making management decisions on the basis of status and social proof - and that includes the VC scene - is the opposite of collective intelligence.
I speak from experience when I say that it is easy to be fooled into believing people when those people actually believe they are telling the truth.
Bottom line is this is all on Theranos, and not Walgreens.